The math every owner already knows
Give an employee a $200-a-month raise and it costs the company more than $200 — payroll taxes ride on top. And the employee doesn’t take home $200 either, because taxes come out of their side too. Both of you pay for the raise; neither of you receives all of it.
That’s not a reason to skip raises. It’s a reason to know that salary is only one lever — and for benefits, the math can work differently. According to the U.S. Bureau of Labor Statistics, benefits already make up roughly 30% of what employers spend on compensation. The question is whether those dollars are structured to work as hard as they could.
How benefit structures change the math
The tax code recognizes certain benefit structures that let dollars flow to employees as benefits rather than raw salary. Done correctly — and “correctly” is the operative word — employees can see stronger benefits and, in many designs, an increase in their net take-home pay, while the company may reduce its payroll-tax load at the same time.
These structures are designed to work alongside your existing group health insurance, not replace it. Anything that asks you to drop the coverage your team relies on should get a hard look; the strategies worth considering complement what you already offer.
A raise vs. a benefit dollar, side by side
Qualitatively, here’s how the two levers compare — the exact numbers depend entirely on your company and plan design, which is what an evaluation is for:
| A straight raise | A tax-advantaged benefit dollar | |
|---|---|---|
| Company payroll taxes | Increase with the raise | May decrease, depending on structure |
| Employee take-home | Increases, minus taxes | May increase, plus stronger benefits |
| Your existing health plan | Unchanged | Unchanged — designed to work alongside it |
| Compliance care needed | Minimal | Real — structure and documentation matter |
| Who should be at the table | You | You, your CPA, and a licensed professional |
What to ask your CPA
Before adopting any benefit strategy, put these questions in front of your CPA — the answers decide whether a structure fits your company:
- 1Which tax-advantaged benefit structures fit a company our size, and what does the IRS require of each?
- 2What testing or eligibility requirements apply so the plan treats employees fairly and stays compliant?
- 3What documentation do we need to keep, and who administers it?
- 4How would this interact with our existing group health plan and payroll provider?
- 5What does the math look like for our actual payroll — company savings and employee take-home?
Where I fit in
I’m not your CPA, and I don’t play one. My job is the benefits side: showing you what a structure looks like for a company like yours, in plain English, and then working alongside your CPA so the design is done right — or telling you honestly that it doesn’t fit.
The look costs nothing. Bring your headcount and your current benefits picture, and you’ll get a plain-English walkthrough of what’s possible — no obligation, and your CPA stays in the loop from the start.
Educational only — not tax or legal advice. Benefit-strategy availability and results vary by company, state, and plan design; always involve your CPA or tax professional before making changes.
About the author
Ken Kaneversky is a licensed independent insurance agent (NPN #22128544) in St. George, Utah — a U.S. Army veteran and cancer survivor licensed in 10 states: UT, IN, NV, ID, WY, SD, HI, CA, AK, and TX. He works with A-rated carriers and gives every family the same thing: a personalized illustration, not a sales pitch. Read Ken’s story