Section 125 Plan Savings Calculator

  • Your Paycheck
  • Out-of-Pocket Expenses
  • Sample Paycheck

A Section 125 Plan allows you to use pre-tax dollars to cover eligible insurance and benefit premiums. This may help increase your spendable income by subtracting these expenses from your gross earnings before taxes are calculated. 

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

* Required Fields

**If you know your combined federal and state income tax rate, please enter the number as a percent. For example, someone in Oklahoma whose taxable income is $50,000 could have about 22% federal and 5% state tax rates, for a combined tax rate of 27%.

If you are unsure of your tax rates, please consult your tax advisor.

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


*Use the FSA Worksheet to estimate the total amount of out-of-pocket medical expenses you anticipate you will have within your plan year. The expenses may be incurred only for you, your spouse, and other qualifying individuals and may include co-payments, medical deductibles, prescriptions, and more. Enter the per pay period amount above. Please note this calculator is based on the 2025 Internal Revenue Code (IRC) employee contribution annual maximum of $3300. Your employer may choose to set the annual maximum in the plan at a lower amount than the IRC permitted amount.

**Estimate the total amount of out-of-pocket dependent daycare expenses you anticipate spending for the plan year. Enter the per pay period amount above. This worksheet is based on the IRC annual maximum of $5,000 ($2,500 if married and filing separately) and will limit the amount to the IRC maximum. Please note your employer may choose to set the annual maximum in the plan at a lower amount than the IRC permitted amount.

This calculator is only an example of what you may save and includes core benefits and flexible spending accounts. Your employer's plan may allow other pre-tax benefits not included in the example above.

Please consult your tax advisor for advice on using dependent care accounts or dependent tax credits.

 

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

A difference of  per paycheck!

This sample paycheck with a Section 125 Plan has  more spendable income per pay period! With potential annual savings of !

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

This should not be considered financial, legal or tax advice. Consult an attorney or a tax professional regarding your specific situation.