How do employers save on payroll taxes?

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• How is this different from 401(k) contributions regarding payroll taxes?

  Employee contributions to 401(k) plans became subject to FICA taxes (probably in the 1986 Reconciliation Act). However, qualified employer contributions like those in the Radish Plan remain exempt from FICA taxes.

• Are there tax consequences for employees when they withdraw?

  Yes, withdrawals are subject to federal income tax and a 10% early distribution penalty if under age 59¬Ω, unless they qualify for penalty exemptions. However, withdrawals are not subject to FICA taxes and may not be subject to state and local taxes.