Every dollar employees contribute to a DCFSA reduces your FICA tax bill by 7.65%. Plug in your numbers and see the savings.
DCFSA contributions are deducted pre-tax. You save the full 7.65% employer FICA match on every dollar contributed.
Working parents consistently rank dependent-care benefits near the top of what keeps them at a company. SitterSync removes the paperwork so employees actually use their DCFSA.
Unlike most benefits, DCFSA generates a return. The FICA savings you get back exceed what it costs to administer.
Enter your employee count, participation rate, and contribution amounts to see your FICA tax savings.
| Current | Projected | Delta | |
|---|---|---|---|
| Participating employees | - | - | - |
| Avg. contribution | - | - | - |
| Total contributions | - | - | - |
| Employer FICA savings | - | - | - |
| Avg. employee tax savings | - | - | - |
Employers save 7.65% on every pre-tax dollar employees contribute to a DCFSA. That's the employer share of FICA (6.2% Social Security + 1.45% Medicare) that you no longer owe on those wages.
Here's what that looks like at different company sizes with 40% participation and the full $7,500 contribution:
| Eligible employees | Participants (40%) | Total contributions | Employer FICA savings |
|---|---|---|---|
| 100 | 40 | $300,000 | $22,950 |
| 250 | 100 | $750,000 | $57,375 |
| 500 | 200 | $1,500,000 | $114,750 |
| 1,000 | 400 | $3,000,000 | $229,500 |
| 5,000 | 2,000 | $15,000,000 | $1,147,500 |
Most companies don't start at 40% participation or the full $7,500 cap. The real opportunity is the gap between where you are now and where you could be. A company with 500 employees at 15% participation and $3,000 average contribution is saving $17,213 per year. Moving to 40% participation at $7,500 brings that to $114,750, an additional $97,538 in annual FICA savings with no increase in benefits cost.
Use the calculator above to model your specific numbers. Savings scale linearly: more participants and higher contributions mean a proportionally bigger reduction in your payroll tax bill.
Low participation is usually a communication problem, not a benefits problem. Six things that actually move the needle.
The annual benefits email gets skimmed and forgotten. Run short, specific sessions during open enrollment that show real dollar amounts: "If you spend $800/month on childcare, DCFSA saves you $2,700 in taxes." Concrete numbers convert. Generic brochures don't.
Many employees know about DCFSA but skip it because tracking receipts, filing reimbursement claims, and collecting sitter SSNs for year-end tax reporting is too annoying. SitterSync handles all of that. Employees pay their existing caregivers, and SitterSync takes care of receipts, tax docs, and compliance.
New parents are obvious candidates, but don't stop there. Parents of school-age kids still pay for before/after-school care, summer camps, and babysitters. Employees caring for elderly parents qualify too. Segment your communications by life stage instead of blasting one message to everyone.
DCFSA funds don't roll over. Send quarterly check-ins showing employees their balance and what they can still spend on. A simple "You have $2,100 left, here's how to use it before December 31" gets people to actually spend it and re-enroll at higher amounts next year.
For a lot of employees, their manager is who they trust most on benefits questions. Give managers a one-pager they can share in 1:1s, especially with parents coming back from leave. Doesn't need to be HR-led every time.
Show leadership the FICA savings number from the calculator above. Once they see the dollar amount, they'll fund the education and tooling to get there. Every dollar spent on enrollment outreach pays for itself in tax savings.
This is the number one reason participation drops after kids hit age five. It's also wrong. The costs don't go away when daycare ends. They shift.
School-age children still need care outside of school hours and during breaks. All of the following are DCFSA-eligible expenses:
A family paying $200/week for after-school care plus a Friday night babysitter is spending $12,000+ per year, well above the $7,500 DCFSA cap. They should be maxing out their contribution — and saving thousands in taxes, but most aren't because they think DCFSA is "just for daycare."
The fix: stop saying "childcare benefit" in enrollment materials. Say "dependent care benefit" and list specific examples by age group. And give employees SitterSync so they can actually use DCFSA funds on the babysitters they're already paying out of pocket.
Common questions about DCFSA eligible expenses, contribution limits, and employer savings.
Sources: IRS Publication 503 · IRS 2026 Tax Adjustments · SSA Wage Base
SitterSync lets employees pay their existing caregivers with pre-tax DCFSA funds. No chasing receipts, no tax ID headaches, no reimbursement forms. When employees actually spend their DCFSA dollars, your FICA savings go up.
Deeper coverage on the topics that matter most to employers and benefits teams.