Key points
- Plans usually combine health and dental, group life, disability and sometimes critical illness or an employee assistance program.
- Employer contributions to a private health services plan (health, dental) are not a taxable benefit.
- Employer-paid group term life and critical illness premiums are taxable benefits, reported on the T4.
- Who pays the disability premium decides whether a future benefit is taxable.
- A qualifying short-term disability plan can lower the employer's EI premiums.
The parts of a group plan, and their tax
| Part of the plan | Employer-paid premiums, for the employee |
|---|---|
| Health and dental (a private health services plan) | Not a taxable benefit |
| Group term life | A taxable benefit, on the T4 |
| Critical illness, accidental death and dismemberment | A taxable benefit |
| Disability paid periodically (wage-loss replacement) | Not taxable when paid; the benefits are taxable when received |
| Disability under an employee-pay-all plan | Premiums the employer pays for the employee are a taxable benefit; benefits are then generally not taxable |
Our group benefits guide covers each part, the T4 codes and the common questions in more depth.
Who usually considers a plan
- Employers hiring in a tight market, where benefits help attract and keep people.
- Owner-managers who want health and dental cover for themselves and their family through the company, alongside staff.
- Growing teams that have outgrown reimbursing costs one by one.
Insurers set rules on who can join, such as minimum hours and a waiting period for new staff, and plans for very small groups often need health questions. A licensed agent explains the options, including health spending accounts.
The EI premium reduction
Employers whose short-term disability plan meets Employment and Social Development Canada's standards can pay a lower EI premium rate. Employees must get their share of the savings, five-twelfths, as a cash payment or a new benefit. It is worth asking about once a plan is in place.
Where Finvo fits
We set up the taxable benefits on payroll, report them on T4s with the right codes, record the employer's premiums, and work out the employees' share of any EI premium reduction. See payroll.
Finvo itself does not sell insurance or give insurance advice. Finvo can connect you with a licensed insurance agent from our partner network who can help with insurance advice if you need it. The licensed agent advises on products and coverage; Finvo covers the tax side. Insurance and other specialists are joining Finvo as contractors, so a group of consultants can work on your file together and you don't have to go from place to place.
Whoever you deal with, you can check that an agent is licensed: in British Columbia with the Insurance Council of BC licensee directory, and in Alberta with the Alberta Insurance Council agent lookup.
This page is general information, checked against the sources below on 5 Nov 2026. Every policy and plan has its own terms; it isn't insurance, tax, investment or legal advice for your situation.