Fintra Payroll

Pre-Tax Deductions With the Wage Bases Right

Section-125 pre-tax deductions reduce federal, FICA, and state wages; the engine buckets each deduction correctly and refuses to let pre-tax amounts exceed gross.

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What counts as pre-tax

Pre-tax deductions lower the wages that taxes are computed on. Fintra distinguishes the kinds - Section-125 cafeteria (pre-tax for FIT, FICA, and state) and 401(k) (pre-tax for FIT and state only) - and buckets each into the right pre-tax category, tracking retirement, Section-125, and other-pre-tax separately.

  • Section-125 pre-tax: reduces FIT, FICA/FUTA, and state wages
  • 401(k) elective deferral: reduces FIT and state, not FICA
  • Per-line overrides for FIT, FICA, and state when a plan needs it
  • Pre-tax amounts tracked by kind for accurate W-2 boxes
  • Guard: pre-tax deductions can never exceed gross pay

Safety guards

The taxability matrix

KindFITFICA/FUTAState
Section-125 pre-taxYesYesYes
401(k) elective deferralYesNoYes
Post-tax (for contrast)NoNoNo
Which wage bases each pre-tax kind reduces

Inside Fintra

The pre-tax buckets flow directly into W-2 Box 1, Box 3/5, and Box 12, so what you deduct during the year is what appears on the year-end form.

Frequently asked questions

Which deductions are pre-tax in Fintra?

Section-125 cafeteria deductions (pre-tax for FIT, FICA, and state) and 401(k) elective deferrals (pre-tax for FIT and state, not FICA). Each is bucketed and taxed per the matrix.

What stops a bad deduction from issuing a broken check?

The engine refuses to calculate if pre-tax deductions push a taxable base below zero or make net pay negative, and it asserts a balancing invariant before saving.

Can I override the tax treatment for a specific plan?

Yes - per-line flags override the FIT, FICA, and state reductions when a particular deduction requires it.

Do pre-tax deductions affect the W-2?

Yes. They reduce the relevant wage boxes and, for retirement, populate Box 12 - all derived from the per-kind pre-tax tracking during the year.

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Pre-tax, precisely

Reduce the right wage bases for every pre-tax deduction, with guards built in.

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