Employer FICA Tax Savings
The Preventive Care Benefits Program generates employer FICA tax savings of $1119 to $1186 per W2 employee per year. These savings are realized immediately on the first payroll cycle after implementation, with no out-of-pocket expenses for the employer.
Savings by Company Size
| Employees | Monthly Savings | Annual Savings |
|---|---|---|
| 10 | $933.30 | $11,199.60 |
| 25 | $2,333.25 | $27,999.00 |
| 50 | $4,666.50 | $55,998.00 |
| 100 | $9,333.00 | $111,996.00 |
| 250 | $23,332.50 | $279,990.00 |
Why These Savings Exist
The Section 125 cafeteria plan reduces the employer's FICA-taxable payroll for each participating employee. Since employers pay the matching portion of FICA (6.2% Social Security + 1.45% Medicare = 7.65%), any reduction in taxable payroll directly reduces the employer's tax obligation.
Unlike traditional benefits that require employer funding (health insurance premiums, HRA contributions, 401(k) matches), the PCBP requires $0 employer contribution. The program is entirely funded through the pre-tax payroll restructuring, making the FICA savings pure profit for the employer.
According to the Bureau of Labor Statistics, benefits account for approximately 31% of total employee compensation costs. The PCBP uniquely reverses this equation — instead of adding costs, it generates savings while expanding the benefits package.
Calculate Your Exact Savings
Enter your employee count to see your projected annual FICA tax savings.