Payroll tax savings when you pay fringe as benefits
When you pay prevailing wage fringe as bona fide benefits (e.g. health, retirement) instead of cash, that amount is not subject to FICA, state unemployment, or workers comp. Estimate your savings below.
$250,000
7.7%
3.0%
5.0%
Estimated payroll tax savings per year
$39,125
By paying fringe as benefits instead of cash, you avoid payroll taxes on that amount (effective rate 15.7%).
- FICA savings
- $19,125
- SUTA savings
- $7,500
- Workers comp savings
- $12,500
Savings assume the same dollar amount is provided as qualified benefits rather than taxable cash. FICA is typically 7.65% (employer). SUTA and workers comp rates vary by state and classification. Results are estimates; consult your accountant or tax advisor.