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Private Health Services Plan Premiums Deductibility

Deducting Private Health Insurance Payments

Under ITA S20.01, you can deduct premiums paid to a private health services plan (PHSP) from self-employment income if you meet the following conditions;

    •    – your net income from self-employment for the current or previous year is more than 50% of your total income or
    •    – your income from sources other than self-employment is $10,000 or less for the current or previous year;
    •    – PHSP coverage applies to all arm’s length, permanent, full-time employees;
    •    – amount deducted under PHSP cannot be used for the medical expense tax credit;
    •    – you are actively engaged in your business on a regular and continuous basis, individually or as a partner
    •    – deductibility for coverage limits will be a maximum $1,500 each year for the self-employed person and his or her spouse and $750 for each kid.
    •    – the insurance must be purchased from a third party who is licensed or otherwise authorized under the laws of Canada or a province to carry on an insurance business in Canada.


For more information, see your accountant to discuss whether you can claim it or not.