Cafeteria Plan

Section 125 / Cafeteria Plan

Cafeteria plans, also known as Section 125 plans (the IRS code that covers them), and flexible spending plans allow you to deduct certain amounts for benefits from your gross earnings before federal withholding taxes are figured.

Similar to a cafete1;a where individuals select their food of choice, employees may choose benefits of their choice. These plans become more useful as diversity within our workforce continues to grow. For example, the benefit needs of young families may differ greatly from those of a single person.