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Result With No PHSP
Without a PHSP in place, it will cost you $3,279 in before-tax income to pay for a $2,000 after-tax health services expense. or 64% more than the health services expense!
A $2,000 health services expense has cost you $1,279 more in pre-tax income!
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Result With PHSP
Your company pays the health services expense plus 10% (plus GST) to HealthSAVE Inc.
Your company can now write off the full cost of $2,200 – at a 15% tax rate, your company will save $330 in taxes.
HealthSAVE Inc. reimburses you for the health expense (or pays your fee directly to the service provider) CRA allows this to be paid to you tax free.
Bottom line: The health services expense, in before-tax dollars, costs you and your company only $2,200 - 330 = $1,870! The benefit is tax-free.
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TOTAL SAVINGS
YOUR SAVINGS after-tax: Personal Tax Savings: $1,279 Corporate Tax Savings: $330
YOUR TOTAL SAVINGS: $1,609
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