Health Spending Account (HSA) and Lifestyle Spending Account (LSA) differences

Note: This article is about Lifestyle Spending Accounts (LSAs) and Health Spending Accounts (HSAs) that are administered by League. If you have an LSA or HSA through an insurance carrier, it might be a bit different. Learn more in your Wallet.

Health Spending Accounts (HSA) cover the health services that you need to be healthy, such as: dental, optometry, prescription drugs, massage, physiotherapy etc. In most cases, money spent from this account is tax exempt! 

This means you won't be charged income tax on money you spend from this account. There's one exception: HSAs are a taxable benefit in Quebec.

Lifestyle Spending Accounts (LSA) cover many other services and products you can access to live a healthier life, such as: gym memberships, yoga and meditation etc. Money spent from this account is a taxable benefit. You'll either be taxed by your employer on your paycheque, or you'll receive a T4A Form for Canada Revenue Agency (CRA) remittance purposes. You’ll only get taxed on the funds you actually use. 

Money spent from your LSA will be taxed according to your marginal income tax rate as per CRA guidelines. Example: if you use $1,500 in LSA funds, and are taxed at 30% marginal income tax rate, then you will pay $450 in taxes.