Human Resources
Premium Conversion Plan (pretax)
Program Basics
The benefits of Premium Conversion are...
- your taxes will decrease
- your net take-home pay will increase
The example below shows how an employee saved $504 in taxes one year.
| Without Premium Conversion | With Premium Conversion | Savings with Premium Conversion | |
| Gross Income | $36,000 |
$36,000 |
|
| Expenses run through Premium Conversion | 0 |
-$1,800 |
|
| Taxable Income | $36,000 |
$34,200 |
|
| Federal Tax* | -5,400 |
-5,130 |
270 |
| State Income Tax* | -1,926 |
-1,830 |
96 |
| FICA | -2,754 |
-2,616 |
138 |
| Income After Taxes | $25,920 |
$24,624 |
|
| Expenses not run through Premium Conversion | -1,800 |
0 |
|
| Your Spendable Income | $24,120 |
$24,624 |
$504 |
This employee could reduce taxes by $504 by using Premium Conversion! |
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* Based on estimated federal tax of 15% , state tax of 6%, and FICA of 7.65%