I added my domestic partner to my health insurance earlier this year. I understand that the Fair Market Value of my employer's contribution to the health plan is a taxable benefit to me. I also understand that the bi-weekly contribution I have to make to the insurance plan is a post-tax deduction to me. However, my employer is also deducting the FMV from my net pay. For example:
Gross Pay: $1000
Non-Taxed Deductions: $100
Value of Employer Paid Insurance on DP: $175.00
New Taxable Income: $1075
Taxes: $232
After Tax DP Insurance Premium: $75.00
After Tax Taxable Benefits - $175.00
Net Pay: $593.00
I can't seem to get a straight answer from my HR or payroll department. But something seems off to me and I can't seem to quite understand what's happening.
