To: All Employees
From: Payroll Manager
Date: 28 September 2023
RE: Enhancing the Group Benefits Plan
The organization is pleased to announce that it has decided to upgrade its Group Benefits Plan by
including vision care coverage and accidental death and dismemberment (AD&D) coverage. It will be a
joint contribution between the company and the employee, with the employee paying 50% of the
premiums for AD&D and vision care.
The following are some of the effects that the addition of new benefits will have on net pay each pay
period:
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AD&D premiums in Manitoba are subject to a 7% retail tax, which is added to the cost of
premiums and divided equally between the employer and the employee each pay period.
The employer-paid AD&D premium is included as pensionable and taxable income and is
regarded as a non-cash taxable benefit. This will lower the net pay on each cheque by increasing
the income tax deduction and Canada Pension Plan (CPP) payments.
Vision care coverage is a private health insurance plan. If an employer pays the insurance
company directly for private health insurance plans, it is not taxed and has no impact on an
employee's take-home pay in Manitoba and all other provinces apart from Quebec. If an
employer pays an employee's expenditures, the sum is regarded as a cash-taxable benefit and is
subject to all applicable deductions.
The policy will be implemented in two months and further details will be shared next week.
If you have any inquiries regarding new benefits and their impacts, please contact me or the Human
Resources department.
Best Regards,
Simranjot Kaur
Payroll Manager