Q which of the employee benefits has greater value suppose

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Q. Which of the employee benefits has greater value? (Suppose a 28%tax rate.)

a) A non-taxable pension contribution of= $4,300 or use of the company car with taxable value of=$6,325. Non-taxable contribution of= $4,300 has taxable-equivalent of= $5,972.22. Taxable company car has the after-tax equivalent of= $4,554. The non-taxable pension contribution has greater value.

b) A life insurance policy with the taxable value of= $450 or a non-taxable increase in health insurance coverage valued at= $340. Taxable life insurance has the after-tax equivalent of= $324. The non-taxable rise in health insurance has the taxable equivalent of= $472.22. Non-taxable health insurance is the better value.

Reference no: EM13355287

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