Final answer:
In a group disability plan issued on a contributory basis, the taxable amount depends on the employee's contributions towards the premium.
Step-by-step explanation:
In a group disability plan issued on a contributory basis, the employer and employee both contribute towards the premium. In this case, the employer pays 80% of the premium.
When an employee is eligible to receive a weekly benefit of $1,000, the taxable amount depends on who paid for the premium. Since the employer paid 80% of the premium, the employee is responsible for the remaining 20%.
In this situation, the employee would be taxed on the portion of the benefit that was paid using their own contributions. If the employee's own contributions covered the full 20% of the premium, then the entire $1,000 benefit would be taxable. However, if the employee did not contribute enough to cover the full 20% of the premium, then the taxable amount would be reduced proportionally.
Therefore, without more information about the employee’s contributions, we cannot determine the exact taxable amount. It could be any amount between $0 and $1,000.