Your employer is considering adding a group term life insurance plan to the employee benefit package....

Your employer is considering adding a group term life insurance plan to the employee benefit package. The premium cost would be fully paid by the organization. Explain how this will impact:

the employees' net pay
the employer's payroll costs

Expert Solution

1. Adding a group term life insurance will result in variation of the employee's pay or can stay the same depending on the amount of benefits paid. If the coverage is within the limits of the amounts allowed as deduction by the IRS then the net pay remains same. However if the coverage exceeds the limits set by IRS then the net pay will go down due to tax withholding. However, employees can take a tax credit when filing returns.

2. Employee payroll costs will increase since the company is ultimately the premium is paid by the employer. However, if the employer recovers any cost of the employee the costs reduces by the amount recovered.

ekkarill92 answered 2 years ago

Payroll. Your employer is considering adding a group term life insurance plan to the employee benefit...

Payroll. Your employer is considering adding a group term life insurance plan to the employee benefit package. The premium cost would be fully paid by the organization. Explain how this will impact: 1. the employees' net pay, 2. thew employer's payroll costs

Group Term Life Insurance Many employers limit providing employer-paid Group Term Life Insurance to $50,000. The...

Group Term Life Insurance Many employers limit providing employer-paid Group Term Life Insurance to $50,000. The IRS allows the $50k limit without assessing a tax on the value of this benefit. For a life insurance benefit in excess of $50k, the affected employee will have to include as income and pay income taxes. So some employers avoid the administrative chore of calculating the excess benefit and adding it to the employee’s annual W-2. A consequence to those employers may be...

1) XYZ Corp purchased group term life insurance for all of its employees. The employer pays...

1) XYZ Corp purchased group term life insurance for all of its employees. The employer pays all of the premiums which are equal to two times (2x) the employees’ salary. Scott, age 52, earns $37,500 annual salary. How much must Scott recognize in income? 2) Don and Carol are married and filed a joint return. During the year they received the following : Wages………………………….. $25,000 Social Security Benefits………. 12,000 Tax Exempt interest income…... 10,000 Modified adjusted gross...

An employee who will be 40 years old on April 1 receives group-term life insurance coverage...

An employee who will be 40 years old on April 1 receives group-term life insurance coverage of $75,000. How much taxable income must this employee recognize for January 2017? a.$2.50 b.$2.75 c.$12.75 d.$4.25

As an employer interested in maximizing the potential of your female employees, what benefit package would...

As an employer interested in maximizing the potential of your female employees, what benefit package would you offer and what management tactics would you use? How would these devices also serve as advantages to your male employees.

The City of Shipley maintains an Employee Retirement Fund—a single-employer, defined benefit plan that provides annuity...

The City of Shipley maintains an Employee Retirement Fund—a single-employer, defined benefit plan that provides annuity and disability benefits. The fund is financed by a process that makes actuarial determined contributions from the city’s general fund and by contributions that are made by the employees. The general fund is handling the administration of the retirement fund and it does not have any administrative expenses. The Statement of Net Assets for the Employees’ Retirement Fund as of July 1, 2011 is...

An important part of employee compensation is a benefits package, which might include health insurance, life...

An important part of employee compensation is a benefits package, which might include health insurance, life insurance, child care, vacation days, retirement plan, parental leave, bonuses, etc. Suppose you want to conduct a survey of benefits packages available in private businesses in Hawaii. You want a sample size of 100. Some sampling techniques are described below. Categorize each technique as simple random sample, stratified sample, systematic sample, cluster sample, or convenience sample. Put your answer in the blank. a. Assign...

An employer pays its employees partly in form of tax free non contributory life insurance benefit...

An employer pays its employees partly in form of tax free non contributory life insurance benefit of $10,000 per employee. They employ around 200,000 workers. Calculate the total cost of this benefit to this employer.

You are in the 25% income tax bracket. Your employer offers health insurance as a benefit...

You are in the 25% income tax bracket. Your employer offers health insurance as a benefit valued at $4000 per year. Or your employer is offering you $4000 cash if you do not accept the health benefit. If making a rational economic decision, which option do you take?

A company, United Consumers, is considering the option of replacing its employer provided insurance plan with...

A company, United Consumers, is considering the option of replacing its employer provided insurance plan with what is known as Consumer Directed Health Plan (CDHP). Under this new plan, the company would provide its employees with a sum of money so that the employees can purchase their health plan form the online marketplace. This plan is based on the belief that employees tend to behave more responsibly if they have to spend their own money as consumers. According to a...

Question