How it works
A pre-tax deduction costs less than it takes from your paycheck, because the money isn't taxed. Health, dental and vision premiums, HSA contributions through payroll and FSA elections go through a cafeteria plan, so they skip federal and state income tax and FICA. A pre-tax 401(k) skips income tax but not FICA. Roth and after-tax deductions save nothing now. In the example, moving from a PPO to a high-deductible plan with an HSA, raising the dependent care FSA and adding a Roth 401(k) takes $1,027.77 from each paycheck instead of $688.45, but saves $8,383.25 of tax over the year instead of $5,789.15, so take-home pay falls by $239.55 a paycheck, not the full $339.32. The spreadsheet adds 25 lines, employer money and checks against the 2027 HSA, FSA and 401(k) limits.