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Group benefits reporting comes down to one slip and one date. Any taxable part of your plan goes on each employee’s T4 by the filing deadline, which was March 2, 2026 for the 2025 slips. The real work is deciding which pieces are taxable, and that changes from plan to plan.
Which group benefits go on the T4?
The CRA starts from a plain rule: benefits you give employees are taxable under section 6 of the Income Tax Act, unless the Act or a CRA policy says otherwise. So your job is to sort each part of the plan into taxable or not, then report only the taxable ones.
| Plan part | Taxable to the employee? | How it is reported |
|---|---|---|
| Group term life insurance | Yes | Code 40 on the T4, code 119 on the T4A for former staff |
| Private health services plan (medical, dental) | No, if it meets the CRA conditions | Nothing to report |
| Private health plan that fails the conditions | Yes | Code 40 on the T4 |
| Group sickness or accident cover | Yes, unless it is a wage loss replacement plan paying periodic benefits | Code 40 on the T4 when taxable |
| Employer health tax paid in Ontario or BC | No | Nothing to report |
Picture a small shop in Regina with six employees and one group policy that bundles dental and life cover. The dental part usually stays off the slips. The life cover doesn’t, and it has to be split out per person. One invoice, two different treatments.
How do you report a taxable benefit on the T4?
Box 14 holds the employee’s total employment income before deductions, and the taxable benefit is part of that number. Box 40 then shows the benefit on its own, with the code that names it. The two boxes have to agree, so the benefit is counted once in each place.
You issue a T4 when you deducted CPP, EI or income tax, or when you paid more than $500 in the year. Group term life is the exception to that $500 line. The CRA’s T4 slip guidance for employers says that if you give a current employee a taxable group term life benefit, you always issue a T4, even when total pay was $500 or less. For the amount, you add the premiums, the sales and excise taxes and any provincial levy, then take off what the employee paid back.
What does a taxable benefit cost the employee?
It costs them tax at their top rate, and nothing lands in their bank account. Take an Ontario employee earning $75,000. Add a $1,200 taxable benefit and the income tax calculator shows federal and Ontario tax rising from $12,704.65 to $13,046.22, or $341.57 more. That’s a few hundred bucks the employee never saw coming. Tell them early why the T4 shows more than their pay stubs did.
You can see the rate that applies to the next dollar on the marginal tax rate calculator. For a $75,000 salary in Ontario it’s 29.6%. Use the take-home pay calculator if an employee asks what the change does to the year.
What happens if you file late or leave a benefit out?
Late T4 filing has a price. The penalty is at least $100, and it grows by the day. For 1 to 50 slips it’s $10 a day up to $1,000, and for 51 to 500 slips it’s $15 a day up to $1,500. Bigger filers pay more per day, up to $7,500.
The usual slip-up is quieter than that. A plan gets set up, someone assumes it’s tax free, and group life premiums never reach box 40. Once a year, check every policy on your invoice list against the table above. A health plan that fails the CRA’s conditions turns taxable too.
Retirees are easy to forget. Former employees who keep group life cover get it reported under code 119 on a T4A, not on a T4.
Common questions about group benefits slips
Do I report the employer’s share of a health plan? Not when the plan qualifies as a private health services plan. It stays off the slip. If you aren’t sure it qualifies, ask your insurer or accountant before the slips go out, not after.
What if an employee pays part of the premium? Subtract what they paid from the taxable amount for that benefit. Only the employer’s cost is a benefit.
Can I fix a slip after filing? Yes, you file an amended slip. Do it as soon as you spot the gap, because the employee’s return may already be filed.
Where the remittance side comes in
Reporting is half of it. Your payroll deposits move when a benefit is taxable and paid through payroll, so run the numbers with the payroll remittance calculator before you change a plan mid-year.
Quebec treats some health plan amounts differently, and we haven’t covered its rules here. If you have staff there, read the Revenu Québec guidance before you finish your slips. A plan run through a health and welfare trust is also reported under separate CRA rules, so don’t assume the table applies.
Where the numbers come from
The rules and code numbers come from the Canada Revenue Agency’s pages on premiums and contributions to insurance plans, the T4 slip, and the Employers’ Guide on filing the T4 slip and summary. The deadline and penalties are the ones published for the 2025 tax year. The example uses the 2026 tax data behind our calculators. Check the CRA’s payroll pages for the current year before you file, because dates move when the last day falls on a weekend. This site is independent of the CRA and any government.
Frequently asked questions
Do I report every group benefit on the T4?
No. Only the taxable ones. A private health services plan that meets the CRA conditions isn't taxable, so it stays off the slip.
Where does group term life insurance go?
Code 40 in box 40 of the T4 for current employees, and code 119 on a T4A for former employees or retirees.
What is the T4 penalty for filing late?
At least $100. For 1 to 50 slips it's $10 a day up to $1,000, and it rises with the number of slips.
Does the $500 rule apply to group life?
No. Group term life insurance benefits need a slip even when the amount is under $500.
Are Ontario and BC health taxes a taxable benefit?
No. The CRA says employer health tax paid in Ontario or British Columbia isn't a taxable benefit for the employee.
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