Employer FICA Savings Calculator
Estimate what your company could save on employer FICA taxes with eligible Section 125 pre-tax deductions. Results are educational estimates, not tax or benefits advice.
Your Modeled Annual Savings Estimate
Employer FICA Savings
$0
Modeled Social Security + Medicare reduction
Employee FICA Savings (Total)
$0
Combined across all participants
Per Employee Savings
$0
Modeled employee FICA effect only
Participating Employees
0
Based on participation rate
Social Security Savings (6.2%)
$0
On wages up to $184,500
Medicare Savings (1.45%)
$0
On all wages (no cap)
Note: These estimates account for the Social Security wage base cap of $184,500 (2026). The 6.2% Social Security tax only applies to wages up to this threshold. The 1.45% Medicare tax applies to all wages with no cap.
How the cap works: For employees earning above $184,500, pre-tax deductions only save the 1.45% Medicare portion on income above the cap. The full 7.65% savings applies only to the portion of wages at or below the wage base. Income tax savings are not included in this estimate.
This tool provides education only and does not provide tax, legal, insurance, payroll, or benefits advice. Verify plan-specific calculations and implementation decisions with a licensed advisor, TPA, payroll provider, or qualified tax professional.
Ready to review these estimates?
A licensed benefits professional or TPA can review your current setup, plan documents, payroll treatment, and implementation options.
Start Review PathHow This Works
When benefits are deducted pre-tax through a Section 125 plan, eligible dollars may reduce employer and employee FICA by up to 7.65%, subject to wage-base limits. This calculator shows an employer-side educational estimate. Employee income-tax effects are not included.
Learn more about FICA savings →Ask Sarah
Questions about FICA taxes or Section 125 plans? Chat with Sarah for education and help deciding whether a Snapshot should organize the details.
Understanding FICA Savings
See the mechanics behind pre-tax benefit deductions. How they can reduce taxable wages for employers and employees when implemented correctly.
How FICA Savings Work
Watch the overview, then check out the infographic on the right for a visual breakdown.
How Pre-Tax Deductions Save Money
The order of deductions matters. Eligible pre-tax deductions can lower taxable wages when supported by the right plan and payroll setup.
7.65% FICA Rate
6.2% Social Security + 1.45% Medicare. Both employer and employee pay this on taxable wages.
IRS Framework
Section 125 cafeteria plans are established under the Internal Revenue Code, but plan documents, eligibility, testing, and payroll treatment need professional review.
Setup Timing Varies
Timing depends on plan design, provider onboarding, payroll setup, and effective-date rules. Savings estimates depend on correct implementation.
Estimated your savings? Organize the rest before a partner reviews details.
After you estimate savings, organize the rest of the benefits questions — renewal timing, payroll deduction treatment, Section 125 documentation, and provider-path questions — before a licensed partner reviews the details.
Educational review only. Licensed advisors, TPAs, or partners verify details, pricing, compliance, and implementation.
Ready to review Section 125 for your team?
Start with an educational Snapshot so your payroll deduction treatment, plan-document status, and provider-path questions are organized before licensed professional review.
