A Deep Dive Into Pre-Tax Employee Benefits

January 11, 2023

Pre-tax employee benefits are employee perks or benefits that are offered to employees by their employer and are tax-free. This means that employees do not have to pay taxes on these benefits, which can result in significant tax savings for both the employee and the employer. Pre-tax benefits are also sometimes referred to as "tax-free benefits" or "tax-exempt benefits."

Advantages of Pre-Tax Benefits


One of the main advantages of pre-tax benefits for employees is that they can result in significant tax savings. By reducing the amount of taxable income that an employee has, pre-tax benefits can help employees lower their tax bill and keep more of their hard-earned money.


Pre-tax benefits can also be advantageous for employers. Offering pre-tax benefits can help employers attract and retain top talent, and it can also help them reduce their own tax burden. Additionally, pre-tax benefits can be a cost-effective way for employers to provide valuable perks and benefits to their employees without having to pay for them in full.

Pre-Tax Benefit Examples

Remote Cleaning Services

Some employers offer remote cleaning services as a pre-tax benefit. This can be a convenient and cost-effective way for employees to have their homes cleaned on a regular basis without having to pay for it out of pocket.

Retirement Savings Plan

Employers can offer retirement savings plans, such as 401(k) plans or pensions, as pre-tax benefits. Contributions to these plans are made on a pre-tax basis, which can help employees save for retirement while also lowering their tax bill.

Health Insurance Plan

Health insurance plans are another common example of pre-tax benefits. Employers often offer health insurance plans to their employees as a way to help cover the costs of medical expenses. Contributions to these plans are typically made on a pre-tax basis, which can help employees save money on their healthcare costs.

Commuter Benefits:

Employers can also offer commuter benefits as pre-tax benefits. These benefits can include things like public transportation passes, parking passes, and carpooling expenses. By offering these benefits on a pre-tax basis, employers can help their employees save money on commuting costs while also reducing their own tax burden.

Offer Cleaning as an Employee Benefit With TIDY

TIDY offers cleaning services as an employee benefit. By partnering with TIDY, employers can offer their employees the convenience and cost-savings of professional cleaning services on a pre-tax basis. This can be an attractive benefit for employees and can help employers attract and retain top talent. Schedule a free demo call and learn more!

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