Page 164 - Essentials of Payroll: Management and Accounting
P. 164
CHAPTER 6
Benefits
After reading this chapter you will be able to
• Know what proportion of medical payments to highly
compensated employees should be considered taxable
income to them
• Know the terms under which COBRA insurance must
be offered to terminated employees
• Learn how the payment of disability insurance by a
company or through employee pretax income will impact
the taxability of any benefits received from the insurance
• Learn how to potentially reduce the cost of workers’
compensation insurance
hough it may appear that the extension of benefits to employees is
more a paperwork-laden human resources function than a payroll
Tfunction, there are a number of payroll issues involving the amount
and limitation of related payroll deductions, the taxability of benefits
received, and the reporting of those benefits to the IRS. This chapter
addresses these issues,and more,in respect to cafeteria plans,various types
of medical insurance,leaves of absence,life insurance,pension plans,sick
and disability pay, stock options, and workers’ compensation insurance.
137
