What is Scooping?
You most likely charge employees a portion of their beneﬁt costs and hopefully are using a Section 125 Plan (one you have ﬁled and one you submit 5500’s for (that is another story). Under the 125 plan, those contributions are deductible by the employee for Federal and State Income tax. Under Section 125 you as the company, would also save money because your F.I.C.A. matching contribution is based on a lower salary.
Scooping is when the PEO charges you a percentage on your employee’s salary, pays the Government the tax on the salary and keeps the rest! Really? Yes. Who would even think to ask that question – and by the way that percentage of the total employee contributions for all your beneﬁt plans really adds up!
That is why you need a professional PEO broker to guide and educate you on what you need to know about each of these PEOs – whether it is their fees, modules, service model, history of renewals, etc. That is one of the reasons some many smart HR and Finance professionals use SBE479.org – ThePEOpeople.com