Business / Taxes / Pretax Contribution: A pretax contribution is money that you agree to have subtracted from your salary and put into a retirement savings plan or other employer sponsored benefit plan. Your taxable earnings are reduced by the amount of your contribution, which reduces the income tax you owe in the year you make the contribution. Some pretax contributions, including those you put into your 401(k), 403(b), or 457, are taxed when you withdraw the amount from your plan. Other contributions, such as money you put into a flexible spending plan, are never taxed.
Business / Taxes / After-Tax Contribution: An after-tax contribution, or excess deferral, is money you put into your 401(k) or other employer sponsored retirement savings plan in addition to your pretax contribution. You might make an after-ta MORE
Business / Taxes / Matching Contribution: A matching contribution is money your employer adds to your salary reduction retirement savings account, such as a 401(k). It's usually a percentage of the amount you contribute up to a cap that the e MORE
Business / Taxes / Federal Insurance Contributions Act (FICA): The Federal Insurance Contribution Act (FICA) is the federal law that requires employers to withhold 6.2% from their employees' paychecks, up to an annual earnings cap. Employers must match employee w MORE