Beginning with the 2023 tax year, the Canada Revenue Agency (the CRA) requires employers to report the availability of dental benefits to employees and their families to assist in the administration of the Canadian Dental Care Plan (CDCP), which aims to provide dental coverage to uninsured Canadians.
The CRA has confirmed that Health Canada will extend its administrative policy for a non-penalty approach when a 2024 tax slip is blank, provided the employee has no access to dental coverage and when employers have made all reasonable efforts to comply with reporting requirements.
Health Canada has indicated this policy will not continue beyond 2024. Employers are encouraged to use this final year of administrative relief to fully understand the requirements and review the available educational and compliance resources.
Reminder:
T4 Slip Reporting:
Employers must complete Box 45 on the T4 slip to indicate the level of dental coverage employees had access to as of December 31 of the tax year. The applicable codes are:
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Code 1: No access to any dental care insurance or coverage of dental services.
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Code 2: Coverage for the employee only.
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Code 3: Coverage for the employee, spouse, and dependent children.
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Code 4: Coverage for the employee and spouse.
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Code 5: Coverage for the employee and dependent children.
T4A Slip Reporting:
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Box 015 – Payer-Offered Dental Benefits: For T4A slips, this box must be completed if an amount is reported in Box 016 (Pension or Superannuation). The same coding system applies as with the T4 slips.
Annual Limits for Registered Plans and RRSPs in 2025
The Federal Government has announced the updated annual limits for registered plans and Registered Retirement Savings Plans (RRSPs) for 2025. Below are the details:
|
Plan Type |
Annual Limit 2024 |
Annual Limit 2025 |
|
Defined Contribution (DC) or Money Purchase RPP |
$32,490.00 |
$33,810.00 |
|
Defined Benefit (DB) RPP
|
$3,610.00 $31,890.00 |
$3,756.67 $33,210.00
|
|
Deferred Profit Sharing Plan (DPSP) |
$16,245.00 |
$16,905.00 |
|
Registered Retirement Savings Plan (RRSP) |
$31,560.00 |
$32,490.00 |
Employer responsibilities include:
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Communication: Inform employees about the updated contribution limits for their registered plans, ensuring they understand how these changes may impact their retirement savings strategies.
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Plan Administration: Ensure that the company's retirement plans are administered according to the new limits, making necessary adjustments to contributions as required.
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Compliance: Stay informed about legislative changes and ensure that all retirement plans comply with federal regulations to avoid potential penalties.
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Education and Support: Provide resources and guidance to help employees make informed decisions about their contributions and retirement planning.
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Monitoring Contributions: Regularly monitor employee contributions to ensure they do not exceed the annual limits set by the government. Exceeding these limits could have tax implications for both the employer and employee.
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Advise senior management and Finance since these new limits could impact an organization’s budget forecasts.
By fulfilling these responsibilities, employers can support their employees' retirement planning efforts while remaining compliant with federal regulations.