Adam Y.C. Lei

Aug 2, 2023 | articlegateway.com | Huihua Li |Adam Y.C. Lei

Abstract Unlike the pretax payroll deductions common for insurance premiums, employees paying for parking may have the option to use either pretax or after-tax payroll deduction. The pretax deduction lowers the Social Security earnings, which could reduce the Social Security retirement benefit to an individual. This paper quantifies the adverse effect the pretax deduction may have, using a simplified example of a university faculty member in Texas.