Direct Taxation of Employee Benefit Costs

Federal Goods and Services Tax (GST) / Harmonized Sales Tax (HST) (Updated July 2010)

The federal government charges 5% GST or HST on the administration charges for benefits based on the location of the employer.

Rate
Jurisdiction Tax
15% Nova Scotia HST
13% Ontario, New Brunswick, Newfoundland and Labrador HST
12% British Columbia HST
13.925% (2011)
14.975% (2012) Quebec 5% GST +
8.5% QST
5% all other jurisdictions GST

Rate	Jurisdiction	Tax
15%	Nova Scotia	HST
13%	Ontario, New Brunswick, Newfoundland and Labrador	HST
12%	British Columbia	HST
13.925% (2011) 14.975% (2012)	Quebec	5% GST + 8.5% QST
5%	all other jurisdictions	GST

Provincial Premium Tax (PPT) (Updated April 2011)

Tax Rates

Tax Rate	Jurisdiction	Applicable if Uninsured
4%	Newfoundland & Nova Scotia	No
3.5%	Prince Edward Island	No
3%	Saskatchewan and North West Territories	No
2.55%	Quebec	Yes
2%	Ontario	Yes
2%	all other jurisdictions	No

Tax Base

Cost of insured benefits for all jurisdictions (premiums, fees and taxes that form part of the premium).
Cost of uninsured arrangements such as Administrative Services Only (ASO) in Ontario and Quebec.

Provincial Retail Sales Tax (RST)

Ontario charges 8% Retail Sales Tax on group life and health benefits, including Provincial Premium Tax (PPT) if the PPT forms part of the premium billed by an insurer.

Quebec charges 9% Retail Sales Tax on group life and health benefits plus 8.5% Qeubec Sales Tax on administration fees and GST for uninsured benefits.