Topic
Lifestyle spending accounts
Articles and answers about lifestyle spending accounts.
Articles about lifestyle spending accounts
- Health spending accounts5 minute readHealth spending accounts: should your HSA be separate from your group benefits plan?When it makes sense to keep a health spending account with your group benefits plan, and when to set it up separately.
- Health spending accounts5 minute readIntroducing flexible spending accounts: a tailored employee benefits solution for your businessHow a flexible spending account lets employees split an employer-funded amount between health and lifestyle expenses.
- Lifestyle spending accounts5 minute readThe comprehensive guide to lifestyle spending accounts (LSAs) in CanadaHow a lifestyle spending account works, what it can cover, and how it’s taxed for your employees.
Questions about lifestyle spending accounts
What is a lifestyle spending account?
It’s an employer-funded account that reimburses employees for lifestyle and wellness costs in the categories you choose, such as fitness, family activities or learning. You set the annual amount. LSAs are also called wellness spending accounts or personal spending accounts. Unlike a health spending account, reimbursements are taxable to the employee.
What expenses can be covered under a lifestyle spending account?
You choose which categories your plan covers. Common ones include fitness and recreation, family leisure, wellness, transportation, and learning and development. What qualifies in each category is set in your plan.
Are lifestyle spending account funds taxable to the employee?
Yes. Reimbursements are a taxable benefit for the employee: each one is added to their income and goes through payroll like regular pay. For you, the employer, the cost is a deductible business expense, and you pay your share of CPP and EI on the reimbursements, as on regular pay.
How much do employers put into an LSA?
There’s no typical amount. Every employer is different: you set an amount that fits your budget and goals, and it can differ by employee class, such as management and staff. We can help you decide what makes sense.
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