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Welcome to the BF Partners Private Health Services Plan Calculator

Canada Revenue Agency recognizes a Private Health Services Plan or (Private Health Services Plan) as a vehicle for Canadian business owners wishing to manage routine health care and dental expenses (such as prescription drugs, eye glasses, physiotherapy, massage therapy, chiropractic care, and dental work such as cleanings, fillings, crowns and orthodontics. The list is pretty exhaustive, if you want to see if something specific would qualify, click here for information from CRA that provides more detail. This calculator supports the latest versions of IE, Chrome, Mozilla and Safari browsers.
  • Total annual family Medical, Drug, Dental, Visioncare, and Disability care expense to be claimed

    Enter the total medical expenses for your family, or an estimate. For medical expenses claimed through a Private Health Services Plan an eligible dependant is defined as:

    A spouse – legal or common-law

    • An unmarried dependent person under 21 years of age
    • An unmarried dependent person under age 25 and in attendance at an institution of higher learning on a fulltime basis.
    • A parent who satisfies the Income Tax Act definition of "dependent". There is no age limit for dependent persons who are incapable of self-support due to mental or physical infirmity.

    CRA deems eligible medical expenses as medically necessary procedures, tests, or items.Here is a short list of common health expenses that can be deducted.

    Here is a short list of common health expenses that can be deducted

      • Ambulance costs
      • Blood tests
      • Chinese Medicine
      • Chiropractor
      • Dental work
      • Prescription Eyeglasses
      • Lab Tests
      • Prescription Medicine
      • Physiotherapy
      • X-Rays
      • Registered Massage Therapy
      • In Vitro Fertilization

    For a complete list and description of eligible expenses, here is a link to Canada Revenue Agency's interpretation: http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s1/f1/s1-f1-c1-eng.html#N1036B

  • T4 employment income of Business Owner
  • Net income of Business Owner (T4 income less deductions such as RRSP, Pension)

    Net Income is your total income less eligible deductions. Common deductions include; RRSP contributions, Pensions plan contributions, child care expenses and eligible support payments made. Net income can be found on your personal tax return on line 236.

  • WCB rate for the business (enter zero if unknown)
  • Is Business Owner opted out of paying EI

    This is included because paying additional T4 income from your Company can often result in extra payroll taxes being paid – such as WCB premiums. According to WorkSafeBC, the average rate paid is $1.70 per $100 (1.70%) of employers' assessable payroll.

  • Does the Business Owner have a spouse who earns an income?

    Medical expenses of both spouses can be combined and claimed on either one of their tax returns. Tax professionals often advise claiming expenses on the lower income spouse's return. Net income for your spouse can be found on line 236 of their personal tax return.

  • T4 employment income of Spouse
  • Net income of Spouse (T4 income less deductions such as RRSP, Pension)

    This is included to see whether you may be eligible for another tax credit called the Working Income Tax Benefit.

  • If you do not have a spouse, do you have an dependent child under age 19

    This is included to see whether you may be eligible for another tax credit called the Working Income Tax Benefit.

    Comparison Results Below :-

    • If you used the Private Health Services Plan method your savings would be :-
    • Lower By
 

 

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Private Health Services Plan Method

  • Total Expenses to your Company
  • Less

  • No CPP, EI, WCB payroll taxes are payable
  • 10% Claim Processing Fee
  • GST on the Processing Fee, Setup Free
  • Tax free claim reimbursement from trust
  • Calculated marginal tax rate of Business Owner
  • Calculated marginal tax rate of Business Owner's spouse
  • Total expense to the Company compared:

  • Tax Return Method
  • Private Health Services Plan Method
  • Savings using Private Health Services Plan
  • Savings %

Tax Return Method

  • Taxable personal income taken from company
  • Plus

  • Company portion of CPP, EI, WCB payroll taxes due on income
  • Total Expenses to your Company
  • Taxable personal income taken from company
  • Less

  • Employee portion of CPP, EI payable on personal income
  • Personal income tax at
  • Sub-total net after tax personal income

Plus

  • Medical expense tax credit
  • CPP/ EI tax credit
  • Medical expense supplement tax credit
  • Working income tax credit
  • Total net after tax to pay expenses

Additional information