Certified Payroll Professional Practice Exam

Which type of benefits are taken after tax deductions according to the impact of taxable benefits?

1. Health insurance premiums

2. Relocation benefits

3. Non-taxable benefits

4. Defined contribution plan benefits

The correct answer is: Relocation benefits

Relocation benefits are taken after tax deductions according to the impact of taxable benefits. When an employee receives relocation benefits, such as reimbursement for moving expenses, these are typically considered taxable income and are subject to federal income tax, as well as FICA taxes. This means that the employee would need to pay taxes on these benefits after they have been received. Health insurance premiums, defined contribution plan benefits, and non-taxable benefits would typically not be subject to the same tax treatment as relocation benefits are.