Tag Archives: tax

Employment Expenses Must be Considered when Calculating an Income Replacement Benefit

There are many factors that can affect income for an insured. Employment expenses are one piece of this puzzle.

If an employee, in the course of employment, is required to pay certain expenses as a means to earn income, they could have employment expenses. These expenses may be reported on a person’s income tax return, although the allowable amount of expenses will vary depending on how the individual earns income.

These employment expenses are different from business expenses which would be claimed by someone who is self-employed.

For more information on employment status, head over to our blog on that very topic. To learn more about the difference between employed and self-employed, we’ve handily covered that topic in another blog post.

What bearing do these expenses have on an Income Replacement Benefit (IRB)?

Expenses an employee incurs in performing their job, and which are deductible for tax purposes pursuant to the Income Tax Act, would also be deducted in the calculation of an insured’s income for IRBs.

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The Insured Was Paid in Cash; Now What?

Cold, hard cash can be very hard to trace. This makes accounting for cash wages in Income Replacement Benefit (IRB) calculations tricky.

There are any number of instances when a person might be paid in cash: tips for waiting tables, housekeeping, contractors, whether employed or self-employed, and often when working for family members.

So, how do we prove a claimant earned a particular wage where they were paid in cash?

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