Do my employees need to pay tax on the Shield plan premium if I provide them with a Shield plan?
You can pay the premium of the Shield plan in 2 ways:
- Pay the insurance company directly on behalf of your employees.
Employees will be taxed. As the beneficiary of the Shield plan is the employee and this constitutes a benefit-in-kind provided by the employer, the employee will be taxed on the full amount of premium paid by the employer.
- Reimburse the amount of premium into your employees’ Medisave accounts.
Employees are not taxed, subject to a limit of $1,500 per employee per year. This limit will be raised to $2,730 from 1 January 2018.