FB pixel

Health premium tax savings calulator

Employee Calculator
Employer Calculator

See how much less your premium costs when deducted pre-tax via Section 125.

Default assumes ~8% average effective Oregon tax rate

Effective cost per month

$150.70
You save $49.30/mo in taxes.

Effective cost per pay period

$69.58
You save $22.80 per pay period.

Annual savings

$591.60

Total tax rate applied

24.65%
For education only — not tax advice. Actual savings depend on your real marginal rates.

Estimate how pre-tax employee premiums lower employer payroll taxes.

Enter the monthly amount employees contribute pre-tax

Employer tax savings per employee (annual)

$235.80

Total employer tax savings (annual)

$2,358.00
Assumes valid Section 125 plan; FUTA/SUTA and wage bases vary by state.

Understand your true health premium costs

Our health premium tax savings calculator helps employees and employers see how much pre-tax deductions can reduce the real cost of health insurance premiums and payroll taxes. Using a tool like this can make open enrollment easier and show the value of offering benefits through a Section 125 plan.

If you’d like help setting up pre-tax premium deductions, or you want to explore better coverage options for your team, contact us today. We can review your current plan, compare alternatives, and show you exactly how much you could save with the health premium tax savings calculator results applied to your group.

Frequently asked questions

How does pre-tax premium deduction work in Oregon?
Pre-tax premium deductions let Oregon employees pay for health insurance before state, federal, and payroll taxes are applied. This lowers taxable income and reduces Oregon state income tax (which averages around 8% for many workers). The health premium tax savings calculator shows how much you could save each month and per year based on these Oregon rates.

Do Oregon employers need a Section 125 plan?
Yes. Oregon employers must have a Section 125 Cafeteria Plan to legally deduct premiums pre-tax. It’s a simple document we can help you put in place so you and your employees can start saving immediately.

How much can Oregon employers save?
Employers save on FICA, FUTA, and Oregon state unemployment (SUTA) taxes when employees contribute pre-tax. For every $10,000 in pre-tax deductions, most Oregon employers save about $765 in FICA alone, plus additional state payroll tax savings.

Do pre-tax deductions affect Oregon Paid Leave contributions?
Yes. Pre-tax deductions lower gross wages used to calculate Oregon Paid Leave (Paid Leave Oregon) contributions. This slightly reduces both employee and employer contributions — an extra savings most employers don’t realize.