Pay received from an employer while the employee is sick or injured is part of the employee’s salary or wages. He must also include in income sick pay benefits received from any of the following sources:
A welfare fund
A state sickness or disability fund
An association of employers or employees
An insurance company if the employer paid for the plan
However, if the employee paid the premiums on an accident or health insurance policy, the benefits received under the policy are not taxable. If the employee and his employer shared in the cost of the premiums, then only the share paid by the employer would be taxed.