Medical and dental deductions – are they always pre-tax?
April 7th, 2010Question for those out there who are experts on payroll deductions: Deductions taken from my paycheck for medical, dental insurance, long-time disability, life insurance, etc…do all companies deduct this money from bi-weekly paychecks on a pre-tax basis or are there employers who do it on a post-tax basis? I have a full-time job as an engineer on a fortune-500 company. Thank you
Replys
Well…it’s more common for disability to be offered as post-tax (because then if you collect, the payments are tax free), but is *is* possible for a company to allow you to request that all benefits be deducted on an after tax basis. (I have co-workers who plan to retire in 3 years doing this.)
The difference is that you will pay more in fica/mc and income tax. In exchange you *might* qualify for more ssa benefits when your retire or a higher pension….
From my experience, it’s always been pre tax.
Most, but NOT ALL, companies have plans set up so that these payments come out pre-tax.
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