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payroll services   /  Imputed Earnings

Imputed earnings are defined by the IRS as the value of any benefit or service that should be considered income for the purposes of calculating taxes.

Excess Insurance Calculation
Employees receive additional group-term life insurance coverage as a part of the employee benefit package. The dollar amount of the group-term life insurance coverage is determined by the employee's assignment category, salary, teacher's retirement contributing salary and age.

According to the Internal Revenue Service (IRS), any group-term life insurance benefit with a value greater than $50,000 is taxable to the employee. The IRS explanation may be found here.

UAB uses the term imputed earnings to identify the group-term life insurance benefit. The value is determined according to the criteria listed above and added to the employee's gross pay. The payment is taxed and the imputed earning value deducted from the gross pay amount.



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