Health Spending Plans

What is a Personal health Spending Plan?

Personal Health Spending Plan allows you as the corporation or a self-employed person, to deduct a wide range of medical and dental services.

A Health Spending Account is a self-funded plan, in which the employer is responsible for providing health care benefits to its employees up to a pre-determined dollar value.

Through a Personal Health Spending Plan, a corporation can deduct the owner/employee’s eligible medical and dental services. The range of services that can be deducted through this type of plan, are extensive, and encompasses a wider range of services than are generally covered under traditional health and benefit plans..

The corporation can then write off 100% of the cost.

As owners/employees, you must draw a minimum salary of $3680.00 (subject to change, to ne considered an employee of your company and to participate in a PHSP.

The reimbursement that is paid to the employee or owner is a tax-free benefit.

A Personal Health Spending Plan can be used instead of, or in conjunction with, a traditional Health Benefits Insurance Plan.

Personal Health Spending Plans are defined as Private Health Services Plans by Section 248(1) of the Income tax Act and on Interpretation bulletin IT339R2 and IT539R2 (1988 and subsequent taxation years).


ITT39R2 Personal Health Spending Plan

Benefits to the Employee

  • Allows flexibility to choose where health dollars are spent.
  • Allows for a broader range of health coverage if required.
  • Benefits are tax free to the employee.

Why a PHSP?


The cost of the program is set and can be budgeted for each year.

The business owner has flexibility and control of their health spending costs.

All amounts claimed through the company are considered a tax-deductible business expense.

Different Benefit levels can be assigned to different employee categories.

The benefits are tax free to the employee.

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