Section 125 Savings Calculator

  • Sample Paycheck
  • Out of Pocket Expenses
  • Your Paycheck

The Section 125 Plan allows you to deduct eligible benefits premiums 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 federal and state income tax rate, please enter the number as a percent. As an example, someone in Oklahoma whose taxable income is $50,000 could have about 22% federal and 5% state marginal tax rates, for a combined marginal tax rate of 27%. Please consult your tax advisor for your tax rates if you don't know.

Let's estimate what you pay each pay period for coverage and reimbursement account contributions.


*Use the FSA Worksheet to estimate the amount of out-of-pocket medical expenses such as co-payments, medical deductibles, prescriptions and more. Expenses incurred for you, your spouse, and other qualifying individuals should be considered. If your estimate is less than $2,650 for the year, divide by the number of pay periods and enter. If your estimate is $2,650 or greater, you will be limited to the amount you can contribute.

 

**Estimate the amount of out-of-pocket dependent care expenses for the year. If your estimate is less than $5,000 ($2,500 if married, filing separately), divide by the number of pay periods and enter. If your estimate is $5,000 or greater, you will be limited to the amount you can contribute. Consult your tax advisor for advice on use of Dependent Care Accounts or dependent tax credit.

 

 Earnings & hours per pay period No Section 125 With Section 125
Gross pay period salary
Cost of benefits and expected out-of-pocket expenses (pre-tax) N/A
Taxable income
Income taxes (Federal & State)
Less estimated FICA (7.65%)
Cost of benefits and expected out-of-pocket expenses (after taxes) N/A
Estimated adjusted take home pay!

 

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