Payroll Taxation of Group Benefits (Canada)

Benefit	Employer			Employee	T4 Box #
Benefit	Employer contributions increases Employee taxable income?	Employer contributions increases pensionable earnings (CPP/QPP)?	Employer contributions increases insurable earnings (EI)?	Employee deductions decreases taxable income / Pre-Tax Deduction?	T4 Box #
Registered Retirement Savings Plan (RRSP) (non-restricted)	N/A ¹	Yes	Yes ²	Yes	14 & Other Information - Code 40
Extended Health Care Plan (EHC)	No (Yes - Quebec)	No	No	No	Other, Code 85 for Employee contributions only
Dental Plan	No (Yes - Quebec)	No	No	No	Other, Code 85 for Employee contributions only
Group Life Insurance	Yes	Yes	No	No	14 & Other Information - Code 40
Short-Term & Long-Term Disability (STD/LTD)	No	Yes	Yes	No
Accidental Death & Dismemberment (AD&D) and Group Critical Illness (CI)	Yes	Yes	No	No	14 & Other Information - Code 40
Private Health Services Plan (PHSP)³ i.e. Health Spending Account (HSA)	No	No	No	No ⁴	Other, Code 85 for Employee contributions only
Provincial Health Plan	Yes	Yes	Yes	No	14 & Other Information - Code 40
Employee Assistance Plan (EAP) - Counseling Services	No	No	No	No
Tax-Free Savings Account (TFSA)	Yes	Yes	Yes ²	Yes	14 & Other Information - Code 40
Registered Pension Plan (RPP)	No	No	No	Yes
Retirement Compensation Arrangement (RCA)	No	No	No	Yes
Deferred Profit-Sharing Plan (DPSP)	No	No	No	N/A
Workers Compensation Benefits (WCB)	No	No	No	N/A

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.

¹A registered retirement savings plan (RRSP) contribution you withhold from the remuneration you pay an employee in a year automatically reduces the remuneration on which you have to deduct tax if you make the contribution on behalf of the employee. This applies to an RRSP contribution you withhold from remuneration on which you have to deduct tax, regardless of the amount of the payment or whether it is paid periodically or in a lump-sum. However, you have to have reasonable grounds to believe that the employee can deduct the contribution for the year.

² Your contributions are considered non-cash benefits and are not insurable if your employees cannot withdraw the amounts from a group RASP (except for withdrawals under the Home Buyers' Plan or Lifelong Learning Plan) before the employees retire or cease to be employed.

Registered retirement savings plans (RRSPs) & Tax-free Savings Account (TFSA) Administration fees that you pay directly for an employee are considered taxable and pensionable. Deduct CPP contributions and income tax. These are considered a non-cash benefit, so they are not insurable. Do not deduct EI premiums.

³ If 100% paid by employer.

⁴ Due to additional conditions, taxable income is not decreased at the source (employer). The employee must claim this on their individual tax for a refund.

Disclaimer: This information is for reference only. To ensure accurate set up, we highly recommend that the information is verified with the applicable federal and state/provincial agencies. TimeTrex makes no claims, guarantees, or promises about the accuracy, current status, or completeness of the information provided. In no event shall TimeTrex be liable for any errors or omissions with respect to any resource information.