Flexible Spending Accounts, Health Reimbursement Accounts- Employee Benefit Administrator

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Why FSA’s Make Financial Sense

Company Savings Example

The XYZ Company has 100 employees, 17% of the employees participate in the medical flexible spending accounts and contribute an average of $744. Five participate in the dependent care accounts and contribute an average of $2,848.

Item

Savings

Medical FSA contributions (17 x $744)

$12,648

Dependent care FSA contributions (5 x $2,848)

$14,240

Annual FSA Contributions

$26,888

FICA Saved ($26,888 x 7.65%)

$2,057

Estimated Other Savings (1%)

$269

Interest income (3%)

$67

Total Employer Savings

$2,393

Actual savings will vary depending on the level of participation by your employees.

Employee Savings Example

The following illustrates the savings for a worker earning $30,000 per year. †

Item

Without FSA

With FSA

Total Monthly Pay

$2,500

Benefits (Medical/Dental/Expenses)

$60

Child Care Expenses

$200

Taxable Income

$2,500

$2,240

Less Deductions 30%

$750

$672

After Tax Income

$1,750

$1,658

Benefits (Medical/Dental/Expenses)

$60

Child Care Expenses

$200

Monthly Take Home Pay

$1,490

$1,658

Annual Take Home Pay

$17,880

$18,816

† If employee portion of medical premium is paid pre-tax, savings illustrated will be greater for both employer and employee.