Quebec taxable benefits: 2016 rates
To: Administrators of Public Service Pay and Pension Systems, Participating Separate Employers
The purpose of this notice is to inform you of the updated 2016 Quebec taxable benefits calculations for the Pensioners’ Dental Services Plan (PDSP), and the Public Service Dental Care Plan (PSDCP). Adjustments are required to reflect actual plan experience.
Note: The taxable benefit reported herein was calculated by Treasury Board of Canada Secretariat (TBS) and is the value these benefits represent for income tax purposes using one of the two acceptable methods as prescribed by the province of Quebec. This amount is not equal to the monthly employer contribution rate which is an amount calculated for the purpose of Leave Without Pay (LWOP) and participating separate employers.
How is the Quebec taxable benefit calculated?
Since 1993, Employer contributions towards certain group insurance plans are considered a taxable benefit to employees who reside in Quebec. According to the Ministère du Revenu du Québec publication on Taxable benefits, “Where a group insurance plan provides identical coverage to employees subject to different legislation (that is, Quebec legislation and legislation in effect elsewhere), the Employer may use one of two methods to calculate the value of benefits received by employees. The Employer must choose the method that best reflects the coverage provided to these employees under the plan.” The two methods are:
“Method A: The amount representing the value of an employee’s coverage is determined on the basis of actual data for all employees covered under the plan. (standard method)”
“Method B: The amount representing the value of an employee’s coverage is determined on the basis of the actual data for the employees subject to the Quebec legislation.”
Calculation methodology adopted by TBS
Following a 2003 review of the Quebec legislation, TBS officials determined that the Method A would be the standard approach implemented. As a result, each year actual claims data from four of the five PSDCP plans is combined within the taxable benefit calculation formula to create one rate. The exception is the Canadian Forces Reserve Component (55999). Their particular eligibility criteria and reservists’ tenure/status has resulted in a separate taxable benefit calculation to be performed based on that group’s actual claims data.
Methodology A has also been adopted for use in determining the taxable benefit amount for PDSP pensioners.
What is the purpose of the calculations?
These calculations serve a dual purpose, as described below.
Primarily, the figures calculated by TBS signify the “value” these benefits represent for income tax purposes for residents of Quebec.
- In accordance with the chosen methodology, the figures provided below must be used to adjust the 2016 Relevé 1 taxable benefit value associated with participation in the PSDCP and PDSP.
These figures should also be used to estimate the taxable benefit amount that must be collected and remitted starting in .
PSDCP (for Groups 55555, 55666, 55777 and 55888): $891.36 per annum or $74.28 monthly.
PSDCP (for Group 55999): $141.96 per annum or $11.83 monthly.
PDSP: $384.72 per annum or $32.06 per month.
Note: As the Public Service Health Care Plan (PSHCP) employer rates are updated annually, the pay/pension systems already reflect the correct taxable benefit amount for this plan.
Pay and pension system amendments are required to the 2016 Taxable Benefits reported on behalf of residents of Quebec participating in the PSDCP and PDSP.
Should you have any questions regarding this notice, please contact Treasury Board of Canada Secretariat, Pensions and Benefits Sector.
Assistant Deputy Minister
Pensions and Benefits Sector
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