Section 125 Cafeteria Plans: Smarter Healthcare Benefits for Your Team

When it comes to attracting and retaining top talent, health benefits are no longer optional, they’re essential. But rising healthcare costs can put pressure on both employers and employees. That’s where a Section 125 cafeteria plan like Harmoni125 makes all the difference.

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Section 125 Benefit Plan: What Shows on Your W2

Section 125 health plan contributions, made through cafeteria plans, typically reduce the amount of taxable income reported in Box 1 of your W-2. Because these deductions are made on a pre-tax basis, they are excluded from federal income tax calculations. However, depending on the benefit type, they may still appear in Boxes 3 and 5, which report wages subject to Social Security and Medicare taxes.

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