It's that time of year again when T4’s need to be calculated and issued for employees.  Most employers use software programs which will automatically calculate the taxable benefits.  This works well on the assumption that the software has been set up correctly.

Many Insurers also offer a report showing the calculated amount for employees' taxable benefits for Life and AD&D, and Critical Illness Insurance; these calculations are based on the actual premiums paid by the Employer as shown on the Insurer’s records. However, the accuracy of an Insurer's reporting relies on whether or not the Employer/Employee premium split is correctly recorded.  At RPP, we have known of instances where the premium sharing between Employer and Employee was changed at some point, but the Advisor and Insurer were not notified.  In order for the Insurer to produce a reliable report, it is absolutely essential that they receive correct information from an employer.

Below is a chart we use to illustrate which benefits are tax deductible to the Employer and any taxable income implications for the employees.

If you have any questions or need assistance determining your taxable benefits which must be reported on the employees’ T4 slips, you should call your Insurer or group benefits Advisor.