Business Tax Strategy · ProfitGuard Plus
How much does an employer
save per employee?
About $600 per employee per year in employer payroll tax, and it repeats every payroll. Add the $1,400 in preventive care benefits each employee receives, and the combined value is about $2,000 per employee per year. The $600 is what the business keeps. The $1,400 lands on your team.
Quick answer
- Employers save about $500 to $600 per employee per year in FICA. It is not a one time credit. It repeats every payroll, going forward.
- Each participating employee also receives about $1,400 a year in preventive care benefits: telehealth, mental health support, care navigation, and chronic condition support.
- Together that is about $2,000 per employee per year in combined value. Only the $600 goes back to the business. The $1,400 goes to the employee.
- It is not a new line on the budget. The saving comes out of payroll taxes the business already pays.
- For 25 participating employees, that is about $15,000 a year in payroll tax savings. For 100, about $60,000.
- Your exact number depends on payroll, participation, and state and local tax. The estimator on our homepage shows it the moment you enter a headcount.
Where the $600 comes from
Each participating employee makes a pre-tax election under the Section 125 plan. That lowers the wages FICA is calculated on, so the employer's share of FICA drops on every paycheck. About $600 per employee per year is what that comes to for a typical team. Gross pay does not change.
What the $1,400 is, and where it lands
The $1,400 is the value of the preventive care benefits each participating employee receives through the plan. It is real, and it is why we quote the combined number. But it lands on your people, not your books. When someone tells you the whole $2,000 goes back to your budget, that is the wrong claim, and we do not make it.
Run your number
The homepage estimator shows your combined value before you give us a single detail. The worked examples for 25 and 100 employees are on the cost and savings page. When you want the exact figure, we model your payroll with your CPA in the loop.
Frequently asked questions
How much does an employer save per employee?
About $500 to $600 per employee per year in employer FICA, repeating every payroll. On top of that, each participating employee receives about $1,400 a year in preventive care benefits, for about $2,000 in combined value.
Is the $600 a one time credit?
No. It is a reduction in the employer's FICA on every payroll, going forward, for as long as the employee participates.
Does the whole $2,000 go back to my budget?
No. About $600 goes back to the business as payroll tax savings. The other $1,400 is benefits the employee receives. Both are real, and only one of them is money on your books.
What does a 25 person team save?
About $15,000 a year in payroll tax savings, and about $35,000 in preventive care benefits for the team, for about $50,000 in combined value. Your exact number depends on your payroll.
Does this change what my employees are paid?
No. Gross pay stays exactly the same. Each participating employee actually takes home about $40 to $80 more per paycheck.
This is education, not tax or legal advice. Actual savings vary by payroll structure, participation, and state and local tax. Talk to your CPA about your specifics before you decide. ProfitGuard Plus is a marketing name for a structure built on IRS code sections 125, 106(a), 105, and 213(d).
See your ProfitGuard Plus number
Enter your W-2 headcount and see the combined value first. Then we'll run your exact numbers. You can also read the full walkthrough on the ProfitGuard Plus page or call +1 (586) 899-1003.
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