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Administrator Guide
Last Updated: 2023-12-15
Example: Calculate Imputed Income from Basic Life Benefits (USA)

Example: Calculate Imputed Income from Basic Life Benefits (USA)

This example demonstrates 1 way to calculate imputed income from employer contributions to basic life insurance.
Workers have employer-provided basic life insurance. The employer pays 0.41 per 1,000 USD for income over 50,000 USD, for which the workers pay tax as imputed income. You create a deduction to calculate employer costs and an earning to calculate employee imputed income.
Configure a pay component group named
Benefits During Leave
 for nonactive workers.
Set up a basic life plan.
Security:
Set Up: Payroll (Calculations - Payroll Specific)
 domain in the Core Payroll functional area.
  1. Access the
    Create Deduction
     task.
  2. Enter these values:
    Option Description
    Name
    Employer Contribution to Basic Life
    Code
    BL-ER
  3. On the
    Effective Dated
     tab, enter these values:
    Option Description
    Effective Date
    Current date
    Run Category Eligibility
    Regular
    Worker Eligibility
    Benefits: Employer Cost Exists (and <> 0)
    Calculation
    Benefits: Employer Cost
    Calculation Proration
    Prorate Using Days Worked
    Recalculate during Retro
    Select the check box.
  4. On the
    Non-Effective Dated
     tab, select these values:
    Option Description
    Groups
    Benefits During Leave
    Employer Paid Benefits [GBR CAN USA]
    Benefits
    Select the basic life benefit plan that you created.
  5. Click
    OK
     and
    Done
    .
  6. Access the
    Create Earning
     task.
  7. Enter these values:
    Option Description
    Name
    Imputed Income from Basic Life
    Code
    BL-IMP
  8. On the
    Effective Dated
     tab, enter these values:
    Option Description
    Effective Date
    Current Date
    Run Category Eligibility
    Regular
    Worker Eligibility
    Row 1:
    • Benefits: Imputed Income for GTL (Employee) Exists
    • Processing Primary Job
    Row 2:
    • Payroll Input Exists for Pay Component
    • Processing Primary Job
    Calculation
    Benefits: Imputed Income for GTL (Employee)
    Workday delivers the IRS monthly cost values in the
    Benefits: Imputed Income IRS Premium Table Rate
     lookup table. Access the
    View Lookup Table (Workday Owned)
     report to review the rate values for the
    Benefits: Imputed Income for GTL (Employee)
     calculation.
    Calculation Proration
    Prorate Using Days Worked
  9. On the
    Non-Effective Dated
     tab, select these values:
    Option Description
    Groups
    Benefits During Leave
    Federal Taxable (Do Not Withhold Taxes) [USA]
    FICA Taxable [USA]
    Local Withholding Taxable (Do Not Withhold Taxes) [USA]
    Local Withholding Taxable Employer (Do Not Withhold Taxes) [USA]
    Non-Cash Taxable Benefits
    State Withholding Taxable (Do Not Withhold Taxes) [USA]
    Benefits
    Select the basic life benefit plan that you created.
  10. Click
    OK
     and
    Done
    .
Workday:
  • Calculates the employer contribution subject to taxes using IRS Premium Table rates.
  • Calculates the workers’ imputed income when the taxable benefits cost is greater than zero and the insurance coverage amount is greater than 50,000 USD.