Pretax refers to your wages before removing any income taxes are deducted. This is also known as your gross pay.
When you spend money on pretax expenses, Alice ensures you're using pretax dollars to cover those expenses. When you pay fewer taxes on your paycheck, you get to keep more of your hard-earned money.
Think of it like a refund on your paycheck that you can’t get at tax time! That's right, there's nowhere on your annual income taxes to claim expenses related to your commute to and from work for mass transit and parking. Alice and your employer help you save!
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