Contributing to a supplementary unemployment benefit plan

From Canada Revenue Agency

Contributions to a supplementary unemployment benefit plan (SUBP) can be made to the plan’s trustee by the participating employer(s) up to a maximum. Employee contributions to a SUBP are not permitted.

Contribution limits

Employer(s) can contribute to the SUBP up to a limit: the maximum funding level. Once this level is reached, the employer(s) must stop making contributions until payments from the fund have started.

Use the following formula to determine the maximum funding level:

1/3 x the amount of weekly SUBP benefits payable x the number of weeks benefits are paid (maximum of 52) x the number of eligible employees.

Contribution deductibility

Subsection 145(5) of the Act provides the employer with a deduction in respect of SUBP contributions that were paid based on plan terms and were not deducted when calculating the employer’s income for a preceding year. Generally, this includes employer contributions paid during the year. It can also include contributions made in the first 30 days of the following year that are considered to have been made for the preceding year.

Related links

• Income Tax Act, section 145
• Employment Insurance Regulations, section 37