A taxable benefit is a benefit that employers granted to their employees and that is subject to income tax. For example, employer and employee contributions paid into the construction industry insurance plan enable employees to receive insurance coverage. According to the different tax laws, the value of this taxable benefit resulting from employer contributions must be added to the salary when income tax to be deducted from the employee’s pay is calculated.
For the purpose of provincial income tax, life insurance contributions and health insurance contributions constitute taxable benefits. Revenu Québec (MRQ) requires that all employers take account of this taxable benefit when they calculate their deductions at source each time they pay salaries. The contribution amount varies by trade and by sector.
At tax time, the CCQ issues a Relevé 22 to employees, so that they can adjust the amount of the taxable benefit from which they actually benefited during the preceding year – that is, whether the deductions at source were too high or too low.
For the purpose of federal income tax, the Canada Revenue Agency (CRA) counts only the life insurance contribution as a taxable benefit. In addition, the CRA does not require employers to take account of the taxable benefit of life insurance contributions when they calculate their deductions at source.
At tax time, the CCQ issues all employees concerned a T4A tax statement indicating the value of this taxable benefit. If an employer also includes this taxable benefit on the T4 tax statement that it issues to its employees, these employees will be taxed twice on the same benefit.
Consulting the different rates
The different rates for taxable benefits are updated twice a year and may be consulted by selecting the specific sector and trade under the “Wages” heading, or by consulting the available PDF tables :
- Rates for taxable benefits in effect from June 26, 2022 to December 31, 2022.
- Rates for taxable benefits in effect from December 26, 2021 to June 25, 2022.
- Rates for taxable benefits in effect from June 27 to December 25, 2021.
- Rates for taxable benefits in effect from December 27, 2020 to June 26, 2021.
- Rates for taxable benefits in effect from June 28 to December 26, 2020.
- Rates for taxable benefits in effect from December 29, 2019 to June 27, 2020.
- Rates for taxable benefits in effect from June 30 to December 28, 2019.