What is the percentage of tax deduction that an employer receives for paying employees’ health care costs?
For instance, if my employer pays $2,780 per year for my health care (he matches my $2,780), how much of a tax deduction does he receive on that amount? I’d like to know the percentage, so that I can figure other amounts also. Thank you!
I live in the U.S.!
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August 21st, 2010 at 10:18 am
None. However the healthcare cost will be expensed and be part of your employer total P&L. This will reduce its profit and you could assume that by default reduce its taxes. But truly this is a benefit to you and a loss to them. If you want to estimate the potential tax impact on them paying you heathcare I would use Fed + State rate of about 40% (but this does not mean they have a 40% taxrate). There is not tax advantage for corporation to pay healthcare.
August 21st, 2010 at 10:52 am
Employers do not receive “tax deductions” they receive deductions from gross sales/income and employee healthcare is an allowed expense.
August 21st, 2010 at 11:08 am
Your employer can generally deduct the entire amount that he pays toward your health care insurance.