Is a Section 125 Cafeteria Plan Right for Your Business?
Running a business means juggling ten things before lunch. Payroll, hiring, retention, taxes, morale. Benefits usually land somewhere in the middle of that chaos. And at some point, someone brings up a cafeteria benefit plan , and you nod like you’ve got it handled. Truth is, a lot of owners don’t fully understand how it works or whether it’s even worth the paperwork. A Section 125 arrangement sounds technical. Almost intimidating. But it’s really just a structured way to let employees pay for certain benefits with pre-tax dollars. That’s it at its core. The question isn’t whether it sounds smart. The question is whether it fits your business, your team, and your long-term plans. What a Section 125 Cafeteria Plan Actually Is A Section 125 cafeteria plan is a benefit program allowed under the IRS code that lets employees choose from a menu of pre-tax benefits. That’s why it’s called “cafeteria.” They pick what they want. Instead of receiving all compensation as taxable wages, empl...