What Is GTL on a Paystub? Taxable Amount, Paycheck, and W-2

GTL on your paystub stands for Group Term Life insurance. It’s a line your employer uses to report the taxable value of employer-paid life insurance coverage above $50,000. You never receive that value as cash, but federal law treats the cost of the excess coverage as part of your wages, which is why it shows up on your earnings statement and can slightly reduce your take-home pay.¹

What Group Term Life Insurance Is

Group term life insurance is a policy your employer buys from an insurer to cover a group of employees under a single contract. If you die while covered, the policy pays a death benefit to your named beneficiaries. Because your employer pays the premiums, the coverage is a non-cash benefit that adds to your total compensation without landing in your bank account.

Employers commonly offer the coverage as a flat amount, such as $50,000, or as a multiple of your salary, such as one or two times annual pay. Individual employees generally don’t need a medical exam or health questionnaire to enroll.

Why the Line Only Appears Above $50,000

Federal tax law lets you receive up to $50,000 of employer-paid group term life insurance completely tax-free.¹ If your coverage stays at or below that amount, there’s nothing to report, and you won’t see a GTL entry at all.

Once coverage crosses the threshold, the cost of the portion above $50,000 becomes taxable income. If your employer provides $150,000 in coverage, the cost of the $100,000 above the threshold is treated as wages. The IRS doesn’t use the actual premium your employer pays the insurer. It assigns a standardized cost based on your age.

How the Taxable Amount Is Calculated

The IRS publishes a rate table (Table 2-2 in Publication 15-B, also known as the “Uniform Premiums” table) that sets a monthly cost per $1,000 of excess coverage. Your employer looks up the rate for your age on the last day of the tax year and multiplies it by the amount of coverage above $50,000.² The 2026 rates:

Under 25: $0.05 per month
25–29: $0.06
30–34: $0.08
35–39: $0.09
40–44: $0.10
45–49: $0.15
50–54: $0.23
55–59: $0.43
60–64: $0.66
65–69: $1.27
70 and older: $2.06

These rates aren’t what your employer actually pays the insurance company. They’re a flat, government-set schedule used only to calculate the taxable benefit. Because the numbers climb steeply with age, older employees with the same coverage amount see larger GTL figures.

A Worked Example

Suppose your employer provides $200,000 in group term life coverage and you’re 45. The math:²

Subtract the $50,000 exclusion: $200,000 − $50,000 = $150,000 in taxable coverage.
Divide by 1,000: 150 units.
Multiply by the rate for age 45–49: 150 × $0.15 = $22.50 per month.
Multiply by 12: $270.00 per year.

That $270 is your annual imputed income from GTL. Your employer reports it as part of your wages even though you never receive it as cash. If you pay part of the premium yourself with after-tax dollars, that contribution reduces the taxable amount. A $100 annual employee contribution in the example above would drop the figure from $270 to $170.²

How GTL Affects Your Paycheck

GTL typically shows up in two places on your pay statement: once as an addition to earnings, and once as an offsetting deduction. The imputed income is added to your gross wages so payroll taxes apply to the full compensation. An equal deduction then keeps your net pay from being inflated by money you never received.

Your take-home still drops slightly, because Social Security and Medicare (FICA) taxes are withheld on the imputed income.³ For $270 in annual GTL imputed income, the combined FICA cost at 7.65% works out to roughly $20.66 per year. The imputed income is also part of your taxable wages for federal income tax, which can marginally increase what you owe at filing.

You don’t need to do anything when GTL appears. Your employer handles the calculation, the withholding, and the year-end reporting.

How It Shows Up on Your W-2

At year-end, your employer includes the total GTL imputed income in Boxes 1, 3, and 5 of your W-2 — the boxes for federal taxable wages, Social Security wages, and Medicare wages.⁴ The same amount also appears in Box 12 with Code C, which identifies how much of your reported wages came from group term life coverage above $50,000.⁵

If your total wages already exceed the Social Security wage base ($184,500 in 2026), the GTL imputed income won’t generate additional Social Security tax. Medicare tax, which has no wage cap, still applies.⁶

Situations Where the Rules Differ

A few cases don’t follow the standard $50,000-exclusion pattern, so it’s worth knowing they exist.

Spouse or dependent coverage. If your employer also insures your spouse or dependents and the face amount is $2,000 or less, the IRS treats it as a minimal benefit and excludes it entirely. Above $2,000, the full cost of the coverage above $2,000 becomes taxable. The $50,000 employee exclusion does not apply to spouse or dependent policies.⁷

Retired or disabled former employees. If you’ve left your employer and are either retired or disabled, coverage your former employer continues to provide may be entirely exempt from tax, even above $50,000, once both conditions are met.¹ If you retire mid-year, only coverage provided after your retirement date qualifies.⁸

Key employees. If you’re a key employee (generally an officer, top earner, or significant owner) and the plan fails IRS nondiscrimination tests, you lose the $50,000 exclusion for that year and must include the full cost of your coverage in income. Rank-and-file employees keep the exclusion regardless.⁹

1
Office of the Law Revision Counsel. 26 USC 79 – Group-Term Life Insurance Purchased for Employees
2
Internal Revenue Service. Publication 15-B (2026), Employer’s Tax Guide to Fringe Benefits
3
Internal Revenue Service. Group-Term Life Insurance
4
Internal Revenue Service. 2026 General Instructions for Forms W-2 and W-3
5
Internal Revenue Service. Group Term Life Insurance
6
Social Security Administration. Contribution and Benefit Base
7
Internal Revenue Service. Publication 15-B, Employer’s Tax Guide to Fringe Benefits
8
eCFR. 26 CFR 1.79-2 – Exceptions to the Rule of Inclusion
9
eCFR. 26 CFR 1.79-4T – Questions and Answers Relating to Nondiscrimination Requirements for Group-Term Life Insurance