In 2025, employers are asked to offer competitive pay and good health benefits while keeping costs in check. That is why Section 125 pre-tax deductions have become one of the hottest topics in payroll and HR circles this year.

But here’s the real reason they’re trending: They’re no longer just a line item on a pay stub. With programs like Elevate+, they’re a gateway to serious payroll savings, higher employee satisfaction, and full-spectrum wellness, all without increasing your benefits budget.

What Are Section 125 Pre-Tax Deductions?

Under IRS Section 125, employers can offer what’s called a “cafeteria plan.” This allows employees to pay for qualified benefits, like health insurance, before taxes are withheld. The effect is: 

• Lower taxable income for the employee
• Reduced payroll tax liability for the employer

These pre-tax deductions are perfectly legal, fully IRS-compliant, and historically underutilized. In 2025, that shift is becoming hard to ignore.
More and more employers are seeing the bigger picture, by combining Section 125 deductions with thoughtful wellness programs, they’re not just cutting payroll taxes. They’re building a healthier, more motivated workplace that actually works better for everyone.

The Elevate+ Difference: Going Beyond Standard IRS Section 125 Plans

At Elevate Benefits, the Elevate+ plan takes the basic premise of Section 125 and transforms it into a fully managed, benefit-rich, and automated solution.

Here’s how it’s different:

• It leverages Section 125 to enable pre-tax deductions
• It includes a Preventative Care Management Plan (PCMP)
• It integrates a Specialized Insurance Medical Reimbursement Plan (SIMRP)
• It automates everything, including deductions, reimbursements, and compliance

This isn’t just an IRS Section 125 plan. It’s a smarter way to deliver modern benefits with zero cost to the employer, no admin burden, and real ROI for both sides.

Why 2025 Is the Year of Payroll Integration

Today’s HR and finance teams are under pressure to do more with less. That’s why seamless payroll integration has become essential and a major reason why Elevate+ is being adopted by employers across industries.

Here’s what Elevate+ integrates with payroll systems to achieve:

• Pre-tax deductions processed automatically
• IRS and ERISA compliance built-in
• Employee net pay increases of ~$100/month
• Employer savings of ~$600/year per W2
• Fewer errors, faster onboarding, and consistent reporting

In short, Elevate+ doesn’t just work with payroll, it becomes a strategic extension of it.

What Employers Get with Elevate+

When you use Elevate+ for your workforce, you’re not just meeting benefit expectations, you’re exceeding them, while cutting costs.

Financial & Operational Wins:

• Save ~$600 annually per W2
• Zero out-of-pocket investment
• Fully automated setup (30–45 days)
• 5–10% reduction in healthcare costs over time
• Immediate bottom-line impact with long-term gain

Whether you have 50 employees or 5,000, these savings scale fast and they come without lifting your payroll budget a dime.

Why Employees Will Thank You

Let’s be clear: most employees don’t get excited about “pre-tax deductions.” But they do care about bigger paychecks and real, usable health benefits.

Here’s what Elevate+ delivers to your team (at no cost to them):

Complete Wellness with $0 Copays:

• 24/7 Telemedicine & Virtual Care
• Spousal & Dependent Coverage
• In-person Urgent Care
• Addiction Recovery & Mental Health Support
• Couples Counseling & EAP Access
• Mayo Clinic health dashboard & wellness programs
• Diet & stress tracking tools
• Health vitals facial scan

All of this is offered at $0 copay, including RX medications. There’s no reduction in take-home pay, no hidden fees, and everything applies to their family as well.

Why Section 125 Pre-Tax Deductions are Important 

So why are Section 125 pre-tax deductions making waves in 2025?

Because for the first time, solutions like Elevate+ prove they can be used to create truly modern benefits programs that are:

• Fully IRS-compliant
• Easy to roll out
• Cost-neutral for employers
• Tangibly life-enhancing for employees
• Fully integrated with payroll platforms

It’s the rare benefit that doesn’t require compromise.

Elevate+ vs Traditional Section 125 Plans

Feature	Traditional Section 125	Elevate+
Pre-Tax Deduction	Yes	Yes + full automation
Employee Net Pay Boost	No	~$100/month increase
Mental Health & Recovery Tools	No	Yes
Mayo Clinic Wellness Suite	No	Yes
Family Coverage	Optional or extra	Included
$0 Copays (Telehealth, RX)	Rare	Yes
Setup Time	Manual	30–45 days, automated
Employer Cost	Variable	$0

Elevate Benefits: Building the Modern Plan Around Payroll

With Elevate+, you don’t just offer a Section 125 benefit, you build a platform that uses it intelligently. You provide care your employees will actually use. You reduce taxes, cut claims, and boost take-home pay. And you do it all while staying compliant and avoiding extra admin.

Get Ahead of the 2025 Tax Trend: Master Section 125 Today

Want to see what Elevate+ could save you? What could it offer your team? Book your 10 min consultation now.