Private health services plan premiums

Notice to the reader

The Canada Revenue Agency has taken a new position on what qualifies as a private health services plan (PHSP).

If you make contributions to a private health services plan (such as medical or dental plans) for employees, there is no taxable benefit to the employees.


Employee-paid premiums to a private health services plan are considered qualifying medical expenses and can be claimed by the employee on his or her income tax and benefit return.

Payroll deductions

Do not deduct CPP contributions, EI premiums, or income tax from benefits you provide to employees under private health services plans.

Reporting the benefit

Include the amount that the employee paid on a T4 slip in the "Other information" area under code 85. The use of code 85 is optional. If you do not enter code 85, we may ask the employee to provide supporting documents.

Use the T4A slip to report these amounts for former employees or retired employees. Enter the amount under code 135, "Recipient-paid premiums for private health services plans," in the "Other information" area at the bottom of the T4A slip.

Premiums under a private health services plan are not taxable; do not report this benefit on a T4 slip.

Forms and publications

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