Do my employees need to pay tax on the Shield plan premium if I provide them with a Shield plan?

Q: Do my employees need to pay tax on the Shield plan premium if I provide them with a Shield plan?

You can pay the premium of the Shield plan in 2 ways: Pay the insurance company directly on behalf of your employees. Employees will be taxed. As the beneficiary of the Shield plan is the employee and this constitutes a benefit-in-kind provided by the employer, the employee will be taxed on the full amount of premium paid by the employer. Reimburse the amount of premium into your employees’ MediSave accounts. Employees are not taxed, subject to a limit of $2,730 per employee per year.

Question

Accepted Answer

You can pay the premium of the Shield plan in 2 ways:

Pay the insurance company directly on behalf of your employees.
Employees will be taxed. As the beneficiary of the Shield plan is the employee and this constitutes a benefit-in-kind provided by the employer, the employee will be taxed on the full amount of premium paid by the employer.
Reimburse the amount of premium into your employees’ MediSave accounts.
Employees are not taxed, subject to a limit of $2,730 per employee per year.

Do my employees need to pay tax on the Shield plan premium if I provide them with a Shield plan?

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