We are licensed insurance brokers, not CPAs or attorneys. Calculator results are educational estimates, not quotes, approvals or tax advice. Confirm tax and legal points with your own CPA or attorney.
Group term life imputed income calculator
Uses the IRS uniform premium rates (Table I in the regulations, Table 2-2 in Publication 15-B). An educational estimate that runs in your browser; nothing is sent to us.
| Coverage above the $50,000 exclusion (to the nearest $100) | |
| IRS rate (per $1,000 per month) | |
| Before employee contributions | |
| Employee Social Security and Medicare at 7.65% (rough estimate) |
Goes in W-2 boxes 1, 3 and 5 and in box 12 with code C. Federal income tax withholding on it is optional for the employer.
Not for S corporation owners above 2%. The $50,000 exclusion does not apply to them, and IRS Publication 15-B says the cost of all of their group-term coverage goes in W-2 boxes 1, 3 and 5. It does not spell out a calculation method, so ask your payroll provider how they value it. The tool assumes the same coverage for each of the whole months entered; changes during the year need a separate calculation. The 7.65% figure ignores the Social Security wage base and the Additional Medicare Tax, and the tool does not cover discriminatory plans or retirees.
What this number means: The taxable value of employer-paid group term coverage above $50,000, using the IRS Table I rates in Publication 15-B.
What it does not mean: A premium, a quote or payroll advice. Your payroll provider makes the final W-2 entries.
Your numbers stay on this page. If you want Erik to see them, add them to the notes in your request.
Enter the employee's age on December 31, their employer-provided group term coverage, months covered and any after-tax contributions. The calculator applies the IRS uniform premium rate for that age to coverage above $50,000 and shows the year's imputed income for W-2 box 12, code C, plus a rough estimate of the employee's Social Security and Medicare tax on it. It covers ordinary employees only, not more-than-2% S corporation owners.
Want the rules behind the math? Read how imputed income on group term life works →
On this page
The formula
(Coverage minus $50,000, figured to the nearest $100) divided by 1,000, times the IRS rate for the employee's age at year-end, times months covered, minus the employee's after-tax contributions for that coverage. The rates come from Treasury Regulation 1.79-3 (Table I), which IRS Publication 15-B reprints as Table 2-2.
The full rules, the rate chart and special cases (discriminatory plans, dependent coverage, former employees, groups under 10) are in imputed income on group term life.
For payroll
- Include the amount in W-2 boxes 1, 3 and 5, and in box 12 with code C.
- Withhold Social Security and Medicare; federal income tax withholding is optional.
- More-than-2% S corporation owners are handled differently (no exclusion, cost of all coverage in boxes 1, 3 and 5); your payroll provider should value it.
- Many payroll systems calculate this automatically once coverage amounts are entered; this calculator is a quick check, not a payroll system.
Frequently asked questions
Which age do I use?
The employee's attained age on the last day of the tax year (December 31 for calendar-year taxpayers), per the Section 79 regulations.
Why is there no S corporation owner setting?
More-than-2% S corporation shareholders do not get the $50,000 exclusion, and IRS Publication 15-B says the cost of all of their group-term coverage goes in W-2 boxes 1, 3 and 5, but it does not spell out the calculation. Rather than guess, the calculator leaves that case to your payroll provider.
Start your life insurance request
Tell us what the coverage is for and who it would cover. For most requests we ask for each person's date of birth and sex so Erik can prepare for the call. We do not ask health or tobacco questions in this initial request. This is a request for help, not an insurance application or a promise of coverage.
Written by Erik Moran
Erik co-owns Moran Insurance Group with Amanda Moran and handles the agency's life insurance cases, from key person and buy-sell coverage to trust-owned policies. He works alongside clients' CPAs and attorneys, who make the tax and legal calls. More about Erik.
Sources
Moran Insurance Group is a licensed insurance agency. Our brokers are not CPAs, attorneys or tax advisors, and nothing on this page is tax, legal or investment advice. Tax figures and rules reflect our understanding as of October 2026 and can change. Coverage is subject to carrier underwriting and state availability. Confirm anything tax or legal with a licensed CPA or attorney before you act on it.