salary reduction plan


Also found in: Financial.

salary reduction plan

n.
See 401(k).
American Heritage® Dictionary of the English Language, Fifth Edition. Copyright © 2016 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.
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Generally, with a salary reduction plan the lowest of these two limits may be excluded from income each year:
Generally, with a salary reduction plan the lower of these two limits may be excluded from income each year:
The Fresno Bee plans to layoff up to 26 of its 90 rank-and-file newsroom employees to cut costs if union members do not agree to a salary reduction plan, the newspaper reported this week.
Note that the 50-or-over catch-up contribution is not counted toward the Section 415 limit, so the dollar limit for a salary reduction plan is, in effect, $54,500 for 2009 ($49,000 plus the $5,500 catch-up amount).
CONFLICTING TRENDS Salary Reduction Plan Participants by Percent of Annual Earnings Contributed 1993 Contributed More Than 10% 13.8% Contributed Less Than 5% 26.2% Contributed 5% 18.6% Contributed Between 5-10% 26.7% Contributed 10% 14.7% 2003 Contributed More Than 10% 20.3% Contributed Less Than 5% 34.1% Contributed 5% 11.3% Contributed Between 5-10% 26.0% Contributed 10% 8.4% Source: Employee Benefit Research Institute estimates Note: Table made from pie chart.
Employers should be encouraged to implement a Section 125 plan (also known as a cafeteria plan or salary reduction plan) to obtain these tax savings.
Also known as premium-only plans (POP), IRC section 125 plans are the most common form of salary reduction plan. They reduce employee taxes as well as employer matching FICA taxes for group insurance (typically health) premiums.
As for "salary reduction plan" Doesn't this sound like something that you could live without?
The type of salary reduction plan, however, varied considerably.
Under a salary reduction plan, employees have an election to receive cash or have amounts contributed to the SEP.
Employees who participate in cafeteria plans, through a salary reduction plan.
A salary reduction plan allows you to convert potentially non-deductible expenditures into deductible ones.