Providing good health benefits to employees is important in business today. Good health benefits are one of the reasons people stay at a job and also a reason candidates will take a job. If you’re not providing good benefits to your employees, your business will suffer because you’ll struggle to recruit or retain top talent.
Providing good health benefits, however, can be really expensive. Premiums are costly to pay each year, and the costs keep rising. This is why many small business owners are turning to health spending accounts. They’re less costly and they provide tax free benefits for employees in Canada.
What Is a Health Spending Account?
Think of a health spending account like providing your employees with an allowance. At the beginning of each year, you put the amount of benefits money you want to give to employees into their health spending accounts. There are no costly premiums to pay; all you have to do is place the money in their accounts. From there, your employees can spend that money on any CRA-approved healthcare expenses they need.
A health spending account gives your employees complete control over what they spend their money on. Unlike with traditional benefits that have healthcare categories and a specific amount of money you can spend per category (such as $200 per year on vision care), your employees can spend however much money they want on any CRA-approved healthcare expense. If they need to spend $800 on physiotherapy one year, and nothing on it the next, they can do that with no problem.
Tax Free Benefits For Employees in Canada
Another benefit of a health spending account is that all of the benefits your employees receive are tax free. This isn’t a grey area in the law or a loophole, this is a fact. Any expenses your employees pay for with their health spending accounts are tax free. By switching your small business to a health spending account, you can save your employees hundreds of dollars by not having to pay taxes on their medical costs.
Tax Deduction for Employers
There are also benefits to you, the employer, when you provide your employees with a health spending account. A health spending account isn’t insurance, but an account, which allows small businesses to claim it as a legitimate business expense. Because of this, employees receive their benefits tax free, and you receive a tax deduction come tax time each year.
Not only do you not have to pay costly premiums each year, you also get money back from your taxes. A health spending account saves you money and provides your employees with better health benefits than you would be able to provide with a traditional benefits program.
Finding tax free benefits for employees in Canada isn’t hard—all you have to do is register your company for a health spending account. There are no costly premiums. All you have to pay is a one-time fee for setting up the account, and then whatever money you’re going to give to each employee, plus a small administrative fee per claim. Your employees will gain better control over their health, and you’ll gain control of your money. Stop struggling to offer your employees great benefits; offer them easily with a health spending account.