How does a cafeteria plan work? Employer contributions to the cafeteria plan are usually made pursuant to salary reduction agreements between the employer and the employee in which the employee agrees to contribute a portion of his or her salary on a pre-tax basis to pay for the qualified benefits.

Is a cafeteria plan worth it?

Cafeteria plans are particularly good for participants who have regular expenses related to medical issues and child care.

What's included in cafeteria plan?

Cafeteria plans allow employees to choose from a variety of pre-tax benefits. These plans are often more flexible than others. Employees have several pre-tax options including insurance benefits, retirement plans, and benefits that help with life events.