Implementing a fringe benefit plan is one of the most effective ways to save bottom-line dollars, especially if you are a federal, state, or municipal contractor performing projects and services that are subject to The Davis Bacon or The Service Contract Act.
When working on a public works job, contractors are usually required to pay a “fringe” amount for every hour each employee works. Paying the fringe as cash wages is the most expensive method for contractors because all wages are subject to the following payroll burden:
- FICA Contributions
- Federal Unemployment Taxes
- State Unemployment Taxes
- Workers Compensation
- General Liability
For each fringe dollar paid as wages, you incur an average 25% payroll taxes on every fringe dollar paid.
Let Contractors Benefit Solutions help you avoid unnecessary payroll burden by directing fringe dollars into bona fide employee benefit plans. By structuring fringe benefits such as health insurance, retirement plans, and other qualified benefits, you can maximize the value of compensation to your employees while minimizing your payroll taxes. This strategic approach not only aids in compliance with prevailing wage laws but also enhances employee satisfaction and retention.
We specialize in designing customized fringe benefit plans that align with the specific requirements of government contracts. With our expertise, you can navigate the complexities of compliance and tax optimization, ensuring that your resources are used efficiently and effectively.
Contact Contractors Benefit Solutions today to explore how our solutions can support your business objectives while saving you significant costs in payroll taxes and administrative expenses.
