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Tax advantages of Metrochek/SmartBenefits®
employer-paid direct benefit
Assumptions:
- Employee pays 28% in federal income tax.
- Employee pays 6% in state income tax.
- Employer pays 30% in federal/state income tax.
- Employer pays 6% in unemployment taxes up to $7,000 in income per employee.
If the employer provides $115 per month ($1,380 per year), this is
the value to the employee:
| Employee Value |
Private Employer (for profit) |
Non-Profit/Federal Employer (FERS) |
Government Employer (CSRS) |
| Base Amount |
$1,380 |
$1,380 |
$1,380 |
| Federal Income Tax Saved |
$386.40 |
$386.40 |
$386.40 |
| Employee FICA 7.65% Saved* |
$105.57 |
$105.57 |
$20.01 |
| State Income Tax 6% Saved |
$82.80 |
$82.80 |
$82.80 |
| True Value to Employee |
$1,954.77 |
$1,954.77 |
$1,869.21 |
This is the cost to the employer:
| Employer Costs |
Private Employer (for profit) |
Non-Profit/Federal Employer (FERS) |
Government Employer (CSRS) |
| Base Amount |
$1,380 |
$1,380 |
$1,380 |
| Employer FICA 7.65% Saved |
($105.57) |
($105.57) |
($20.01) |
| Employer Unemployment Tax Saved |
($82.80) |
($82.80) |
($82.80) |
| Less 30% Fed/ State Tax Ded. |
($414) |
0 |
0 |
| Net Cost to Employer |
$777.63 |
$1,191.63 |
$1,277.19 |
*Civil Service column uses only Medicare tax rate
(1.45%), not full FICA rate
Pre-tax salary tax advantages of Metrochek/SmartBenefits®
Assumptions:
- Employee pays 28% in federal income tax.
- Employee pays 6% in state income tax.
If an employer provides Metrochek/SmartBenefits® to an employee at
the maximum of $115 per month ($1,380 per year) through pre-tax salary
deduction, this is the cost to the employee:
| Employee Costs |
Private Employer |
| Base Amount |
$1,380.00 |
| Federal Income Tax Saved |
($386.40) |
| Employee FICA 7.65% Saved* |
($105.57) |
| State Income Tax 6% Saved |
($82.80) |
| Total Cost to Employee |
$805.23 |
This is the cost savings to the
employer:
| Employer Costs |
Private Employer |
| Base Amount paid to WMATA for SmartBenefits® |
($1,380.00) |
| Money deducted from employee salary to pay
for SmartBenefits® |
$1,380.00 |
| Actual cost to Employer |
$00.00 |
| Employer FICA 7.65% Saved |
$105.57 |
| Employer Unemployment Tax Saved* |
$82.80 |
| Net savings to Employer compared
to Cash salary payment |
$188.37 |
*Federal Unemployment Tax payable on first $7,000 of each employee’s
salary per year.
Pre-tax salary tax advantages of SmartBenefits®
Parking
Assumptions:
- Employee pays 28% in federal income tax.
- Employee pays 6% in state income tax.
Example: If an employer provides SmartBenefits® Parking to an employee
at $90 per month ($1,080 per year) through pre-tax salary deduction,
this is the cost to the employee:
| Employee Costs |
Private Employer |
| Cost of SmartBenefits® Parking |
$1,080.00 |
| Federal Income Tax Saved |
($302.40) |
| Employee FICA 7.65% Saved |
($82.62) |
| State Income Tax |
($64.80) |
| Total Cost to Employee |
$630.18 |
*Federal Unemployment Tax payable on first $7,000 of
each employee’s salary per year.
This is the cost savings to the
employer:
| Employer Costs |
Private Employer |
| Base Amount paid to WMATA for SmartBenefits
parking |
($1,080.00) |
| Money deducted from employee salary to pay
for SmartBenefits parking |
$1,080.00 |
| Actual cost to Employer |
$00.00 |
| Employer FICA 7.65% Saved |
$82.62 |
| Employer Unemployment Tax Saved* |
$64.80 |
| Net savings to Employer compared
to Cash salary payment |
$147.42 |
*Federal Unemployment Tax payable on first $7,000 of each employee’s
salary per year. |
