In Canada, the government provides healthcare to citizens and permanent residents through a public funded healthcare system. However, not all healthcare services and supplies are covered by this system. The Canada Revenue Agency (CRA) provides a list of eligible medical, dental, and wellness services that are tax deductible, when paid by an employer.
For efficiency, the following list of medical expenses should at very least be charged directly to the employer. This makes it tax-deductible for the employee, and free of payroll tax for the employer. To make this all work, the employer can deduct the health expense from the employee’s salary with a health spending account.
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Eligible Health Care Expenses
This includes charges for accommodation and meals, nursing care, operating room fees, laboratory fees, and other hospital services
This covers fees charged by licensed physicians and surgeons for medical services, including consultations, diagnostic tests, and medical procedures
This covers the cost of drugs prescribed by a licensed physician or dentist
This covers the cost of emergency transportation to a hospital or medical facility
This covers the cost of therapy or counseling services provided by a psychologist, psychotherapist, or registered social worker.
This covers the cost of chiropractic treatments provided by a licensed chiropractor
This covers the cost of treatments provided by a licensed naturopath, such as acupuncture or herbal medicine
This covers the cost of nursing services provided by a licensed nurse.
This covers the cost of physiotherapy services provided by a licensed physiotherapist
This covers the cost of medical imaging services, including X-rays, radium treatments, and other radioactive isotopes
This covers the cost of blood transfusions and other blood products
This covers the cost of oxygen therapy and rental of medical equipment, such as nebulizers or oxygen concentrators
Purchase and Repair of Artificial Limbs, Artificial Eyes, Splints, Trusses, Braces, Crutches, Casts and other Prosthetic Devices: This covers the cost of prosthetic devices and related services.
This covers the cost of rental of medical equipment, such as wheelchairs, hospital beds, and walkers
This covers the cost of dental services for TMJ, such as dental appliances or splints
This covers the cost of private health insurance premiums This includes extended health benefits, dental coverage, vision care, disability insurance. See all the tax-implication of private health insurance on employees and employers.
This covers the cost of routine medical check-ups, examinations, and health assessments
This covers the cost of eye exams, eyeglasses, contact lenses, and eye surgeries
Including routine examinations, x-rays, diagnostic and preventative treatment, endodontic and periodontic treatment, fillings and extractions, oral surgery, caps, crowns, fixed and removable bridgework, dentures, and space maintainers and orthodontia treatment for adults and children
CRA provides tax eligibility for wellness services and supplies that are reasonably necessary for the health and wellness of an Employee and Dependent