IBEX

Some of your plan is taxable, some of it isn't.

It's probably the number-one question business owners, plan administrators and people in the payroll department ask of their group benefit plan provider:

Are group benefit plan premiums taxable?

Yes. And no. It depends on who's paying for what.

In the broadest of terms, group life insurance and dependent life insurance should be paid for by the employee because it's a taxable benefit. Short- and long-term disability can be set up as taxable or non-taxable and health and dental benefits can be paid for by the employer without being considered a taxable benefit.

If you have recently begun providing a group benefit plan for your employees, congratulations; you're on your way to improving employee morale and making your company more attractive to job seekers in a competitive labour market that shows no signs of slowing down. Understanding the issue of the taxability of benefits is a great way to make sure there are no surprises on your employees' T4s next year.

Visit our website for a more detailed explanation of the tax status of your group insurance plan and a detailed example of how to calculate your employees' benefits so they don't end up paying for it at tax time next year.