Under a cafeteria plan, employees may use pre-tax payroll deductions for certain qualifying costs.
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True! Under a cafeteria plan, employees can choose from a variety of pre-tax benefits such as health insurance, flexible spending accounts, and dependent care assistance, allowing them to customize their perks while reducing their taxable income. This is a win-win as it helps employees save money while also benefiting employers by lowering payroll taxes!

But beware of common pitfalls! Some employees might overlook the use-it-or-lose-it rule for flexible spending accounts, leading to unspent funds at the end of the year. Always keep track of your spending and plan ahead to maximize the benefits offered by the cafeteria plan.