Overview of Bene-D-Duct Service Plans

This web site describes the ins and outs of establishing your own  Self-Directed Benefit Plan TM , allowing a tax-free reimbursement  of drug, dental, vision, hospital, and other medical expenses from your business to yourself and your employees.

These benefit plans are called
Private Health Services Plans  (often shortened to  PHSP ) in the Income Tax Act. Most PHSPs  are placed with insurance companies and the insurer charges a set premium. Bene-D-Duct's Self-Directed Benefit Plans TM   are not placed with an insurance company. Rather the Self-Directed Benefit Plans TM   are set up as a "Cost Plus" PHSP as described in the interpretation bulletins under the Income Tax Act.

"Cost Plus" means the payment required to fund the PHSP is exactly equal to the benefit cheques issued to yourself and the employees of your business plus an extra amount to cover the administrative costs of running the plan. Bene-D-Duct charges a low administration fee (for most 1 or 2 employee businesses the charge is between 13-23%, see Administration Fees for complete details).

Compared to the 30-55% taken by the federal and provincial governments in taxes and claw-backs, Bene-D-Duct's 13-23% in administration fees generates a substantial savings.

A $1,000 paid from your business as salary (or business income) will only leave you with between $450-$700 available for after tax spending. However, a $1,000 contribution to your own Self-Directed Benefit Plan TM   will leave you with between $770-$870 available for after tax spending on medical and dental expenses. (in Ontario $713-806 due to the required 8% provincial sales tax).

Since the
Self-Directed Benefit Plan TM   is a Cost Plus PHSP it is mathematically certain whether you will have more after tax dollars left in your pocket with the Plan than without a plan for any given level of medical expenditures. The vast majority of self-employed Canadians will be in the category that saves tax dollars. Even if you are in the lowest federal tax bracket of 16%, you will also save provincial tax of about 6%, CPP contributions of 9.4%, and quite likely a further 5-35% in claw-backs of government support programs, particularly if you have children. So it is well worth your time and effort to understand what we are offering to small businesses.

Your employees, if any, also save taxes when comparing a $1,000 of tax free medical and dental reimbursement cheques versus $1,000 of salary. You should consider the pros and cons of offering your employees such a benefit plan. Read about Employee Considerations for more information.

If you operate a small business in Canada and you look through the pages in this web site we think that you will soon become a customer of ours! So don't delay in finding out about
Bene-D-Duct's Self-Directed Benefit Plan TM !
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