Cafeteria Plan

AAA

DEFINITION of 'Cafeteria Plan'

An employee benefit plan that allows staff to choose from a variety of benefits to formulate a plan that best suits their needs. Cafeteria plan options may include health and accident insurance, cash benefits, tax advantages and/or retirement plan contributions.

Also known as "cafeteria employee benefit plan" or "flexible benefit plan".

INVESTOPEDIA EXPLAINS 'Cafeteria Plan'

Similar to a cafeteria where individuals select their food of choice, employees may choose benefits of their choice. These plans become more useful as diversity within workforces continues to grow. For example, the benefit needs of young families may differ greatly from those of a single person.

RELATED TERMS
  1. IRS Publication 15-B - Employer's ...

    A document published by the Internal Revenue Service that provides ...
  2. Qualified Retirement Plan

    A plan that meets requirements of the Internal Revenue Code and ...
  3. Defined-Benefit Plan

    An employer-sponsored retirement plan where employee benefits ...
  4. Leveraged Employee Stock Ownership ...

    An equity compensation system in which the sponsoring company ...
  5. Accident And Health Benefits

    Fringe benefits provided to employees for sickness, accidental ...
  6. Target-Benefit Plan

    A benefit plan that is similar to a defined benefit plan since ...
Related Articles
  1. Job Hunting: Higher Pay Vs. Better Benefits
    Retirement

    Job Hunting: Higher Pay Vs. Better Benefits

  2. Healthcare FSAs Increase Your Personal ...
    Retirement

    Healthcare FSAs Increase Your Personal ...

  3. 401(k) Plans For The Small Business ...
    Entrepreneurship

    401(k) Plans For The Small Business ...

  4. Plans The Small-Business Owner Can Establish
    Entrepreneurship

    Plans The Small-Business Owner Can Establish

comments powered by Disqus
Hot Definitions
  1. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  2. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  3. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  4. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  5. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  6. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
Trading Center