What is a pre-tax benefit?

A pre-tax benefit refers to benefits that are provided to employees before taxes are deducted from their paychecks, effectively reducing the employee's taxable income. This means that these benefits are not subject to income tax at the time they are received, allowing employees to save on their overall tax burden.

Among the options provided, benefits that fall under this definition would include things like health insurance premiums and contributions to retirement accounts, as these amounts can be deducted from an employee's income before taxes are calculated. This leads to tax savings since employees pay taxes only on their income after these contributions are made.

While salary and bonuses are components of compensation, they are generally subject to income tax in full when received, rather than being categorized as pre-tax benefits. Thus, the correct identification of a pre-tax benefit must align with the characteristics of reducing taxable income before taxes are calculated.