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Tax Planning Reminders for Employers and Employees

In this post we provide a synopsis of taxable benefit premiums and COVID-19 considerations for your team.

Taxable benefits reporting on T4s

A friendly reminder that some employer-paid premiums are considered taxable benefits. If employers have paid any of the following premiums, they must be included on the employee’s T4:

  • Basic life insurance

  • Dependent life insurance

  • Accidental Death and Dismemberment (AD&D)

  • Critical Illness

  • Wellness/Lifestyle spending account claims

Please let us know if we can be of any assistance with questions here.

COVID-19 considerations

Employees may have faced changes to their income in 2020 due to the pandemic.

If your employees received Canada Emergency Response Benefit (CERM) payments, income tax was not withheld. CERB payments are taxed as regular income and will be taxed at your employee’s marginal tax rate.

You may wish to remind your team that their employment income had tax deducted at source, but CERB payments did not.

CERB has now transitioned to three new benefits: the Canada Recovery Benefit (CRB), the Canada Recovery Sickness Benefit (CRSB) and the Canada Recovery Caregiving Benefit (CRCB). These new benefits are also taxable, however, CRA is withholding 10% tax at source. Depending on income earned during the year, the 10% tax withheld may not be all that is required.


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