• Your Paycheck
  • Out of Pocket Expenses
  • Sample Paycheck

The Section 125 Plan allows you to deduct eligible benefits from gross earnings before taxes are computed. This gives you more spendable income because current after-tax expenses, such as insurance products and benefits, can now be paid with pre-tax dollars.*

Let’s see what kind of additional spendable income you may have.

If you know your combined tax rate, please enter it into the field above.
If not, you may want to use between 15% and 20% as an estimate.

*Your federal and state taxes my differ from this example. If you know your combined tax rate, please enter it into the text field above. This example is for illustration purposes only. Please consult your tax advisor for actual tax savings.

Let’s estimate your current out of pocket insurance, medical and dependent care expenses, per pay period.


*You may allocate up to $2,550 per tax year for eligible medical expenses such as co-payments, medical deductibles, prescriptions, and much more. Expenses incurred for you, your spouse, and other qualifying individuals are eligible for reimbursement.

**You may allocate up to $5,000 per tax year for reimbursement of dependent day care services ($2,500 if you are married and file a separate tax return).

Earnings & Hours Per Pay Period No Section 125 With Section 125
Pay Period Salary
Insurance and Out of Pocket Expenses (Pre-Tax) N/A
Taxable Gross
Taxes (Federal & State)
Less Estimated FICA (7.65%)
Insurance and Out of Pocket Expenses (After Taxes) N/A
Estimated Adjusted Take Home Pay!

If you are subject to FICA taxes, there might be a slight reduction in your social security benefit due to the reduction of FICA contributions. Example is for illustrations purposes only and the actual impact on your taxes may differ from this example. Also, tax treatment of FSA’s varies in some states.