HSA Contritbutions thorugh Payroll Deduction

[Guest HR Analyst]

We currently allow employees to contribute to their HSA via payroll deduction. I understand that there are many benefits to associates as it's done one pre-tax basis. Are there tax-advantages to the employer as well? For example, if the associate contributes $100 bi-weekly to their HSA, from the employer's perspective - does that reduce the amount of taxable wages the employer has to pay? Thanks!

[JanetM]

ER saves FICA and medicare also at federal level. State tax rules vary.

[Jacmo]

If your employees are making pre-tax payroll deductions/contributions to their HSA, then they're doing it through a 125 plan. The advantages to the employer are the same for this benefit as for any other benefit under the 125 plan. I.E., the employer saves the matching FICA on every dollar pre-taxed thru the 125 plan. (And perhaps FUTA and SUTA taxes).