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Payroll & Reporting

Your plan is designed for maximum flexibility while maintaining full legal compliance. You should carefully monitor entry dates for new employees and status changes.

Initial Plan Setup

All contributions are before all payroll tax withholdings (federal, state, and FICA).

  1. Following the initial enrollment period, compile an itemized listing of all salary-reduction elections (eligible pre-tax insurance premiums and flexible spending account elections).
  2. Enter these benefit elections as pre-tax salary reductions in your payroll software (or provide an itemized listing to your payroll processing company). Your software should re-compute payroll taxes as a result of salary-reduction benefit elections.

TIP:  Your software should have a field marked Section 125, cafeteria, flex, cafe, FSA, etc.  Some software has multiple fields for entry of specific allocations (one for insurance premiums, one for each type of FSA). Better yet, it may allow deductions to be flagged pre-tax or post-tax). 

TIP:  Make sure Dependent Care FSA elections are classified in a separate field, since unique reporting requirements apply to these amounts.

Notification of Changes

Please advise in writing (on appropriate forms) at least 2 weeks in advance of insurance premium change (see Pre-Tax Premium Notice), benefit additions, or new employee enrollments.

Discrimination Testing

Whenever there is an addition of highly compensated employees or key people, or a change in ownership, please notify your ProBenefits administrator so we can perform a discrimination compliance test and inform you of the results.

Regular Reporting

We will gladly provide needed reports or information as outlined in the Service Agreement. There may be a charge for other reports depending on the frequency and complexity of requests.

Year End Reporting

At calendar year end, Form W-2 amounts are calculated on NET PAY after flex contributions for each employee.

Unique Reporting Requirements:  Form W-2, Box 10
Just prior to January 1st of each new year, ProBenefits will provide a listing of Dependent Care FSA contributions made by participating employees, with instructions for including this as an informational figure on Box 10 of the Form W-2, as required by law.  

TIP:  If using a payroll service, request an advance copy of their proposed Box 10 figures. Investigate any discrepancies before W-2s are produced!

Related items

  • Benefits Bank Account

    Employers whose plans include FSAs should establish a checking account in the bank of their choice to serve as a "benefits" bank account.

  • Key Processing Dates

    Here's a quick reference to help you keep track of our schedule.

  • Legal Compliance

    Federal law requires your company to comply with IRS regulations on proper documentation and reporting.

  • Discrimination Testing

    A Flexible Benefit Plan may not discriminate in favor of key employees or highly compensated employees (see definitions below).

  • COBRA Compliance

    Learn how COBRA laws apply to your Flexible Benefits Plan.