Health insurance premium on your paycheck
Most employer health, dental, vision premiums are pre-tax (Section 125).
Premiums paid through a Section 125 cafeteria plan reduce federal income tax and FICA. They typically reduce state income tax (PA does not allow this for state purposes). Verify on your benefits enrollment paperwork.
How it usually appears
Category: pre-tax
Tax interaction
- Reduces federal taxable wages: Yes
- Reduces FICA wages: Yes
- Reduces state taxable wages: Usually yes
Official sources
- IRS Publication 15 (Circular E), Employer's Tax Guide — IRS · 2025 · last verified 2025-04-01
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