How does this affect my paycheck?
You will see new pre-tax deductions for the wellness program on your paycheck. These reduce your taxable income. There is no change to your net take-home pay.
What are these new deductions on my paycheck?
You will see three line items related to the program on your pay stub:
PCMP125 or IHP125 — A pre-tax deduction that lowers your taxable income, creating tax savings.
PCMPREI or IHPREI— A post-tax reimbursement that offsets the above deduction.
PCMPSAV or IHPSAV — This appears as a deduction, but it actually represents the difference in tax savings generated during that payroll run. The PCMPSAV amount is not taken from your net pay. Instead, it is a portion of your tax savings that is being redirected to fund your comprehensive benefit package.
How does this affect my taxable wages?
Because deductions are pre-tax under Section 125, your taxable wages are reduced, which may lower your income tax liability.
How does this affect my Social Security?
Pre-tax deductions reduce your Social Security wages, which could have a minimal impact on future Social Security benefits.
When will deductions start appearing on my paycheck?
Deductions begin on the first full pay period after enrollment is processed.
Why is my deduction amount different than expected?
Deduction amounts can vary based on pay frequency, proration for partial periods, or plan changes. Contact [email protected] for a detailed explanation.
Are these deductions pre-tax or post-tax?
The wellness program uses pre-tax deductions under a Section 125 cafeteria plan.
What happens to my deductions if I go on leave?
Deduction handling during leave depends on your employer's policy. Contact HR for guidance on leave-related benefit questions.
How do I get a record of my deductions for tax purposes?
Your deductions will appear on your W-2. For detailed records, contact your HR or payroll department.
What is a Section 125 Plan and how does it benefit me?
A Section 125 Plan allows certain benefits to be paid with pre-tax dollars. That means less taxable income for you, resulting in lower federal income tax and FICA taxes.
Why does my W-2 look different now?
Your W-2 reflects a lower taxable wage, thanks to the pre-tax deduction. This is expected and entirely compliant with IRS regulations.
How does this affect my tax return at the end of the year?
You may receive a slightly smaller tax refund, but that's because you paid less in taxes throughout the year. You're not losing money — you just overpaid less.