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Are deductions for a cafeteria plan taken before calculating employer withholding tax?

April 26, 2017cafeteria calculating deductions employer Plan tax withholding

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Are deductions for a cafeteria plan taken before calculating employer withholding tax?

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(We follow the State of PA in determining taxable wages) Answer: Generally, if an employee has deductions from his wages for a cafeteria plan and those deductions are for “health and welfare benefits”, you can reduce the gross wages before calculating the withholding. Examples of allowable deductions would be premiums for health insurance, eye plans, and dental plans. Deductions that are not allowable include retirement contributions and dependent care expenses.