Disability Insurance Plans and Automobile Benefits
Disability Insurance Plans and Automobile Benefits
Employer-Provided Disability Insurance Plans
| Group Plans | Non-Group Plans | |
| Premiums Paid by Employer | Premiums: non-taxableBenefits: taxable | Premiums: taxableBenefits: not taxable |
| Premiums paid by Employee | Premiums: not-deductibleBenefits: not taxable | Premiums: not-deductibleBenefits: not taxable |
| Premiums paid partially by employer and employee | Premiums: not-taxable/deductibleBenefits=total benefit-premiums paid by the employee |
Automobile Benefits – Employer-Provided Cars
Both the Standby Charge and the Operating Cost Benefit apply whenever an employer provides the employee with a vehicle.
1. Standby Charge
Employee-owned car, standby charge = A/B x 2% x (Cost + HST) x # of months of access to the car’s keys
- The cost must be at least equal to the fair market value of the automobile when you acquired it
- The cost also includes future additions added to the car after purchasing it
Employer-leased car, standby charge = A/B x 2/3 x (total lease payments for the year + HST – insurance)
What is A/B?
If an employee uses > 50% for employment (i.e., primarily in connection with employment):
A/B = Personal KM/1667 x months vehicle available
If an employee uses ≤ 50% for employment purposes (i.e., not primarily in connection with employment):
A/B = 1
Any payments paid by the employee to the employer in connection with the use of the employer’s vehicle is deducted from the standby charge.
2. Operating Cost Benefit (OC)
| No Standby Charge | SC and >50% employment use | SC and <50% employment use |
| OC = total expenses x personal km/total km | Lower of: (i) OC=50% x SC, or (ii) OC=0.261 x personal KM driven | OC = 0.261 x personal KM |
1 prescribed amount for 2018