Pre-Tax / Payroll Deductions
Payroll deductions for health and dental coverage may be deducted under the provisions of the Internal Revenue Service Tax Code, Section 125. The County's Section 125 Plan allows you to make these premium payments from pre-tax dollars.
The plan year begins January 1 and continues through December 31st. Each year during the County's annual enrollment, you are given the opportunity to change your dependent coverages or switch plans. Information is sent out in the fall giving procedures and deadlines for making changes which will be effective with the next plan year.
If you elect Pre-Tax health and dental premiums, the money you spend on premiums will not be subject to federal income or Social Security taxes, and these savings show up in your take home pay. The following example will give you an idea of how the Pre-Tax Plan can work for you:
EXAMPLE - Employee is married, has family medical and dental coverages and has claimed one exemption for Income Tax.
| If you have NO on Pre-Tax: |
Biweekly Gross Pay
(Taxable Income) |
$1,000.00 |
$1,500.00 |
$2,000.00 |
Deduction for Health & Dental
Federal Income Tax
Social Security Tax
Medicare Tax
Net Biweekly Take Home Pay
|
-122.32
-72.40
-62.00
-14.50
$728.78
|
-122.32
-147.40
-93.00
-21.75
$1,115.53
|
-122.32
-222.40
-124.00
-29.00
$1,502.28
|
| If you have YES on Pre-Tax:
|
Biweekly Gross Pay
Pre-Tax Deduction for Health & Dental
Taxable Income
Federal Income Tax
Social Security Tax
Medicare Tax
Net Biweekly Take Home Pay
|
$1,000.00
-122.32
877.68
-54.06
-54.42
-12.73
$756.47
|
$1,500.00
-122.32
1,377.68
-129.06
-85.42
-19.98
$1,143.22
|
$2,000.00
-122.32
1,877.68
-204.06
-116.42
-27.23
$1,529.97
|
- Pre-Tax premium deduction will mean more money in your take home pay. However, you must be aware that since your Social Security wage is reduced, your Social Security benefit at retirement will reflect this very slight decrease in wages. Your other benefits such as the Florida Retirement System benefits and group life insurance coverage are not affected.
- As with any tax reduction, the Internal Revenue Service places restrictions on its administration. One of these is that you may not change your Pre-Tax status or insurance coverages during the plan year unless you experience a Change of Status event as defined by the IRS (such as getting married).
- If you desire to make a change in your coverage due to a Change of Status event, you must contact Employee Benefits by email or by phone at (727) 464-4570 within 31 days of the event.
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