The employer and employees can both benefit from a Flexible Spending Account. The Flexible Spending Account allows the employer to offer a new benefit for their employees without a large premium or plan contribution required. Employees have increased take home pay because pre-tax dollars are taken for the contribution, which in turn reduces their tax bracket and income taxes. Employers get a lower payroll tax as well.

Employees can get cheaper dependent care because it is not taxed while using a Flexible Spending Account. The Flexible Spending Account also helps employees throughout the year meet their expenses by regularly deducting directly from their pay.

This article was last updated on December 13, 2012