In an employer-sponsored contributory group Disability Income plan where the employer pays 60% of the premium, what percentage of the benefits paid is taxed to the employee?

In an employer-sponsored contributory group Disability Income plan where the employer pays a portion of the premium, the taxation of benefits received by the employee is influenced by the premium payment structure.

When an employer pays 60% of the premium in a contributory plan, this means the employee has contributed to the premium payment as well. The section that the employer pays is generally considered a taxable benefit; therefore, whatever percentage the employer contributes to the premium corresponds to the percentage of the benefits that will be subject to taxation if the employee becomes disabled and receives those benefits.

Hence, in this scenario, since the employer covers 60% of the premium, the benefits paid out would effectively be taxed at that same rate, meaning 60% of the Disability Income benefits received by the employee would be taxable. Consequently, the correct answer accurately reflects this taxation proportion.