• Business
  • Crypto
  • Investing
  • Lifestyle
  • Money
  • Glossary
    • A
    • B
    • C
    • D
    • E
Search
Finance Reference
  • Business
    • 20 Years of Yerkin Tatishev and Kusto Group’s Kazpetrol Group
      How to Analyse Yield Curves: Insights for Bond Investors
      3 Ways a Digital Lending Platform Can Elevate Your Business
      7 Steps to Ensure a Smooth Migration to Cloud-Based Professional Tax Software
      5 Common E-Commerce Fulfillment Mistakes Your Business Must Avoid
  • Crypto
    • Bitcoin Logo: What is the reason behind its success?
      The Benefits of Practicing Safe Storage for Cryptocurrency Assets
      Tax Planning for Cryptocurrency Investors in Canada
      Avis sur Paymium : Plateforme Crypto Française sous la Loupe
      Before You Bet: A Beginner’s Guide to Understanding Crypto’s Volatility and Risk
  • Investing
    • Bonds vs. Equities: Strategic Allocation for GCC Traders
      Crafting Custom Investment Portfolios: Andy Gitipityapon’s Methodology
      Investing in Gold: How to Secure Your Wealth in Uncertain Times
      MT5 overview, will it fit you?
      TechBerry Review – A Popular Automated Trading Platform
  • Lifestyle
    • What Makes Switzerland One of the Safest Countries in the World
      Is Homeowners Insurance Required? Answering Popular Homeowners Insurance Questions
      Why Certain Poker Strategies That Work Online Fall Apart in Live Games and Vice Versa
      Payment Methods for the Modern Bettor: Is the Most Popular Option the Best?
      10 Sustainable and Budget-Friendly Ways to Reward Yourself
  • Money
    • Budgeting Hacks for Families Living on a Single Income
      Understanding Alternative Payment Methods in a Digital World
      The Hidden Benefits of Loan Consolidation for Everyday Borrowers
      Enhancing the U.S. Economy: How Soft2Bet’s Innovation and Foundation Are Generating Jobs and Opportunities
      How Tariffs Could Affect Mortgages in the U.S. in 2025
  • Glossary
    • credit card
      Understanding Credit Card Meaning: A Complete Guide
      Oculus Gift Card
      The Perfect Gift for Gamers – The Oculus Gift Card
      walgreens Cash Checks
      Does Walgreens Cash Checks In 2023? Complete Guide
      How Many Nickels Make $2?
      How Many Nickels Make $2? A Quick Guide
      Visa Provisioning Service
      What is the Visa Provisioning Service on My Bank Statement? Explained
      AllABCDE
  • Glossary
  • C

Cafeteria Plan

By
rjonesx
-

Definition

A cafeteria plan is a type of employee benefit plan offered in the United States pursuant to Section 125 of the Internal Revenue Code. Its name comes from the earliest such plans that allowed employees to choose between different types of benefits, similar to the ability of a customer to choose among available items in a cafeteria. Qualified cafeteria plans are excluded from gross income. To qualify, a cafeteria plan must allow employees to choose from two or more benefits consisting of cash or qualified benefit plans. The Internal Revenue Code explicitly excludes deferred compensation plans from qualifying as a cafeteria plan subject to a gross income exemption. Section 125 also provides two exceptions.


Cafeteria Plan

What is a ‘Cafeteria Plan’

A Cafeteria plan is an employee benefit plan that allows staff to choose from a variety of benefits to formulate a plan that best suits their needs. Cafeteria plan options may include health and accident insurance, cash benefits, tax advantages and/or retirement plan contributions.

Explaining ‘Cafeteria Plan’

Similar to a cafeteria where individuals select their food of choice, employees may choose benefits of their choice. These plans become more useful as diversity within workforces continues to grow. For example, the benefit needs of young families may differ greatly from those of a single person.

Further Reading

  • E. Banks, The Palgrave Macmillan Dictionary of Finance, Investment and Banking© Erik Banks 2010 – link.springer.com [PDF]
  • Corporate Financial Assistance for Child Care. The Conference Board Research Bulletin No. 177. – eric.ed.gov [PDF]
  • The role of benefits in employee motivation and retention in the financial sector of the Czech Republic – www.tandfonline.com [PDF]
  • Financial innovation for an aging world – www.nber.org [PDF]
  • Theories of the Financial Planning Profession. – search.ebscohost.com [PDF]
  • Cafeteria Plan Compliance: The Choices for Employees Can Be Many, but the Recipes for Employers Are Exact – www.questia.com [PDF]
  • Employee benefits in small medium enterprises (SMES): practice and challenges – papers.ssrn.com [PDF]
Previous articleHead Of Household
Next articleCanceled Order
rjonesx

RELATED ARTICLESMORE FROM AUTHOR

credit card

Understanding Credit Card Meaning: A Complete Guide

Oculus Gift Card

The Perfect Gift for Gamers – The Oculus Gift Card

walgreens Cash Checks

Does Walgreens Cash Checks In 2023? Complete Guide

EDITOR PICKS

SPX vs SPY: Which is Better for Trading Options on the S&P 500?

FAAMG Stocks

Should I invest in additional life coverage?

Earnings Before Tax (EBT Formula)

Per Stirpes vs Per Capita

Quarter (Q1, Q2, Q3, Q4)

Latest

What Makes Switzerland One of the Safest Countries in the World

Car Wreck Aftermath: Legal Help for Medical Bills, Repairs, and More

Is Homeowners Insurance Required? Answering Popular Homeowners Insurance Questions

Budgeting Hacks for Families Living on a Single Income

Understanding Alternative Payment Methods in a Digital World

The Hidden Benefits of Loan Consolidation for Everyday Borrowers

  • A
  • B
  • C
  • D
  • E
  • F
  • G
  • H
  • I
  • J
  • K
  • L
  • M
  • N
  • O
  • P
  • Q
  • R
  • S
  • T
  • U
  • V
  • W
  • X
  • Y
  • Z
  • About
  • Accessibility
  • Privacy
  • Sitemap