Originally Posted by
Pineapple Guy
acl, actually the amount that shows on your paycheck is the amount of imputed income. The actual tax on the life insurance benefit is equal to your marginal tax rate times that imputed amount. For example, a typical 32 year old would have $18.87 show up on each paycheck. If he's in the 34% tax bracket (fed and state), that would equate to $6.42/paycheck in actual tax (cost).
Ya know, I knew you would be coming around and putting out the accountant version!
I was trying to give a grade school answer, but you are correct. I bet this now makes more sense to everyone.
That said, as I have stated, anything over 50K in a policy paid for by the (a) company will have "a" charged to you. Nothing different than if you were getting the same policy from another employer somewhere else.
I would definitely trust PG on this stuff.