One of the key drivers for your employees is the Compensation Package you provide and group insurance can be an important, tax-effective component of their Compensation Package.
There are many scenarios where investing in the implementation of a group insurance program makes sense. Let’s take a look at a few of them…
- Your most valuable employee comes to you and says that his spouse has just lost her benefits because she was laid off. So now he says that unless you add benefits, he will have to go look for a job at a place that does have a benefits program. You offer him more money but he then tells you that just isn’t enough after he gets taxed on that increase.
- Let’s say that you are looking at your 5-year plan with a good year behind you and the way things are going, it looks like you’re finally over that hump…The forecast never looked better! You are now in a position to come through on your promise to your employees when they helped you with your start-up business a few years ago, “As soon as we turn that corner, we’ll look at enhancing your compensation.”
- You’re a small business owner that rewards your employees with a year-end bonus but you’ve heard the mumbling…”This $1,000 bonus is great but I only get a little over $600 in my pocket.”
In each of these examples for the employee, a salary increase or year-end bonus is impacted up-front by income taxes. And, the employer has to factor in CPP, EI, Worker’s Compensation, and Employer Health Tax into the equation.
Alternatively, the employer could invest the salary increase or year-end bonus amount towards a more tax-effective health and dental plan.
Located in Cambridge, ON Sharkey Group Insurance provides independent Employee Benefits advice & counsel for Small Businesses across Ontario.