Group benefit taxation

Each benefit, depending on what your employer provides, plus the percentage you pay versus the percentage your employer pays – makes it a taxable or a non-taxable benefit.


Taxable IncomePremium is a tax deductible expense
(Employer)
Employer
contributions?1
Benefit payments to employee
Group LifeyesTaxable BenefitNon-Taxable
Dependent Life
yes
Taxable BenefitNon-Taxable
Wage-Loss Replacement Plans 2 (S.T.D. & L.T.D)
yes
Non
Taxable
Yes/No
A.D& D.
yes
Taxable BenefitNon-Taxable
Group Critical Illness
yes
Taxable BenefitNon-Taxable
Extended Health
Benefits

yes
Non
Taxable
Non-Taxable
Dental
yes
Non
Taxable
Non-Taxable
Employee Assistance
Program (EAP)

yes
Non
Taxable
Non-Taxable

1 Certain Employer paid contributions are subject to GST/HST and/or PST or provincial insurance levies and should be added to the value of the taxable benefit 2 The disability benefit payments are taxable to the employee if any part of the short-term or long-term disability premium is paid by the employer. No, if the entire short-term or long-term premium is paid by the employee. Where the costs of the short-term or long term disability plan are shared between employer and employee, the employee is entitled to receive benefits equal to his/her contributions on a non-taxable basis. To ensure that the non-taxable status of disability benefits are preserved, it is important to maintain accurate payroll records.
3 Taxable benefit in Quebec


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