Should You Offer Your Employees Retirement Benefits?

As with offering your employees health insurance coverage, offering retirement benefits is a great way to boost your compensation package, and both attract and retain a valued workforce. In some instances, small business owners can even take advantage of retirement plans for themselves.

not sure whether offering retirement benefits to your employees is worth it, here are some of the advantages associated with doing so:

wants to encourage

so there are some

to offer

packages to

to be had when you do

If you’re

Enjoy tax advantages for your business Congress

employers

retirement benefit

employees,

significant tax advantages

Keep your employees working hard for you Research has shown that retirement benefits based on profits, can make employees more motivated within their role and more inclined to work harder and more effectively

Attract the best employees for the job

When it comes to attracting new employees, a retirement package may be the thing that makes them want to come and work for you, and not another company

Supplement your compensation package Many small businesses have high start-up costs or little cashflow, but with a retirement plan, you can use it to supplement your compensation package Save for your own retirement Offering retirement benefits to your employees allows you to also take advantage of them and save for your own retirement

Do you need professional guidance when offering retirement benefits?

With the complexities of pension rules and bewildering tax aspects of retirement plans, it’s never a bad idea to seek professional help when offering retirement packages to your employees. That said, you should try to have a basic understanding of the different plan types and determine why you want to offer a plan, before consulting with a tax advisor or accounting professional: All pension plans are one of two types = qualified or non-qualified, but they can be further divided into the broad categories of defined benefit and contribution plans, and hybrid plans.

a retirement plan qualifies, it will meet the Employee Retirement Income Security Act of 1974 (ERISA) and Internal Revenue Code requirements, while also being qualified for some hefty tax benefits:

Any income the plans assets generate, is not subject to income tax because the income is earned and managed within the framework of a tax-exempt trust

Employersare entitled to current tax deductions for contributions to the plan.

Participants of the plan are not required to pay income tax on the amounts contributed on their behalf, until the year that the employer distributes the funds to them

If

●

● In some instances, qualified plan beneficiaries are given special treatment when it comes to their taxes

If a retirement plan doesn’t qualify, it will not meet the requirements of ERISA and the Internal Revenue Code, and beneficiaries are not permitted to take advantage of preferential treatment when it comes to their taxes.

The majority of small business owners opt to offer their employees a retirement plan that is qualified as an employee benefit, and this is simply down to its tax advantages. However, if you would like to discuss your options in further detail, you can consult with an accounting specialist.

Apollo Payroll is dedicated to delivering expert advice, responsive service, and highly accurate payroll processing and reporting to ensure the success and growth of the business that we serve. Our services include comprehensive payroll services in Homestead and other cities in Miami-Dade County, employee background check and group health insurance in Miami & Coral Gables

Turn static files into dynamic content formats.

Create a flipbook