Deductions, wage-loss replacement plan benefits

Annie Chong, manager of Carswell’s payroll consulting group, fields questions from readers
|Canadian Payroll Reporter|Last Updated: 11/16/2010

Question: Under our wage-loss replacement plan, we pay benefits directly to employees who are off work due to things such as illness or disability. Are these benefits subject to source deductions?

Answer: Benefits provided under a wage-loss replacement plan are subject to employment insurance (EI) and Quebec Parental Insurance Plan (QPIP) premiums as well as income tax deductions if they are paid to an employee from a wage-loss replacement plan the employer is responsible for funding.