What are pre-tax benefits intended to do?

Pre-tax benefits are designed to reduce an employee's taxable income by allowing certain amounts to be deducted from their gross income before taxes are calculated. This means that the employee pays taxes only on the lower, adjusted income rather than their full salary. This arrangement can benefit employees financially, as they may end up in a lower tax bracket or reduce the amount of taxes they owe.

Examples of pre-tax benefits commonly include health insurance premiums, retirement contributions, and flexible spending account contributions. By utilizing pre-tax benefits, employees are able to maximize their take-home pay while enjoying the advantages of these benefits, ultimately leading to increased financial efficiency in managing their expenses.

In contrast, other answers do not align with the purpose of pre-tax benefits. Increasing the employee's gross income would have the opposite effect of what pre-tax benefits aim for. Providing a fixed salary increase does not relate to how pre-tax benefits function, nor do pre-tax benefits have anything to do with eliminating hours worked from calculations. Overall, the primary intent of pre-tax benefits is to provide a financial advantage by reducing taxable income.