AD&D and CI Taxable Premiums
Crucial information you should be sharing with your employees
On March 29, 2012 the Federal Government announced that employer-paid premiums for Accidental Death & Dismemberment (AD&D) and Critical Illness (CI) will become taxable benefits.
Currently, the premiums paid by employers for AD&D and CI are non-taxable benefits to the employee. However, as of January 2013, premiums paid by the employer will be taxable to the employee.
What does this mean for your employees?
- Effective January 1, 2013, if AD&D and CI premiums ARE paid by employers, the premium must be added to the employee’s pay as income on each paycheque.
- Payroll systems will need to be revised to accommodate this change in tax legislation.
- Since each employer has their own employee/employer cost sharing formula, employers will need to review the formula and ensure it complies. Please contact us if you have any questions.
Private Extended Health (including prescription drugs) and Dental plans will remain a non-taxable benefit for income tax purposes for all Provinces (except Quebec). This means that employees do not pay tax on the employer-paid premiums as per their payroll deductions.
Please contact your Silverberg Account Manager if you have any further questions regarding the new AD&D and CI taxable benefits.
Silverberg Group specializes in employee benefits consulting for companies of all sizes, and is Alberta owned & operated. From employee benefits programs to executive packages, we translate industry information into innovative options and solutions that best suit your organizational goals. Since 1996, over 800 clients have put their confidence in our industry expertise and our exceptional service. Let us become part of your company’s human resources team.