Is Employer-Provided Disability Insurance Taxable? 
Whether your employer provided disability insurance is taxable depends on who pays the premium , among some other things . If you pay the premiums for your policy with earnings that have already been taxed , your disability benefits should be tax free if/when collected . If your employer pays the policy premium and does not count that as income to you , then the disability benefits would be taxable . Whether you split premiums , use a cafeteria plan , or other factors , taxation has its own rules for each situation . But the above is the most common rule of thumb for employer provided disability insurance taxation . 