Tax Quick Facts 2017: Part 2 of 2

Mar 07 | 2017

Are you an Advisor who needs help understanding how taxes affect group benefits insurance? This document — updated yearly — reflects the current tax information for the year 2017.

Provincial Medical Plans

2016 2017
British Columbia (MSP monthly premiums)
Single $75.00 $75.00
Couple $136.00 $150.00
Family (3 or more) $150.00 $150.00
Manitoba (Health Tax) – Gross Annual Payroll
Gross Annual Payroll – $1,250,000 or less Exempt – no payroll tax Exempt – no payroll tax
$1,250,001 to $2,500,000 (Renumeration – $1.25 million) x 4.3% (Renumeration – $1.25 million) x 4.3%
$2,500,000 or more (from first dollar) Renumeration x 2.15% Renumeration x 2.15%
Ontario (Employer Health Tax – EHT)  See separate table for premiums payable by individuals
Gross Annual Payroll Exemption (includes associated corps. sharing exemption)* $450,000 $450,000
Up to $200,000.00 0.98% 0.98%
$200,000.01 to $400,000.00 1.101% – 1.829% 1.101% – 1.95%
Over $400,000.00 1.95% 1.95%
Quebec (Health Services Fund – HSF)
Gross Annual Payroll $1,000,000 or less 1.45% 1.55%
$5,000,000 or more 4.26% 4.26%
Over $1,000,000 but less than $5,000,000 Between 2.70% and 4.26% Between 2.06% and 4.26%
Newfoundland and Labrador (Health Tax)
Gross Annual Payroll – $1,200,000 or less Exempt – no payroll tax Exempt – no payroll tax
$1,200,001 or more 2% 2%
Alberta, Saskatchewan, New Brunswick, Nova Scotia, Prince Edward Island, Northwest Territories, Nunavut
Government funded N/A N/A

* No exemption for private sector employees, including associated groups, with annual payroll over $5 million

Ontario – Individual Health Premiums

Taxable Income 2005 and later tax years
$0 – $20,000 no premium
$20,001 – $25,000 (taxable income – $20,000) x 6%
$25,001 – $36,000 $300
$36,001 – $38,500 $300 + (taxable income – $36,000) x 6%
$38,501 – $48,000 $450
$48,001 – $48,600 $450 + (taxable income – $48,000) x 25%
$48,601 – $72,000 $600
$72,001 – $72,600 $600 + (taxable income – $72,000) x 25%
$72,601 – $200,000 $750
$200,001 – $200,600 $750 + (taxable income – $200,000) x 25%
$200,601 or more $900

 

Workers’ Compensation – Maximum Assessable Earnings Subject to Premiums

2016 2017
British Columbia $80,600 $81,900
Alberta $98,700 $98,700
Saskatchewan $69,242 $76,086
Manitoba $125,000 $127,000
Ontario $88,000 $88,500
Quebec $71,500 $72,500
New Brunswick $61,800 $62,700
Newfoundland and Labrador $62,540 $63,420
Nova Scotia $58,200 $59,300
Prince Edward Island $52,200 $52,800
Northwest Territories $88,600 $90,600
Nunavut $88,600 $90,600
Yukon $84,837 $85,601

 

Reference sheet – Group Benefit Taxation

Employer Tax Impact on Employee
Group Benefit Is the premium tax-deductible? Employer contributions?* Benefit payments to employee
Group Life Yes taxable Benefit Non-Taxable
Group Dependent Life Yes Taxable Benefit Non-Taxable
Group Wage-Loss Replacement Plans*** (Short Term Disability and Long Term Disability) Yes Non-Taxable Yes / No
Group Accidental Death and Dismemberment Yes Taxable Benefit Non-Taxable
Group Critical Illness Yes Taxable Benefit Non-Taxable
Group Extended Health Benefit Yes Non-Taxable** Non-Taxable
Group Dental Yes Non-Taxable** Non-Taxable
Group Employee Assistance Program (EAP) Yes Non-Taxable Non-Taxable

* 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.

** Taxable benefit in Quebec

*** Yes – 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 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. For further information, please contact your tax advisor.

Want to learn more? View part one in this series.

Part One