Corporations Tax: Insurance Premium Tax
Learn about tax on insurance premiums for people and property in Ontario under the Corporations Tax Act.
Find information about Retail Sales Tax on certain insurance premiums and benefits plans.
Important:
Changes to filing, payment and benefit plan reporting requirements are coming. Review the What's new section below and register for a free webinar to learn how these changes may affect you.
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What’s new
File your return online (effective December 1, 2026)
Beginning December 2026, you will no longer receive a paper CT-IP return. To access and file your CT-IP return online, register for ONT-TAXS online.
Financial institutions no longer accept paper remittance vouchers for in-person payments (effective December 1, 2026)
If you currently use paper remittance vouchers to make payments to the Ministry of Finance in person at a financial institution, you will need to use another payment method. Learn about available payment options.
New election option for funded benefit plans (effective April 1, 2026)
Funded benefit plans may elect to be treated as unfunded benefit plans. Learn more about elections.
Updated CT-IP return (effective December 1, 2026)
Benefit plan administrators are required to complete a new online schedule as part of the annual CT-IP return.
Learn more
Join the Ontario Ministry of Finance for a free one-hour webinar about upcoming CT-IP changes, including the new election process, annual return schedule and online filing.
Overview
In general, insurance companies operating a business through a permanent establishment in Ontario pay Corporations Tax - Insurance Premium Tax (CT-IP) on all premiums.
Learn more about the rules in section 74 of the Corporations Tax Act
Along with insurance companies, CT-IP is collected and paid to the Ontario Ministry of Finance by:
- administrators of funded and unfunded benefit plans
- insurance brokers placing insurance contracts with unlicensed insurers
- persons contracting with unlicensed insurers
- reciprocal or inter-insurance exchanges
Insurance Premium Tax rates
| Type of Insurance | Rate |
|---|---|
| Life | 2% |
| Accident | 2% |
| Sickness | 2% |
| Property | 3.5% |
| Other | 3% |
Benefit plans
A benefit plan (also referred to as an Uninsured Benefit Arrangement) provides protection against risks to individuals that could otherwise be covered by taking out a contract of insurance. Benefits may be partly insured or not insured at all.
Benefit plans may include coverage for:
- death or disability
- supplemental health care (such as drugs, dental, vision or hearing care)
- loss of income due to illness or accident
- other similar benefits
Benefits such as stock options and bonuses are not subject to CT-IP.
Funded and unfunded benefit plans
A benefit plan may be funded or unfunded.
A benefit plan is considered a funded plan if the contributions paid into it are in excess of the amounts required for the payment of benefits foreseeable and payable within 30 days.
Any other benefit plan is an unfunded benefit plan.
Planholder
A planholder is the person who provides a benefit plan to members or arranges for the plan to be provided.
In most cases, the planholders are the employers who are seeking to provide the benefits as part of their employee compensation packages.
A benefit plan may also be in the form of a qualifying trust.
A qualifying trust means a trust that is established on or after December 1, 2010 that qualifies as an employee life and health trust under subsection 144.1(2) of the Income Tax Act (Canada) at any point in the taxation year. In the case of a benefit plan which is an Employee Life and Health Trust (ELHT), the trustees are the planholders.
Member
A member is an individual to whom or for the benefit of whom benefits are payable under a benefit plan.
Members are typically employees.
Administrator
Administrators can include :
- persons who receive contributions or make payments of benefits
- persons to whom fees are paid for administering plans
- third-party administrators
- trustees if the benefit plan is a trust
- partners of a partnership that administers the plan
- the planholder of the plan, if:
- the planholder self-administers their benefit plan, or
- if person who receives the contribution or pays the benefits does not have a permanent establishment in Ontario
An Ontario administrator is required to register with the ministry for a CT-IP account, as well as collect and remit CT-IP to the ministry. The CT-IP collected by the administrator is considered a debt owed to the Crown. It must be reported and remitted in the same way as other taxes payable under the Corporations Tax Act.
Out of province administrator
If an Ontario planholder (such as a corporation or employer) engages an out of province administrator who does not charge or collect Ontario CT-IP, the Ontario planholder becomes the Ontario administrator and is responsible for collecting and remitting CT-IP to the ministry.
The Ontario planholder must:
- self-assess the CT-IP owing
- remit the CT-IP to the ministry
Alternatively, the Ontario planholder may also require their out of province administrator to voluntarily register with the ministry and collect and remit the tax on their behalf.
Examples of administrator registration
Example 1: Self administration
Corporation A offers a Health Spending Account that covers:
- dental
- drugs
- vision benefits
This is an unfunded, pay-as-you-go plan. Corporation A chooses to self-administer the plan and does not hire a third-party administrator.
