Canadian Employer Taxation Responsibilities: What’s new for the 2023 tax year and more

At Flashlite Benefits we strive to not only provide our clients with excellent service but to keep you educated and informed on all changes in the benefit world. This piece will go over the basics of the new Government of Canada dental coverage and increased EI payments for 2024. 

An update from the Government of Canada

In an effort to reduce dental costs for families across Canada, the government has announced the Canada Dental Benefit. Canadians with less than $90,000 family earnings and no dental insurance or coverage will be eligible to receive financial assistance towards dental services received by children under 18, seniors and those living with a disability. 

What does this mean for employers when completing T4s

For employers that offer dental coverage of any kind (including Health Spending Accounts or Wellness Accounts) there will be a change to how you complete your T4 or T4A statements. 

Effective for the 2023 tax year, it is mandatory for employers to indicate whether the employee was eligible to receive dental insurance or coverage. 

You will notice the following changes to the T4 and T4A forms for 2023: 

• Box 45 (T4): Employer-offered Dental Benefits, was added to the T4. This new box will be mandatory for all slips.

• Box 015 (T4A): Payer-offered Dental Benefits, was added to the T4A. This new box will be mandatory if an amount is reported in Box 016, Pension or Superannuation. The box will otherwise be optional.

To complete the tax slip, employers will select from the 5 code options shown below.

Code 1: No access to any dental care insurance, or coverage of dental services of any kind.

Code 2: Access to any dental care insurance, or coverage of dental services of any kind for only the payee.

Code 3: Access to any dental care insurance, or coverage of dental services of any kind for payee, spouse and dependants.

Code 4: Access to any dental care insurance, or coverage of dental services of any kind for only the payee and their spouse.

Code 5: Access to any dental care insurance, or coverage of dental services of any kind for only the payee and dependants.

For the CRA’s news release regarding employers and pension plan administrators, visit the link here. Additionally, T4 and T4A filers can call the CRA's Electronic Media Processing Unit enquiries line at 1-800-665-5164 for support.

Email our team at Flashlite Benefits at any time to help with your benefits inquiries or see below for resources from the Canadian Government. 

Source: Canada Revenue Agency

T4 Reporting Requirements that haven’t changed but are often overlooked

Life and Living Benefit insurance (Life, Dependent life, Accidental Death and Dismemberment and Critical Illness) are all Taxable Benefits when the employee is not paying the premium for those benefits. These forms of insurance are often overlooked on payroll reporting but they must be accounted for on the annual T4 or T4A.  

If your company is paying some or all of these premiums on behalf of your employees, remember to report the annual amount of the premiums you pay as the employer plus applicable taxes as “other income” in Box 119 on the T4.  For more information see the Government of Canada’s instructions on T4 reporting.

Your Benefits Provider will often have simple monthly or annual reporting that will help you determine the amounts for each employee that was paid on their behalf during the year.

2024 Weekly EI Maximum is changing on January 1st

The federal government announced an increase in the Employment Insurance (EI) maximum insurable earnings amount starting January 1st 2024. If you have a Short Term Disability (STD) Program that is registered with HRDC and qualifies for the EI Premium Reduction Program then your benefit maximum payout must at least match the Federal Government's maximum to continue to qualify.

Effective Jan. 1, 2024:

• The maximum insurable earnings is increasing from $61,500 to $63,200, this means the new EI maximum weekly benefit amount is increasing to $668 per week ($63,200 at 55%, over 52 weeks) rounded to the nearest dollar.

Speak to your Benefits Broker or Provider if you current program’s maximum is lower than the new EI maximum so that you can make adjustments and continue to qualify for the EI Reduction Program.

Consult with your payroll company or accountant to ensure accurate reporting.

Need more information? Email our team at Flashlite Benefits at any time to help with your benefits inquiries and we’ll help get you the information you need.