Nonprofits Chose Benefits Over Taxes
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The tax code has created interesting incentives for all businesses to expand benefits over salary, regardless of whether they are a for-profit or nonprofit. These benefits may include health, dental, vision, retirement, adoption and legal.
Unemployment, Medicare and Social Security taxes are tied to the payroll. Payments for benefits lowers the cost for the employer and the employee.
The other aspect to using benefits over salary is the ability of a business to make changes to control the cost. The taxes are nonnegotiable and it is harder to reduce a persons salary.
The congressional move to tax health benefits just might hurt nonprofit employees more since many chose the benefit route to compensate employees.
