The jobs report released on April 1st was no joke. Employment numbers are the best they’ve been in years. The U.S. economy added over 200,000 jobs, and the unemployment rate dipped to 8.8 percent. The rate had been hovering in the 9 to 10 percent range since 2009. This is one more optimistic sign that suggests the economy is improving. While this is of course very welcome news for all businesses, including yours, do bear in mind that your top talent may also view this as the perfect opportunity to find other career opportunities.
Smart Employers Will Offer Incentives to Employees
WellPoint Research recently conducted a study among employees and the results reveal that benefits are a big deal for them. A majority of survey respondents said that they were more likely to stay with an employer who did a good job of communicating the benefits package to employees. In fact, 60% said that they would stay in the same job, even if offered more money to work somewhere else. So a proactive employer who wants to retain talented workers would do well to beef up the benefits package, and communicate that commitment to their employees.
Section 125 POP Plan: Your Key to Keeping Employees
If you want to provide more benefits to employees without spending a lot, then consider a Section 125 POP Plan. Also called a cafeteria plan, one option is to allow employees to choose from a range of voluntary benefits, such as health, dental, or disability insurance, and offer to allow premiums via payroll deduction. Even though the employer doesn’t pay any portion of these premiums, it is still a benefit to employees because the options are enrollment and payment is convenient and premiums are deducted on a pre-tax basis. Any deductions made pre-tax effectively lowers the employee’s taxable income. That in turn, lowers the employee’s share of FICA and Medicare taxes. The employees not only get access to useful benefits for themselves and their families, they also get to pay lower premiums than what these would have been had the insurance been purchased outside a Section 125 Plan.
What’s makes the deal sweeter is that even employers get something out of it. When an employee’s taxable income goes down, the employer’s share of FICA and Medicare taxes drops as well. This also lowers your FUTA taxes, and could decrease your state employment taxes too.
You can get started on keeping your best employees in minutes with www.TaxFreePremiums.com. With sound advice and the right tools, your Section 125 POP Plan can be up and running today!
Tags: cafeteria plan, Insurance, irs section 125, premium only plan, section 125, section 125 cafeteria plan, section 125 pop plan, tax