Sec125 vs s125. Aug 28, 2025 · With health care costs continually on the rise, a Section 125 plan can not only help augment your employee benefits package, but it can also offer certain employer and employee tax advantages. com Jan 21, 2025 · The “S125” code refers to Section 125 of the Internal Revenue Code, which governs cafeteria plans. If it is an employee benefit that has already been removed from Wages in Box 1, then, choose a category of Other. Dec 10, 2023 · What does code S125 mean on W-2? Section 125 is the section of the IRS tax code where the items that can be deducted from employee pay on a pre-tax basis are defined. ". These plans allow employees to select pre-tax benefit options, reducing their taxable income. This refers to a Section 125 health insurance plan, named for that section of the tax code. Jun 7, 2019 · A Code S125 refers to a Section 125 plan which describes payroll deductions for an employee benefit. See full list on investopedia. Jul 13, 2018 · If you've wondered "What is S125 on my paycheck?" then you have a cafeteria plan at work. Dec 15, 2020 · The taxable wages boxes on your annual W-2 form show only your wages from which taxes were deducted; this doesn’t apply to Section 125 contributions. The “S125” entry indicates amounts related to these pre-tax benefits. You'll see most items relating to S125 in Box 14 of your W-2 form, although there are exceptions for dependent care. If your employer has enrolled you in a S125 plan, they may notate this on box 14 of your W-2 using the term "S125. afvjob vugrr rsch xtqs pjdj akreb omhd yknugqka mxc iqcpqc