Define: Flexible Spending Account

UK Accounting Glossary

Definition: Flexible Spending Account



Advertisement



Full Definition of Flexible Spending Account


A flexible spending account is a monetary employee benefit that may be offered by an employer for a specific purpose. Flexible spending account dollars are in essence a portion of pre-tax employee compensation that can be set aside for eligible use. In order to qualify for a tax-free flexible spending account, an employee must meet certain qualifications, such as uncovered medical care or child care expenses, as well as expenses associated with eldercare. The terms of a flexible spending account, including a withheld dollar amount, must be predetermined. A flexible spending account bears many similarities to health savings accounts (HSAs). Though unlike an HSA, a flexible spending account is somewhat more limited. Another practical disadvantage of a flexible spending account is that the term of a flexible spending account is limited to one year, and any unused money is thus squandered at the end of the term. A flexible spending account is a good option for those who have fixed medical expenses and lack health coverage.


Advertisement




Cite Term


To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
https://payrollheaven.com/define/flexible-spending-account/
Modern Language Association (MLA):
Flexible Spending Account. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. March 30, 2020 https://payrollheaven.com/define/flexible-spending-account/.
Chicago Manual of Style (CMS):
Flexible Spending Account. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/flexible-spending-account/ (accessed: March 30, 2020).
American Psychological Association (APA):
Flexible Spending Account. PayrollHeaven.com. Retrieved March 30, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/flexible-spending-account/

Definition Sources


Definitions for Flexible Spending Account are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 9th February 2020.