Group Benefit Taxation

September 6, 2023

For our clients that have employees that are subject to personal federal income tax, it is important for both the employer and employees to understand when an employer contribution or a claim payment may be subject to income tax.

A summary of the tax treatment is illustrated below.


Note 1 – If the employer pays for any portion of the Life Insurance benefit the employer paid amount must be reflected as a taxable benefit on the employees T4.

Note 2 – The only way to ensure the Short Term and Long Term Disability benefit claim payments are not subject to income tax is for staff to pay 100% of the cost. For both benefits, the employer is not allowed to reflect any portion they might pay as a taxable benefit on the employees T4.

Should you require any further information, please contact our Customer Service Team at 1-800-667-7830 or