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Example of Problem
A small corporation has two owners and one assistant.
As one of the owners, you incur a $2,000 health services expense.
Without a PHSP in place, you must pay for this expense with after-tax dollars.
Assuming that you are in the 39% CRA tax bracket (the top bracket in Alberta, for instance) then your expense actually costs you $3,279 in before-tax income!
A difference of $1,279! Note that even if your tax rate is only 10%, you save and benefit with a PHSP plan. Also note that most provinces have a personal marginal rate in excess of this example; with some provinces over 50%.
If the company can write off the expense, then it may reduce the tax cost a bit – HOWEVER, most costs are deemed to be personal and thus cannot be written off by the company.
 See Saving Comparision and Results..
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