Staying ahead of the rising cost of living is a challenge for everyone, but there are some expenses we simply can't eliminate. Things like prescription drugs, bandaids, day care, transit passes, doctor visit co-pays and insurance deductibles, all have to fit within the household budget. WageWorks programs including Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) are designed to help you save money on those household expenses. WageWorks and your employer enable you to use these programs to pay for essential expenses like child day care, medical payments, and prescription drugs pretax.

It's simple. WageWorks helps you set aside pretax money each month from your paycheck into one or more “tax-advantaged” accounts. You can then spend the money from these accounts for eligible expenses. In the end, you spend less of your household budget on the expenses because you pay for them with money that’s tax free, and you do it with a minimum of hassle.

Here's an example of how it works:

1. If your annual gross or pretax pay is $65,000,
2. Your annual out-of-pocket medical and commuting expenses may total $1,200
3. Your federal, state and Social Security taxes combined are approximately 40%
4. Your take home pay is approximately $39,000
5. What you have left over is $37,800

1. If your annual gross or pretax pay is $65,000
2. Your annual out-of-pocket medical and commuting expenses may total $1,200
3. With WageWorks, you only pay tax on money left over after expenses, which equals $63,800
4. Your tax rate remains the same at 40%
5. But now your take home is higher: $38,280

In this example, your take home pay is $480 higher than without WageWorks.

To see specific savings examples by account type, please visit our Health Care FSA, Dependent Care FSA, HSA, and Commuter pages.