Benji VisserSome HSA invoices show more than the claim and the admin fee.
In Ontario, you may also see RST, GST/HST, and a premium fee.
For Frontier invoices, the province is based on the corporation's address in the account, not the employee's personal address.
Here is what each line means.
The invoice lines
| Invoice line | What it means |
|---|---|
| Claim amount | The eligible medical expense being reimbursed to the employee |
| Admin fee | The provider fee for processing the claim |
| RST | Ontario's 8% Retail Sales Tax, commonly charged on the eligible claim amount |
| Premium fee | Ontario's 2% insurance premium tax, usually shown on the invoice as premium fee |
| GST/HST | Sales tax on the provider's admin fee |
Example: $1,000 Ontario HSA claim
Assume an Ontario corporation has a $1,000 eligible claim and the HSA provider charges an 8% admin fee.
| Line item | Calculation | Amount |
|---|---|---|
| Claim reimbursement | Eligible claim | $1,000.00 |
| Admin fee | 8% of $1,000 | $80.00 |
| RST | 8% of $1,000 claim | $80.00 |
| Premium fee | 2% of claim plus admin fee | $21.60 |
| HST on admin fee | 13% of $80 admin fee | $10.40 |
| Total employer invoice | $1,192.00 |
The employee receives $1,000. The employer pays $1,192.
The extra $192 is the admin fee plus the taxes on the Ontario HSA invoice.
Example: $1,000 B.C. HSA claim
Now assume a B.C. corporation has the same $1,000 eligible claim and the HSA provider charges the same 8% admin fee.
| Line item | Calculation | Amount |
|---|---|---|
| Claim reimbursement | Eligible claim | $1,000.00 |
| Admin fee | 8% of $1,000 | $80.00 |
| Claim taxes | Not charged | $0.00 |
| GST on admin fee | 5% of $80 admin fee | $4.00 |
| Total employer invoice | $1,084.00 |
The employee receives $1,000. The employer pays $1,084.
In B.C., there is no tax on the claim amount. The only tax in this example is GST on the provider's admin fee.
Frontier province comparison: $1,000 HSA claim
This chart assumes a $1,000 claim and an 8% admin fee. It uses Frontier-supported provinces, and the province is the corporation province on the Frontier account.
| Corporation province | Claim amount | Admin fee | RST on claim | Premium fee | GST/HST on admin fee | Total taxes | Total invoice |
|---|---|---|---|---|---|---|---|
| B.C. | $1,000.00 | $80.00 | $0.00 | $0.00 | $4.00 | $4.00 | $1,084.00 |
| Alberta | $1,000.00 | $80.00 | $0.00 | $0.00 | $4.00 | $4.00 | $1,084.00 |
| Saskatchewan | $1,000.00 | $80.00 | $0.00 | $0.00 | $4.00 | $4.00 | $1,084.00 |
| Manitoba | $1,000.00 | $80.00 | $0.00 | $0.00 | $4.00 | $4.00 | $1,084.00 |
| Ontario | $1,000.00 | $80.00 | $80.00 | $21.60 | $10.40 | $112.00 | $1,192.00 |
| New Brunswick | $1,000.00 | $80.00 | $0.00 | $0.00 | $12.00 | $12.00 | $1,092.00 |
| Nova Scotia | $1,000.00 | $80.00 | $0.00 | $0.00 | $11.20 | $11.20 | $1,091.20 |
| P.E.I. | $1,000.00 | $80.00 | $0.00 | $0.00 | $12.00 | $12.00 | $1,092.00 |
| Newfoundland and Labrador | $1,000.00 | $80.00 | $0.00 | $0.00 | $12.00 | $12.00 | $1,092.00 |
| Yukon | $1,000.00 | $80.00 | $0.00 | $0.00 | $4.00 | $4.00 | $1,084.00 |
Why Ontario invoices show these taxes
Ontario applies RST to taxable insurance and benefit-plan amounts. For many HSA invoices, that means RST appears on the claim amount.
Ontario also has a 2% insurance premium tax. On Frontier invoices, this appears as the premium fee. It is commonly calculated on the claim amount plus the admin fee.
GST/HST is separate. It applies to the provider's taxable service fee. In the example above, that is the $80 admin fee.
What about outside Ontario?
Outside Ontario, there is usually no tax on the claim amount.
The Ontario claim taxes are specific to Ontario. The admin fee can still have GST or HST depending on the province.
Sources
- CRA: Medical expenses, including payments from a private health services plan (PHSP)
- CRA: GST/HST calculator and rates
- Ontario Ministry of Finance: Insurance and Benefits Plans - Retail Sales Tax
- Ontario Ministry of Finance: Corporations Tax: Insurance Premium Tax
Related Reading
- HSA tax guide for corporations - Tax-free reimbursements and CRA rules
- Hidden HSA fees in Canada - Compare the full provider invoice
- HSA vs group insurance in Canada - Compare coverage, cost, and risk pooling