Business Tax
ProfitGuard Plus: Lower Your Payroll Taxes, Raise Your Team's Pay
The IRS-backed payroll-tax structure that saves employers about $500-$600 per employee a year - with no cut to anyone's pay
Quick answer
ProfitGuard Plus is a payroll-tax structure for businesses with W-2 employees. It saves the employer about $500 to $600 per employee per year in FICA taxes and gives each employee $40 to $80 more per paycheck - with no change to gross pay. It's built on IRS code sections 125, 106(a), 105, and 213(d), and it adds free preventive care benefits like telehealth and mental health support.
If you own a business with W-2 employees, part of every paycheck you run goes to payroll taxes - the employer side of FICA. Most owners treat that as a fixed cost. It doesn't have to be. ProfitGuard Plus is a payroll-tax and benefits structure that lowers your FICA bill and gives your team more take-home pay at the same time. It's built on four pieces of long-standing IRS code, and nobody's gross pay changes. Here's how it works, why it holds up under IRS rules, and who it fits.
What ProfitGuard Plus actually does
It lowers the payroll taxes you pay as an employer and raises what your team takes home. Same gross pay. Same benefits you already offer. The only thing that changes is your FICA bill - and it drops.
- ·You save about $500 to $600 per employee, per year, in employer FICA - every payroll, going forward
- ·Every participating employee takes home $40 to $80 more per paycheck
- ·It stacks on top of the medical, dental, vision, and retirement benefits you already have
- ·It adds free preventive care: telehealth, mental health, care navigation, and chronic condition support
The four IRS codes that make it work
ProfitGuard Plus isn't a loophole. It's built on four sections of the tax code that have been on the books for years. Each one does a specific job.
- ·Section 125 (Cafeteria Plan): lets an employee move part of their pay into a pre-tax election
- ·Section 106(a) (Employer Health): lets employer health dollars flow pre-tax on top of that
- ·Section 105 with Treasury Reg 1.105-11 (SIMRP): reimburses employees tax-free through a Self-Insured Medical Reimbursement Plan - not through the cafeteria plan
- ·Section 213(d) (Qualified Care): defines the real medical care that gets reimbursed
Why this one holds up when others got shut down
You're right to be skeptical. A lot of 'tax-saving benefit' programs got marketed over the last decade, and about half got shut down by the IRS. The ones that failed made two mistakes: they ran the reimbursement back through the Section 125 cafeteria plan - the IRS calls that double-dipping - and they reimbursed things like step counts and gift cards instead of real medical care. ProfitGuard Plus is built the opposite way. The reimbursement flows through the SIMRP under Treasury Reg 1.105-11, never through the cafeteria plan. The care is real, Section 213(d)-qualified care. And the plan documents are written and reviewed by CPAs and ERISA attorneys before anything goes live. That's the bright line.
Who it fits
There are just two gates. First, your W-2 employees are full-time and earn about $17,000 a year or more - below that, the tax math doesn't compound. Second, each employee has major medical coverage somewhere: their own plan, a spouse's, a parent's, Medicare, or the marketplace. That second gate is the Integrated 105 design, and it's what keeps you clear of the ACA penalty.
What it takes on your end
The lift is light. We coordinate with your payroll provider and handle the plan documents. Your gross compensation doesn't change - only your FICA bill does. The savings then repeat every single payroll, going forward.
Frequently asked questions
What is ProfitGuard Plus?
It's a payroll-tax and benefits structure for businesses with W-2 employees. It lowers the employer's FICA taxes and gives employees more take-home pay, using four sections of IRS code - 125, 106(a), 105, and 213(d). Gross pay doesn't change.
How much can a business save with ProfitGuard Plus?
Employers save about $500 to $600 per employee per year in FICA taxes, and it repeats every payroll. Each participating employee also takes home about $40 to $80 more per paycheck.
Is ProfitGuard Plus legal?
Yes. It's built on long-standing IRS code, not a loophole. The reimbursement flows through a Self-Insured Medical Reimbursement Plan under Treasury Reg 1.105-11 - never through the cafeteria plan - and the care reimbursed is real Section 213(d) medical care. CPAs and ERISA attorneys review the plan documents before anything goes live.
Will my employees' pay go down?
No. Gross pay stays the same. Employees actually take home a bit more each paycheck, and they get free preventive care benefits like telehealth, mental health support, and care navigation on top.
Which businesses qualify for ProfitGuard Plus?
Two things need to be true. Your W-2 employees are full-time and earn about $17,000 a year or more, and each employee has major medical coverage somewhere - their own plan, a spouse's or parent's plan, Medicare, or the marketplace.
Isn't this the kind of program the IRS shuts down?
Some were, and being cautious is smart. The ones that failed ran reimbursements through the cafeteria plan (double-dipping) or paid for things like gym memberships and gift cards instead of real medical care. ProfitGuard Plus avoids both by design, which is what keeps it on the right side of the rules.
The Takeaway
If you run payroll for W-2 employees, ProfitGuard Plus is one of the few moves that lowers your taxes and gives your team a raise at the same time - without costing you more in pay. The savings repeat every payroll, and the structure is built to hold up under IRS rules. This is educational, not tax or legal advice - we'll loop in your CPA on the specifics. The next step is simple: we model your exact numbers so you can see the savings for your business.
See your ProfitGuard Plus savings
Tell us your W-2 headcount and we'll model your exact FICA savings - plus send you the free 4-PDF owner's bundle that breaks down the codes, the red flags, and the questions to ask before you sign.
Educational content only. Not financial, tax, or legal advice. Always consult a licensed professional before acting on the information in this post.