Why Should
Our Company Consider an
ADMIN AMERICA POP Now?
Every day
your employees pay for their payroll deducted insurance
premiums with after tax dollars, you and your employees are
losing money. A ADMIN AMERICA Simplified Premium
Only Plan ("POP") will increase employee
paychecks while saving you F.I.C.A. taxes! Under
"Section 125" of the Internal Revenue Code,
employers are allowed to offer Flexible Benefits Plans, such
as a POP, to their employees. Both the employer and the
employees will benefit with tax savings as a result
of this arrangement.
When the
rules of Section 125 are followed, employers may deduct
employee paid premiums for certain group health and
disability related benefits on a tax-exempt basis. This
means the employer pays less F.I.C.A. tax and the
employee will pay less F.I.C.A. and income taxes.
Employees will actually see an immediate increase in their
paycheck. Any single employer and some "related
employers" such as controlled groups or members of an
affiliated service group may establish a POP. Some
individuals are prohibited from participating in these
plans, such as partners in a partnership, owners of an
S-Corporation or sole proprietors. Although these
individuals are not allowed to personally participate, their
employees can utilize the tax savings offered by these plans
and the employer still enjoys the FICA savings.
Specific
employer and employee savings depend on the total amount
employees contribute towards Section 125 qualified benefits.
These tables demonstrate the savings available when you
implement a ADMIN AMERICA POP. How many other
opportunities do you have to increase wages at negative cost
to you?
| EMPLOYER
SAVINGS |
Without
POP |
With
POP |
| Total
Annual Payroll |
$300,000 |
$300,000 |
| LESS
Employee Premiums |
$0 |
($28,800) |
| Net
Taxable Payroll |
$300,000 |
$271,200 |
| F.I.C.A.
Taxes (7.65%) |
$22,950 |
$20,747 |
| F.I.C.A.
TAX SAVINGS |
|
$2,204 |
| EMPLOYEE
SAVINGS: |
Without
POP |
With
POP |
| Gross
Annual Salary |
$20,000 |
$20,000 |
| LESS
Pre-tax Premium |
($0) |
($2,400) |
| Net
Taxable Income |
$20,000 |
$17,600 |
| LESS
Income Tax (28.65%) |
($5,730) |
($5,042) |
| LESS
After-tax Premium |
($2,400) |
($0) |
| Net Pay
Check Amount |
$11,870 |
$12,558 |
| ANNUAL
INCREASE IN PAY CHECK |
|
$688 |
|
