One major difference between tax-exempt benefits and tax-deferred benefits is:

Tax-deferred benefits are not subject to FICA taxes, while tax-exempt benefits are.

Tax-deferred benefits are subject to FICA taxes, while tax-exempt benefits are not.

There is no difference between tax-exempt benefits and tax-deferred benefits as far as withholding amounts is concerned.

There is no limit to amounts that can be contributed to tax-exempt accounts, while there are limits to amounts that can be contributed to tax-deferred accounts.