Sound management of employer / employee contributions allows for substantial tax savings by taking advantage of all the complex tax rules and constraints associated with each of your plan’s benefits.
Bene-FIX offers a simple and economical CLOUD solution to take care of delivering the optimized calculations automatically taking into account the specific terms of your collective agreement.
As an employer, only 2 actions are required:
– # 1 outline the contribution factors you need implemented, such as a 50-50 share of the premium between the employer and the employee,
– # 2 indicate the number of pay periods for maintaining contributions in case of life events
And VOILÀ :
- The system automatically calculates the amounts for each benefit to minimize taxable benefits while maximizing deductible expenses.
- For this particular case, the optimization indicates a provincial taxable benefit of $ 110.43, while you can take advantage of a $ 184.79 tax deduction from the provincial and $ 74.36 from the federal for each pay period.
- Please take note that to achieve this optimization, the system does not share, like most, less sophisticated systems, each of the individual benefit according to the 50-50 rule. The superior intelligence of bene-FIX ensures that the employee first pays the benefits allowing a deductible expense providing the employer the opportunity to make its contribution on non-taxable benefits.
- On top of significant tax saving for both the employer and the employee, bene-FIX automatically protects against plan corruption of non-taxable disability insurance. One needs to remember that an accidental employer contribution of as little as $ .01 makes the disability benefits fully taxable with significant financial downfall.
- Compare this optimization to that of popular payroll systems offering a so-called contribution calculation. You will quickly realize the substantial savings that Bene-FIX brings.
- This example of the end-of-year cumulative report, automatically generated for each employee to incorporate into their tax return, demonstrates the importance of tax optimization. The employee can deduct his insurance contribution of over $ 5,000 to the provincial and almost $ 2,000 to the federal government.
These optimizations obviously have a direct impact on the employer’s tax contributions, since efficient tax optimization can reduce taxable wages and consequently limit employer contributions to various government programs including unemployment insurance, health insurance or even the Quebec parental insurance program.
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