Taxable Benefits - BC reference chart
A quick reference for employers and payroll administrators on how common group benefits and retirement plans are treated for tax purposes in British Columbia
Taxable benefits — BC reference chart
A quick reference for employers and payroll administrators on how common group benefits and retirement plans are treated for tax purposes in British Columbia.
Group benefits and retirement plans
| Benefit2 | Cost tax deductible to employer?Employer Deduction?1 | Employer contributions taxable to employee?Taxable to employee?1 | Employee contributions eligible for tax deduction or credit?Employee Deduction?1 | Benefit taxable when received?Benefit taxable?1 |
|---|---|---|---|---|
| Group Life InsuranceLife | Yes | Yes | No | No |
| Accidental Death & Dismemberment (AD&D)AD&D | Yes | Yes | No | No |
| Critical Illness InsuranceCI | Yes | Yes | No | No |
| Short-Term Disability (STD)STD | Yes | No | No | Yes/No3 |
| Long-Term Disability (LTD)LTD | Yes | No | No | Yes/No3 |
| Extended Health Care PlanEHC | Yes | No | Yes | No |
| Dental PlanDental | Yes | No | Yes | No |
| Health Spending Account (HSA)HSA | Yes | No | N/A | No |
| Employee Assistance Program (EAP)EAP | Yes | No | No | No |
| Wellness Spending AccountWSA | Yes | Yes4 | No | N/A |
| Registered Pension Plan (RPP)RPP | Yes | No | Yes | Yes |
| Group RRSPGroup RRSP | Yes | Yes5 | Yes | Yes |
1 Column headers (abbreviated on mobile):
Employer Deduction? = Cost tax deductible to employer
Taxable to employee? = Employer contributions taxable to employee
Employee Deduction? = Employee contributions eligible for tax deduction or credit
Benefit taxable? = Benefit taxable when received
2 Benefit (abbreviated on mobile):
Life = Group Life Insurance · AD&D = Accidental Death & Dismemberment · CI = Critical Illness Insurance
STD = Short-Term Disability · LTD = Long-Term Disability · EHC = Extended Health Care
HSA = Health Spending Account · EAP = Employee Assistance Program
WSA = Wellness Spending Account · RPP = Registered Pension Plan
3 STD/LTD benefit payout:
Taxable if any portion of the premium was paid by the employer. Not taxable if the premium is entirely employee-paid. Alternatively, employer-paid LTD premiums can be structured as a taxable benefit on the employee's T4 slip, so that disability benefits are received tax-free when needed.
4 Wellness Spending Account:
Generally a taxable benefit. Exception — on-site employer facilities (gym, wellness room) used by all employees are not taxable.
5 Group RRSP:
Employer matching is a taxable benefit but offset by the employee's RRSP deduction. Net tax impact is typically neutral.
Employer Deduction? = Cost tax deductible to employer
Taxable to employee? = Employer contributions taxable to employee
Employee Deduction? = Employee contributions eligible for tax deduction or credit
Benefit taxable? = Benefit taxable when received
2 Benefit (abbreviated on mobile):
Life = Group Life Insurance · AD&D = Accidental Death & Dismemberment · CI = Critical Illness Insurance
STD = Short-Term Disability · LTD = Long-Term Disability · EHC = Extended Health Care
HSA = Health Spending Account · EAP = Employee Assistance Program
WSA = Wellness Spending Account · RPP = Registered Pension Plan
3 STD/LTD benefit payout:
Taxable if any portion of the premium was paid by the employer. Not taxable if the premium is entirely employee-paid. Alternatively, employer-paid LTD premiums can be structured as a taxable benefit on the employee's T4 slip, so that disability benefits are received tax-free when needed.
4 Wellness Spending Account:
Generally a taxable benefit. Exception — on-site employer facilities (gym, wellness room) used by all employees are not taxable.
5 Group RRSP:
Employer matching is a taxable benefit but offset by the employee's RRSP deduction. Net tax impact is typically neutral.
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This chart is provided for general informational purposes only and does not constitute tax, legal, or accounting advice. Tax treatment of benefits depends on specific plan design and individual circumstances. Consult a qualified tax professional or benefits advisor before making decisions based on this information. Last updated: April 2026.