Business Solutions



Private Health Services Plan (PHSP)

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A PHSP is a Canada Revenue Agency (CRA) approved plan that allows the medical expenses of employees to become a deductible business expense for the employer. This nationwide plan provides affordable medical coverage for the self-employed, and small business owner. Large corporations benefit from a low cost plan, while employees are provided with an exhaustive list of eligible expenses. While incorporated businesses have no applicable limits, unincorporated business must adhere to the maximum limits set out in the Income Tax Act, Section 118.2(1).



  • Low Cost Non-Taxable Benefit The PHSP is a low cost plan with no deductible, no monthly premiums, and no renewal charges. It allows the company to provide employees with a non-taxable medical benefit while allowing the company to fully tax deductible expense.
  • Deductible Business Expense – A PHSP is an effective way for a business to convert all health, medical and dental expense into a fully tax deductible business expense. This can result in a very significant savings for both the small business owner and the large corporation.
  • Combine with Other Health PlansA PHSP can stand on its own, or can be used as an add-on to an existing plan. Employers determine coverage limits for each class of employee, and can individualize the plan as needs change. Expenses not covered by traditional insurance plans, can become eligible expenses using the PHSP.
  • Extensive Coverage – The PHSP is your medical coverage; therefore it is your choice. Allowable expenses are listed in the Income Tax Act, Section 118.2(2) and include braces, Chinese medicine, crowns, insulin treatments, massage therapy, orthopedic shoes and much more.


Employee Profit Sharing Plan (EPSP)

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An EPSP is a mechanism available under the Income Tax Act that allows an employer to corporately deduct deposits made into a Company Trust that would normally be paid as income or bonuses to an employee. Both the employer and employee are exempt from CPP payroll deductions, as well as other related taxes, for example EI. Some of the highlights of EPSP include:



  • Income SplittingAn EPSP allows income splitting between family members to save tax dollars by utilizing lower income taxation levels. “Kiddie tax” is not applicable.
  • Tax Circumvention – There is no payment taxes payable for both the employer and the employee.
  • Increase Cash Flow Cash flow is increased both personally and within the corporation. Personally by combined income tax savings from income splitting and tax circumvention. Corporately by tax circumvention.
  • Bonus SurrogateThe EPSP can be utilized as an alternative to providing bonuses to employees.
  • Tax DeferralDepending on the business fiscal year end, taxation can be deferred for up to 18 months.
  • Retirement Planning / Wealth AccumulationThe EPSP is a great way for accumulating wealth or saving for retirement without requiring more income, but rather by utilizing savings that are generated.


Health and Welfare Trust (HWT)

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A Health and Welfare Trust is an arrangement, established under the Income Tax Act, between an employer and its employees where the employer agrees to provide one to more benefits for employees and/or their families. The corporation makes tax deductible contributions to the trust to reimburse the trust for payment of the premiums and expenses incurred in providing the benefits.


  • Uses Pre-Tax Dollars – A HWT uses pre-tax dollars to pay for expenses that would normally be paid with after-tax dollars yet remains a non-taxable benefit to the members.
  • Acceptable BenefitsAccidental Death and Dismemberment, Wage Loss Replacement plan, Salary Top Up / Continuation, Long Term Care, and Provincial Health Service premiums can all be expensed through trust.
  • Increase Cash FlowHigher premiums result in larger savings. Typical 50% savings on costs incurred to provide acceptable benefits.
  • Ability to Roll-in Existing ComponentsThe HWT can be set up to hold existing insurance policies, and health services such as Private Health Services Plan (PHSP).
  • FlexibilityEligible benefits are allocated to classes of employees.
  • Benefits ProtectionUnder current legislation Critical Illness benefits remain tax free to the beneficiary even though premiums are being paid by the trust.


CWF Group lends clarity to these questions and so many more.  To find out more click here to speak with one of our specialist.