Premium Only Plan (POP)
Help employees save on federal income taxes and health insurance costs while you save on FICA and FUTA payroll taxes with a Paychex Premium Only Plan (POP).
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POP
How it Works
In combination with group health insurance, a POP pays a portion of employees' insurance premiums on a pre-tax basis, which reduces their taxable income and helps them save on FICA, federal, and (where applicable) state and local taxes. As a result, a POP reduces the income amount used to determine your payroll taxes as well. Learn more.
The Paychex POP
Paychex can help you establish and manage your POP by providing legal documentation, compliance testing, and regular status reports to keep your employees' accounts running smoothly. If you have questions, just call our toll-free support line and our POP experts will be glad to answer them for you.
Section 125 Plans
Also known as cafeteria plans, section 125 plans such as a POP or Flexible Spending Account (FSA)* are powerful tax savings tools.
| Section 125 Plan Comparison |
| |
POP |
FSA |
| Pretax premium payments |
Yes |
N/A |
| Pretax payment of qualified expenses** not covered by your benefit plans |
No |
Yes |
| Reduces employees' FICA, federal, and where applicable, state and local taxes |
Yes |
Yes |
| Reduces employers' FICA payroll taxes by effectively lowering employee taxable income |
Yes |
Yes |
| Can be integrated with Paychex Payroll for automated contribution deductions and simplified plan administration |
Yes |
Yes |
| A powerful tax incentive to help recruit and retain quality employees |
Yes |
Yes |
| Easy claim submission via secure website or mail |
N/A |
Yes |
Optional reimbursement methods:
- Direct deposit
- Check signing and mailing
- Paychex FSA Debit Card
|
N/A |
Yes |
| Dedicated toll-free support line |
Yes |
Yes |
|
* For applicable state legislation, consult your tax advisor.
** Medical, dental, and dependent care expenses, including co-payments, deductibles, and some over-the-counter medications
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