What’s New

Posté le 6 December 2012 - Dans : What's New

New federal taxable benefits take effect January 1, 2013

New taxable benefits

As part of the 2012 federal budget, the Canadian government announced changes under which the premiums paid by the employer for accidental death and dismemberment insurance and critical illness insurance will become taxable as of  January 1,  2013.

Impact on your employees

The implementation of this measure can result in an increase in taxable benefits appearing on your employee’s T4.

However, we believe that in the vast majority of cases, this will have little or no impact at all on your employees. Indeed, the premiums for accidental death and dismemberment  (commonly called AD&D) or critical illness are generally not very high. In addition, depending on the method of premium sharing between the employer and employees, there could very well be no impact at all for most employee.

Action to be taken

If you already benefit from our payroll deductions and taxable benefits calculation service, you have nothing to do. Towards the end of December, we will be sending you a revised payroll deductions and taxable benefits report of all your employees as of January 1, taking into account the legislative change.

We remind you that the federal government considered until now an employer contribution towards the payment of basic employee life insurance and dependent life insurance as a taxable benefit for the employee. Beginning in 2013, AD&D and critical illness insurance will be added to this list.

By enjoying the MPA Advantage, including preparation of payroll deductions and taxable benefits, included free in all our plans, we ensure you tax compliance on a continuous basis and no action is required. However, you must make sure you apply payroll deductions and taxable benefits as provided.

If you would like to have more detailed information about the impact of this measure on your group or if you require further information on the subject, do not hesitate to contact us.

Link to the CRA website:

Group sickness or accident insurance plans – Employer contributions