What is Group Income Protection?

Full Definition

Group Income Protection (GIP) is a workplace benefit an employer buys to cover a group of staff, paying a percentage of an employee's salary (often around 50% to 75%) if they are off work long-term through illness or injury. After a deferred period (commonly 13, 26 or 52 weeks), the policy pays out until the employee returns to work, retires, dies, or the policy term ends. The employer usually pays the premiums, which are typically an allowable business expense and not normally treated as a taxable benefit in kind for the employee. However, any income the employee actually receives is paid through payroll and taxed as earnings under PAYE, with Income Tax and National Insurance applied as normal. GIP often bundles in rehabilitation and return-to-work support. It matters because it protects household income during extended sickness without the employee needing individual cover.

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