Section 125 Plans for Staffing Agencies
For employers with 50+ employees
Staffing firms are one of our largest groups of clients. As the W-2 employer for your workers, you carry the payroll taxes on a large, fast-changing workforce, and that is exactly where a Section 125 plan saves the most.
Why Section 125 Fits Staffing Agencies
- You are the W-2 employer: Payroll taxes on your placed workers are yours, so the savings on those wages are yours too.
- Constant turnover: Every employee is automatically enrolled and free to opt out, so the plan keeps working as workers start and finish assignments.
- A recruiting advantage: Higher take-home pay and no-copay virtual care help you attract workers in a competitive market.
- Nothing out of pocket: There is no setup fee and no minimum contract, and the fee is paid from the savings.
What the Program Delivers
- Employer savings: most employers save $650–$850 per employee per year in payroll taxes
- Employee take-home pay: typically rises about 4–6%, with the same gross pay
- Cost: no setup fee, no minimum contract, and no out-of-pocket cost — the fee is paid from the savings
- Enrollment: every employee is automatically enrolled and free to opt out
- Existing coverage: your current health plan stays exactly as it is
Estimated Annual Savings in Staffing Agencies
| Workforce | At $650/employee | At $850/employee |
|---|---|---|
| 50 employees | ~$32,500/yr | ~$42,500/yr |
| 250 employees | ~$162,500/yr | ~$212,500/yr |
| 500 employees | ~$325,000/yr | ~$425,000/yr |
Estimates use $650–$850 in employer payroll tax savings per employee per year. Calculate your own number.
Getting Started
The program works with all major payroll systems, and setup includes dry runs on a live payroll before anything changes.
Setup takes 30–60 days in five steps, with no setup fee and no minimum contract. The program requires at least 50 employees and is available in 40 states (see state availability).
Frequently Asked Questions
Does a Section 125 plan work for a staffing agency?
Yes. Staffing firms are among our largest client groups. The program requires at least 50 employees.
How does it handle high turnover?
Every employee is automatically enrolled and free to opt out, so the plan keeps working as workers come and go.