Taxable benefit
Employer-paid premium treated as employee income.
Some employer-paid premiums are a taxable benefit to the employee, meaning the premium is added to employment income. Group life and AD&D premiums paid by an employer are normally treated this way in Canada.
The treatment also determines whether a benefit is received tax-free. Where the employee pays LTD premiums with after-tax dollars, the disability benefit is generally received tax-free — a design choice with real consequences at claim time.
What this means for a BC plan
Outside Quebec, employer-paid health and dental premiums are generally not a taxable benefit. Confirm current treatment with your accountant and the Canada Revenue Agency before relying on it.
Related terms
Where this comes up
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