What are Pre-Tax Contributions?

Everyone knows that taxes are calculated on every paycheck, but this is a way for you to make contributions to your HSA before taxes are calculated. This is called a "Pre-Tax Contribution".

The table below assumes participation for a full 12 months. Exceptions exist for employees who enroll in the HSA PPO at a time other than the open enrollment period in August.

Post-Tax Contributions & Premiums
Gross Taxable Income:	$35,000
Federal Income, FICA & State taxes:	$10,000
After Tax Income:	$25,000
Insurance Premiums:	$5,000
HSA Contribution:	$1,500
Net Take Home Pay:	$18,500
Pre-Tax Contributions & Premiums
Gross Taxable Income:	$35,000
Insurance Premiums:	$5,000
HSA Contribution:	$1,500
Adjusted Income:	$28,500
Federal Income, FICA & State taxes:	$7,700
Net Take Home Pay:	$20,800
Increase Take Home Pay of:	$2,300

Take advantage of the tax savings with your Pre-Tax Contributions

Note: These are representational calculations only. Your tax rate and savings may differ from the ones reflected above.

"Pre-tax contributions are only available to active employees who are participating in a 125 Cafeteria Plan. Retirees, COBRA participants, and active employees not participating in a 125 Plan can take a deduction on their 1040 form for contributions to their HSA."

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