Meaning & Definition

cafeteria plan

A cafeteria plan is a benefits plan where employees choose from a variety of pre-tax benefits, allowing them to customize their benefits package to meet their individual needs. Options may include health insurance, retirement plans, flexible spending accounts, and other perks. Cafeteria plans offer flexibility and tax advantages, enhancing employee satisfaction and retention. They also help employers manage benefits costs and comply with regulations by offering standardized yet customizable benefits options.