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Video: Learn How to Increase Profit Margins & Employee Retention in 5 Minutes

| December 09, 2021
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Currently, job openings are staying open 67% longer than they were in 2019, but the unemployment rate is 15% higher today than it was in December of 2019. This is a statistic that, under normal circumstances, would not make sense. Many employers have also seen a startlingly high jump in the rate of turnover, specifically with new employees during their first 90 days of employment.

 

Pair these statistics with the early termination of the Employee Retention Tax Credit, and it is no surprise that small businesses are still hurting.

 

However, there may be a potential solution for some employers through an innovative payroll structure, that will provide a tax break to employers and provide employees additional benefits that are entirely funded with tax credits. You can see a quick 5-minute video covering a PTR Plan (Payroll Tax Reduction Plan) below or read our full article over this topic in a previous article.

 

The key highlights of a PTR Plan are:

  • On average employer’s reduce their payroll tax burden by over 15%
  • Employee retention is increased by 59%
  • Employees receive tax credits to fund additional benefits
  • On average employee benefits quadruple and their take-home pay DOES NOT change
  • Out of pocket medical costs for employees are greatly reduced or eliminated

Employer Eligibility Requirements:

  • 25 or more full time W2 employees making at least $25,000 a year.
  • Employer must currently offer a healthcare plan

Employee Eligibility Requirements:

  • Must currently have healthcare (it does not have to be with the employer, it can be through a spouse, parent the exchange ect)
  • Must be full-time with the employer
  • Must be a W2 Employee
  • Must be 18 years or older
  • Must have an annual income of $25,000 or more with the same employer

 

Dan Nuwash, MBA is the Founder and Managing Partner of Finance For Thought and can be reached through our website here.

If you’d like to obtain more information over a PTR Plan you can schedule an introductory Zoom meeting or call with us below.

 

Disclosures:

TAX- To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purposes of avoiding penalties that may be imposed by law. Each tax payer should seek tax, legal or accounting advice from a tax professional based on his/her individual circumstances.

 

TAXES- This material is for informational purposes only. Neither APFS nor its Representatives provide tax, legal or accounting advice. Please consult your own tax, legal or accounting professional before making any decisions.

 

Sources:

https://www.irs.gov/

https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/retention-top-benefits-objective.aspx

https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/alter-benefits-attract-retain.aspx

https://www.irs.gov/government-entities/federal-state-local-governments/faqs-for-government-entities-regarding-cafeteria-plans

https://www.treasury.gov/press-center/press-releases/pages/hp526.aspx

https://www.investopedia.com/terms/c/cafeteriaplan.asp

https://www.investopedia.com/articles/personal-finance/080816/section-125-plan-cafeteria-plan-how-does-it-work.asp

https://www.investopedia.com/ask/answers/111015/are-cafeteria-plans-subject-fica-erisa-or-futa.asp

The Employment Situation - November 2021 (bls.gov)

US Unemployment Rate by Month (multpl.com)

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