Example
An employer pays an injured worker $500 a week. That employer receives workers compensation reimbursement from their insurer of $475 a week. The $475 does not attract payroll tax but the $25 make-up pay is taxable.
Further references
See Revenue Rulings GEN-001, PTA-015 Workers compensation payments.
Assistance
If you need further information on this topic, please contact our payroll tax enquiry service on 13 21 61.