Cafeteria Plan
Financial Dictionary — Business & Management
Definition
A cafeteria plan is an employee benefit plan that allows staff to choose from a variety of pre-tax benefits. You can contribute a portion of your gross income before any taxes are calculated and deducted. Plans normally include options such as insurance benefits and benefits that help with various life events . A cafeteria plan is also referred to as a flexible benefits plan or Section 125 plan.
Use cases, Example & Why it matters
Use cases
- Used in planning, organizing, and controlling business operations.
- Used when setting KPIs, policies, procedures, and improving processes.
- Used when setting KPIs, policies, procedures, and improving processes.
Example
- Example: Management applies **Cafeteria Plan** when designing policies and monitoring performance against targets.
Why it matters
- Why it matters: Improves execution, accountability, and decision speed while reducing operational waste.