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Questions and Answers
Payment for sick leave and vacation leave is not taxable income.
True
Fringe benefits received by an employee is subject to fringe benefit tax.
True
Monetization of 10-day leave credits is neither taxable nor subject to withholding tax.
True
Living quarters and meals provided are generally excluded from the gross taxable income of the employee because of the difficulty in measuring the amount of benefits.
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The premium paid by an employer to cover the life insurance of an employee is not taxable if the beneficiary of the life insurance policy is the company.
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Study Notes
Taxation of Employee Benefits
- Payment for sick leave and vacation leave is not considered taxable income.
- Fringe benefits received by an employee are subject to fringe benefit tax.
- Monetization of 10-day leave credits is exempt from taxation and withholding tax.
Employer-Provided Benefits
- Living quarters and meals provided by the employer are generally excluded from the employee's gross taxable income due to the difficulty in measuring the benefits.
- The premium paid by the employer to cover an employee's life insurance policy is not taxable if the company is the beneficiary of the policy.
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Description
Quiz: Taxation of Employee Benefits and Leave Credits Test your knowledge on the taxation of employee benefits and leave credits with this quiz. Determine whether each statement is true or false, and provide a brief reason for your answer if you believe otherwise. Learn about the taxability of sick leave and vacation leave payments, monetization of leave credits, fringe benefit tax, and the taxation of living quarters and meals provided to employees.
