FICA Reduction · Section 125 · Oregon Employers
Reduce Your FICA Taxes in
Oregon — And Your State Tax Too
Oregon's top income tax rate is 9.9% — one of the highest in the nation. A Section 125 plan reduces both your federal FICA taxes and Oregon state taxable income, giving Oregon employers a rare double-savings advantage. No cost to implement. IRS-compliant. Up and running in one week.
How Section 125 Works for Oregon Employers
Oregon's high minimum wage and top-tier income tax create an unusually powerful Section 125 opportunity for local businesses.
How Section 125 Works in Oregon
A Section 125 Cafeteria Plan lets employees pay for qualified benefits with pre-tax dollars. This lowers their W-2 wages, which means you pay FICA (Social Security + Medicare) on a smaller payroll — saving an average of $620 per employee each year. In Oregon, this also reduces state taxable wages, delivering a genuine double savings on every paycheck.
Which Oregon Industries Benefit Most
Oregon's thriving restaurant and hospitality scene, growing healthcare sector, construction boom, and large retail workforce are all prime candidates. Any Oregon employer with 5+ hourly W-2 employees paying $15–$60/hour qualifies for analysis. Oregon's high minimum wage ($15.45–$17+ depending on location) means more pre-tax savings per worker compared to lower-wage states.
Oregon Tax Landscape
Oregon has one of the highest state income tax rates in the US — up to 9.9%. Because Section 125 reduces the taxable wage base, both the employer's FICA contribution and Oregon state taxable income go down. For businesses with large hourly workforces, this creates substantial total savings that are simply unavailable in no-income-tax states.
Oregon Industries That Qualify
Does Your Oregon Business Qualify?
Calculate Your Oregon FICA Savings
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