On a pay statement, the abbreviation “GTL” typically denotes Group Term Life insurance. This represents the value of employer-provided life insurance coverage exceeding $50,000, which is taxable income to the employee. For example, if an employer provides $100,000 in life insurance, the cost of the excess $50,000 coverage is calculated based on IRS tables and included in the employee’s taxable wages.
Employer-provided life insurance is a common benefit, offering financial security to employees’ beneficiaries. However, due to IRS regulations, the cost of coverage above a certain threshold is considered a taxable fringe benefit. This tax liability is often small, but understanding this deduction allows employees to accurately reconcile their pay statements and avoid confusion during tax season. Furthermore, this provision has been in place for decades, reflecting the government’s approach to employer-sponsored benefits and their taxation.
