Premiums for some employer-paid benefits must be included in member income as taxable benefits for tax reporting. The total taxable benefit is calculated as the total premiums and related sales tax, less any premiums and sales tax paid by the member. These taxable benefits must be reflected when you issue member income tax slips.
Here is a summary of the tax status of premiums paid by the employer:
Taxable
Employer-paid premiums and related sales tax on group Life, Dependent Life, ASI, AD&D and Critical Illness insurance
Non-Taxable
Employer-paid premiums for Extended Health Care, Dental Care, Health Spending Accounts, EFAP, and Disability* benefits
*If the employer pays any portion of Disability premiums, the benefit claimed will be taxable.
Tip!
- GroupHEALTH must be notified immediately if you make any changes to your cost-sharing arrangement for Disability premiums.
- GroupHEALTH recommends that employers consult an accountant or Canada Revenue Agency (CRA) for further assistance in calculating taxable group benefits.