Pre-tax benefits

Pre-tax benefits are employer-sponsored programs that allow employees to pay for certain expenses, like health insurance or retirement contributions, with money deducted from their paycheck before taxes are applied. This reduces taxable income, which can lower the amount of income tax you owe. Essentially, you're using some of your earnings to cover benefits, and in doing so, you pay less in taxes. This arrangement helps employees save money on taxes while gaining access to valuable benefits.