2017-03-01 00:00:00 Running a Business English Do you pay premiums for private health services plans for your employees? Remember to deduct that expense on your tax return. https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/06/Accountant-Deducts-PHSP-Premiums-For-Her-Companys-Employees.jpg https://quickbooks.intuit.com/ca/resources/business/deduct-private-health-services-plan/ Deduct Private Health Services Plan (PHSP) Premiums

Deduct Private Health Services Plan (PHSP) Premiums

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If you pay private health services plan premiums on behalf of your employees, you can claim a business deduction for that amount. For example, if you pay $10,000 in PHSP premiums over a fiscal year, you can report that entire amount as a business expense. However, you don’t have to report that value as income to your employees. You also don’t have to withhold Canada Pension Plan contributions, Employment Insurance premiums, and income tax from the value of this benefit. In contrast, you must deduct CPP and EI from many other benefits, such as allowances for cars. If your employees pay part of their PHSP premiums, you must include their payments on their T4 slips. For example, if an employee pays $500 in PHSP premiums over a year, you note that amount in the “other information” section of the T4 slip along with code 85. This allows your employees to claim this amount as a medical expense on their personal income tax returns. In addition to PHSP premiums, you may also deduct expenses related to other types of insurance premiums. This includes life and disability policies you buy on behalf of your employees, but it also includes insurance for company cars, liability coverage, and other types of business insurance.

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Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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