Yes, the lion’s share of the premium is indeed tax deductible.

The cost of Extended Health Care, Vision and Dental is 100% tax deductible to the employer and he does not have to add it to the employee’s income as a taxable fringe benefit.

This makes it in effect a tax free raise.  Other benefits which are taxable (I am referring to the premium only here), such as life and disability, the employer can pay 100% of the premium on behalf of the employee but he must add it to their income at the end of the year as a taxable fringe benefit.

For example the cost of life insurance is about $5.00 per month per employee.  The employer must T4 the employee $60, (which is $5.00/mo. times 12 months).

Alternatively the employer could charge the employee by way of payroll deduction, the cost for any taxable benefits such as life insurance.  This is very common.

Contact Ron now