Group term life insurance is one of the most common non-cash taxable benefits provided by employers

In this case, when the premium cost is fully paid by the organization, the impact will be at below:

Employee’s net pay:

Amount of premium, plus any applicable taxes, will be added to the employee’s gross pensionable and
taxable income, on a pay period basis. Hence, we need to know the pay period frequency.

For example, if the employer pays an annual premium of $600 and the pay period frequency monthly,
an amount of $100 will be added to the employee’s earnings for each pay period.

The amount will be used to calculate Canada Pension Plan (CPP) contributions and for income tax
withholdings.

Employer’s Payroll Cost:

Group term life insurance is a non-cash benefit paid by the employer. Since the employer pays the
premiums for this insurance, it increases the payroll costs of the employer.