Under the partially contributory group disability plan, how is the taxable portion of monthly benefits determined?

In a partially contributory group disability plan, the taxable portion of monthly benefits is determined based on the proportion of premium paid by the employer and the employee. This relationship reflects how much of the premium costs are covered by each party, which in turn affects the tax implications of the benefits received.

When an employee contributes to the premium, the benefits they receive may be partially taxable since they have effectively paid for part of the coverage. On the other hand, if the employer covers the entirety of the premium, the benefits are typically fully taxable because the employee did not contribute. Hence, calculating the taxable amount based on the proportion of premium paid provides a clear and direct method for determining tax liability.

This approach ties directly to how premiums are managed in partially contributory plans, where both employer and employee share the costs. By contrasting this with the other options, it is evident that fixed amounts, age, or solely relying on income do not account for the dynamics of premium contributions and their tax treatment accurately.