When an employer pays the premiums for an employee's group term life insurance policy, the amount of the premium is considered a taxable benefit for the employee. This benefit must be included in the employee's income for the pay period in which it is provided. The value of the benefit is subject to Canada Pension Plan (CPP) contributions and income tax, but it is not subject to Employment Insurance (EI) premiums. The total annual benefit is reported in Box 40 of the employee's T4 slip.

A. It is a benefit provided to the employee, not a reimbursement for an expense they incurred.

C. Group life insurance premiums are unrelated to the calculation or accrual of vacation pay.

D. A retiring allowance is a specific payment related to termination or retirement, not an ongoing insurance benefit.

1. National Payroll Institute. (2023). Payroll Fundamentals 1. Chapter 4: Taxable Benefits, Section 4.2: Common Taxable Benefits.

2. Canada Revenue Agency. (2023). T4130 Employers' Guide - Taxable Benefits and Allowances. Chapter 4: Benefits, Section: Group term life insurance policies – Employer-paid premiums.