Cafeteria Plan

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At work, your employer will probably provide the staff with some employee benefits. A cafeteria plan is a type of employee benefit plan that offers you a choice of between cash (which is taxable) and at least one other nontaxable benefit. What sort of benefits? It could be life insurance, extra vacation days, or maybe some health insurance benefits that better suit you if you have small children. Note that as in a cafeteria, these choices are not free, but at least your employer is offering you alternatives. Some companies might give you life insurance whether you want it or not, and if given a choice you would maybe rather choose something else.