Pre-tax payroll configuration
Program materials describe a fixed qualified pre-tax payroll deduction that reduces the applicable taxable wage base. The exact deduction, coding, and participating employees are established during employer-specific implementation.
Support: PCBP mechanics
Taxable wages and reimbursement
The program pairs the applicable pre-tax benefit structure with a non-taxable medical reimbursement position tied to defined medical benefits. Payroll should review each line rather than treating the program as one generic adjustment.
Support: Program mechanics and IRS Publication 15
Employee data and census
Recent payroll information and an employee census are used to identify potential participants, validate eligibility, and prepare the employer-specific analysis before final configuration.
Support: Client process overview
Testing and first payroll
The implementation process includes payroll setup, a payroll call, and mock or testing steps before go-live. Ongoing processes should address new hires, terminations, invoices, and reconciliation.
Support: Implementation processRelevant IRS guidance: IRS Publication 15 discusses employment taxes and certain medical-care reimbursements. Payroll and the employer’s advisers should verify the actual plan documents, payroll codes, reimbursement conditions, substantiation, and treatment of each participating employee.