You may see the word "Taxable" next to some of your benefit options, especially if you have a WSA. Taxable benefits are a great way to use your spending account for a wider range of expenses, but they come with some tax considerations. Here’s how they work:
What Are Taxable Benefits?
Taxable benefits are items or services that don’t qualify for tax-free reimbursement under CRA guidelines. Examples might include gym memberships, fitness equipment, or wellness apps through a Wellness Spending Account (WSA).
How Are They Taxed?
When you claim a taxable benefit, the amount reimbursed is added to your income for the year and either reported on your T4 or income statement or on your payroll. This means you’ll pay income tax on the reimbursed amount when you file your taxes. Talk to your Plan Administrator to see how they specifically choose to report it!
How to Submit Taxable Claims
Submitting a claim for a taxable benefit is just like submitting any other claim. Simply upload your receipt, and we’ll process the reimbursement as usual. The difference is that the reimbursed amount will be marked as taxable for your year-end reporting.
Why Use Taxable Benefits?
Taxable benefits let you use your funds for items that might not otherwise be covered, giving you more flexibility and choice in how you use your plan. While you’ll pay taxes on these reimbursements, it can still be a great way to offset personal costs.
Taxable benefits offer added flexibility, making your spending account even more versatile. If you have questions about what qualifies or how claims are taxed, our team is here to help!