BASE® Dependent Care Assistance Plan
The BASE® Dependent Care Assistance Plan (DCAP) offers the opportunity for employees to pay for their employment-related dependent care (child or adult) expenses tax free. No matter the dependent care service, this provides some additional financial assistance to allow employees to take care of their family in the way of pre-tax dollars.
Benefit to Employer:
Enhanced Benefits Package.
Employers sponsor DCAP as a means of making dependent care more affordable by allowing employees an opportunity to set aside a portion of their pre-tax wages to pay for qualified dependent care expenses. The addition of this benefit can help with recruitment and retention of employees.
Even though this is considered an employer provided plan, the employee elects to make a pre-tax contribution for dependent care expenses that reduces the employer’s share of payroll taxes.
Benefit to Employee:
Peace of Mind.
Employees can continue to work, and still have peace of mind that they have established funds to help pay for the cost of dependent care expenses.
Increased Take-Home Pay.
Since these funds are transferred from the employee’s wages on a pre-tax basis, employees save federal, state, Social Security, and Medicare taxes. By setting aside these dollars pre-tax, employees are able to increase their take-home pay.