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 Tax Savings Benefits Calculator for Employees

Health Benefits Tax Savings Calculator for Employees

(The Alabama Department of Public Health will not capture, record, or use for its own purposes the data elements entered by you into this calculator.)

If your company offers a health insurance benefit to its employees, you should participate, especially if you are not currently enrolled in any other health insurance plan. If you do choose to enroll in your employer-sponsored health plan, you will benefit from TAX SAVINGS.

Use the calculator below to estimate TAX SAVINGS benefits of participating in your employer's health insurance plan. You will only need to know the following:

1.W-4 Form filing status (This means "single, married, or head of household. If you do not know, ask your human resources manager. You completed a W-4 Form for your employer when you started your job.)
2.The number of withholding allowances you included on your W-4 Form. Withholdings represent the number of people you claim as dependents.
3. Your annual gross salary. (This is your salary before taxes and other deductions are taken out.)
4. Estimated yearly annual health insurance premium. (This is the portion of the health care plan cost that you contribute. It is deducted from your paycheck. If you do not know, ask your employer.)

This is all the information you need. The calculator will do the rest and estimate your TAX SAVINGS benefits for you.


Step 1. Filing Status [Instructions Instructions]

Head of household 

Step 2. Form W-4: Witholding Allowances [Instructions Instructions]

  Enter the number of dependents that you claim.
Step 3. Estimate Yearly Net Salary [Instructions Instructions]Estimated Salary
 With Pre-Tax*
Health Insurance
Without Pre-Tax*
Health Insurance
A. Yearly Gross Salary
B. Minus Annual Health Insurance Premium
C. Adjusted Yearly Gross Salary
D. Minus Federal Tax
E. Minus State Tax
F. Minus FICA Tax (6.2% of Gross)
G. Minus Medicare Tax (1.45% of Gross)
H. Yearly Net Salary
Step 4. Estimate Net Salary Based on Employee's Pay Schedule [Instructions Instructions]  
  1. Yearly Net Salary
  1. Pay Periods
52 (if user is paid weekly)  
26 (if user is paid biweekly)  
24 (if user is paid semi-weekly) 
12 (if user is paid monthly)  
  1. Estimated net pay salary per pay period
  1. Estimated tax savings per pay period
Step 5. Discover Your Savings! [Instructions Instructions] 
By participating in your employer's health plan, your annual tax savings is:
(The difference in the taxes withheld between salaries that do and do not include any pre-tax health insurance premiums.)

If you apply this tax savings to your annual health plan premium cost, you reduce this cost to:
Thus, your investment in providing health insurance for you and your family becomes more affordable.

* Pre-tax can include employer-sponsored health plans
or flexible spending accounts.

The information contained here does not constitute tax advice. Amounts shown are estimated tax savings. Actual tax savings may vary depending on individual situations. Estimations are based on income and tax data provided by users and tax laws in effect as of November 2006. The state tax withholding information is based on witholding tax tables published by the Alabama Department of Revenue, February 2006. For more accurate information on your specific situation, please consult a tax advisor.

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