Lifestyle Spending Accounts (LSAs) cover many services and products that allow you to live a healthier life. This includes items like gym & studio memberships, fitness trackers, and athletic gear. Reimbursements from this account are considered a taxable benefit, meaning you will pay taxes on the money you receive from this account.
How much will I get taxed?
Money spent from your Lifestyle Spending Account will be taxed according to your marginal income tax rate as per Canada Revenue Agency guidelines. You’ll only get taxed on the funds you actually use.
Example: If you allocated $2000 in LSA funds, but only used $1000 and are taxed at a 30% marginal income tax rate, then you will owe approximately $300 in taxes.
How do I report this benefit when filing my taxes?
Generally, there is no extra work required for League members in order to report this benefit on your taxes. The amount of money spent from your Lifestyle Spending Account will be reported to your employer, who will include it on your T4 for the year.