Definition of Cafeteria plan:
The Cafeteria Plan is named after this cafeteria, but it has nothing to do with food. Just as people choose food in a cafeteria, employees can choose the benefits they want before they calculate the payroll tax from the many options offered by their employers. These packages are becoming increasingly useful as manpower diversity grows and employees seek more personalized benefits to suit their needs.
The Cafeteria Package is a benefits program that allows employees to choose from a variety of tax benefits. Employees can receive a portion of their total income before taxes are calculated and withheld. This plan usually includes options such as insurance benefits and benefits that help employees deal with various life events such as adoption. Cafeteria projects are also known as flexible benefit projects or section 125 projects.
Flexible retirement plan where each employee receives a fixed amount of credit. For example, he can use this credit for one or more benefit options selected in the Benefits menu. B. Lifetime dental care, insurance, health insurance or cash back.
How to use Cafeteria plan in a sentence?
- Employees have many pre-tax options, including insurance benefits, retirement benefits and benefits that play a significant role in life events.
- With the Cafeteria package, employees can choose from a number of pre-tax benefits.
- This plan is usually more flexible than others.
- Cafeteria projects can be more complex and time consuming.
Meaning of Cafeteria plan & Cafeteria plan Definition