A "cafeteria" benefit plan is one in which employees can choose between cash compensation or a number of nontaxable benefits. The benefits can include such things as health and accident plans, group term life insurance, legal service plans, paid vacation days, and certain other qualified benefits. These plans can provide tax savings to both employees and employers. The main advantage of these plans is that they let you compensate employees with something other than salary. Money spent to buy benefits is not subject to income tax or FICA, as salary is. Both employer and employee thus save tax money. These plans also let employees tailor their benefit packages to their particular needs. Not all employees need a given type of benefit (such
