Payroll accounting: Cafeteria plans

Cafeteria plans, also known as flexible benefit plans or Section 125 plans (referring to the section of the Internal Revenue Code that governs them), are employee benefit plans offered by employers. These plans allow employees to choose from a menu of pre-tax benefits, similar to selecting items from a cafeteria menu.
Employers offer many different types of fringe benefits - including cafeteria type fringe benefits. This video helps students understand pre-tax and post-tax fringe benefit deductions. In addition, your homework and exams will include questions about fringe benefits in general and exercises that will ask you to calculate taxable wages - taking into account applicable fringe benefits. This video supplements your textbook readings to illustrate how fringe benefits are taxed and to distinguish between fully taxable, partially taxable and non-taxable fringe benefits.
Ask yourself: What benefits are offered by your employer (if applicable) or what benefits would you like to see in your future job?
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