Start with employees expected to meet the eligibility and positive-paycheck criteria—not total company headcount.
Employer payroll-tax guide
How employer FICA savings can work.
Qualifying salary-reduction contributions used to purchase qualifying health coverage may be excluded from FICA wages when the written cafeteria plan and actual operation satisfy the applicable rules.
Starting pointQualifying coverage election
Potential effectSupported wage exclusion
Employer resultCompany-specific payroll effect
The payroll chain
Trace the result from eligibility to reconciliation.
- 01
Run an employee-level gross-to-net illustration and identify employees who meet the documented criteria with a positive projected paycheck result.
- 02
Invite eligible employees to elect qualifying coverage voluntarily under the written cafeteria plan.
- 03
Apply expected participation to that eligible population and model employer savings only from projected participants.
- 04
Reconcile actual elections, Plan costs, taxable amounts, payroll treatment, and realized employer savings after launch.
How the public estimate works
A workforce scenario, not a per-participant promise.
Apply the employer's expected participation rate to estimate the number of participating employees.
Use the calculator to model the workforce scenario. The confidential review replaces the public scenario with employer-specific payroll data, Plan costs, and actual tax treatment.
Primary sources
Start with federal guidance, then review the employer facts.
IRS cafeteria-plan guidance
The IRS explains written-plan requirements, qualifying coverage, cash elections, and employment-tax treatment.
Read IRS guidance ↗CCA 202323006
The IRS addresses fixed wellness payments when no related unreimbursed medical expense exists.
Read the memorandum ↗CCA 201622031
The IRS addresses cash rewards and reimbursements of premiums originally paid through salary reduction.
Read the memorandum ↗IR-2024-65
The IRS warns that general wellness and personal expenses are not medical expenses merely because they support health.
Read the IRS alert ↗Replace the estimate with your numbers