As the planholder and administrator, Corporation A is required to register with the ministry for a CT-IP account, file a return and remit CT-IP to the ministry.
Example 2: Shared administration and arrangement under subsection 74.2(9)
Corporation A is an Ontario-based company. It has established an Employee Life and Health Trust (ELHT), with all trustees based in Ontario. The ELHT provides the following benefits:
- supplemental health
- dental
- short-term disability benefits
The ELHT has contracted an Ontario Insurer B to administer the supplemental health and dental benefits. The trust self-administers the short-term disability benefit.
For CT-IP purposes:
- Insurer B and the trustees of the ELHT are considered administrators
- Both are required to register with the ministry for a CT-IP account
- An arrangement in the form of a section 74.2 (9) election allows only one Ontario administrator to report and remit the CT-IP. The administrator who files the return must certify that all tax payable is accounted for in their return. Other Ontario administrators may still be held liable for any tax that has not been accounted for.
How CT-IP applies
CT-IP is charged differently depending on the type of benefit plan:
- For funded benefit plans, CT-IP is charged on the taxable contributions paid into the plan by the planholder and the members.
- For unfunded benefit plans, CT-IP is charged on the taxable benefits paid out of the plan.
- Effective April 1, 2026, planholders of funded benefit plans can make an election that would trigger a CT-IP liability once benefits are paid out of the plan, instead of when contributions are paid into the plan. Learn about electing to treat a funded benefit plan as an unfunded benefit plan.
CT-IP also applies to any payments made for administration fees, regardless of the type of plan.
Examples of CT-IP calculations
Example 1: Funded plan (with no election made)
Employer A is based in Ontario and has established a funded plan using a trust to provide employee health benefits. Employer A has chosen not to make an election to be treated as an unfunded benefit plan.
Benefits are delivered as follows:
- Dental and vision benefits administered by Administrator B, a company with a permanent establishment in Ontario.
- Supplementary health benefits managed in-house.
On the first day of each month, Employer A makes a $102,000 payment to the trust. The payment consists of:
- $90,000 in contributions used to pay benefit
- $10,000 administration fees that will be paid to Administrator B
- $2,000 CT-IP payable to the Ministry of Finance [($90,000+$10,000) x 2%]
CT-IP treatment
The trustee must collect and remit CT-IP when the monthly contributions are received.
No additional CT-IP is payable:
- when Administrator B invoices the trust for dental or vision benefit claim amounts
- on the administration fee charged by Administrator B
- when the trust pays supplementary health benefits to employees
Note: This example does not include other taxes such as Retail Sales Tax.
Example 2: Unfunded benefit plan
Employer A is an Ontario-based company who has hired Administrator B, a company with a permanent establishment in Ontario, to manage its employee benefit plan. Under this arrangement, funds are not pre-deposited into the plan. Administrator B charges an administration fee equal to 10% of the benefits paid.
An employee incurs $1,000 in medical expenses that are fully covered by the plan.
The claim is processed as follows:
- The employee submits a claim to Employer A.
- Employer A forwards the claims to Administrator B.
- Administrator B reviews the claim, determines the reimbursement amount and sends an invoice to Employer A.
- Employer A pays the invoice to Administrator B.
- Administrator B pays the employees.
CT-IP calculation
- Taxable benefit: $1,000
- Administration fee: $100 ($1,000 x 10%)
- CT-IP amount: $22 (($1,000 + $100) x 2%)
- Total invoice: $1,122
Administrator B invoices Employer A for a total of $1,122, including CT-IP that Administrator B remits to the Ministry of Finance.
Note: This example does not include other taxes such as Retail Sales Tax.
Exemptions
Benefit plans do not include:
- a plan or fund established by or under an Act of the Parliament of Canada or the Ontario Legislature
- a contract referred to in section 4 of the Prepaid Hospital and Medical Services Act between an association registered under that Act and its subscribers or members
Amounts that are exempt under benefit plans:
- benefits for a member of the plan who is an Indian within the meaning of the Indian Act (Canada), who is ordinarily resident on a reserve in Canada
- benefits for a member of the plan who does not live in Ontario
- benefits for a member of the plan that must be included as income from an office or employment under the Income Tax Act (Canada) (e.g., certain wage loss payments).
Electing to treat a funded benefit plan as an unfunded benefit plan
Effective April 1, 2026, all funded benefit plans may elect to be treated as an unfunded benefit plan.
When an election is made, CT-IP is no longer collected on contributions paid into the funded plan on or after the election’s effective date. Instead, CT-IP is payable when taxable benefits are paid out of the plan, as if the plan were an unfunded plan.
How to make an election
A planholder may elect to treat a funded benefit plan as an unfunded benefit plan by completing the election form and submitting it to their administrator. Planholders do not submit election forms to the Ministry of Finance.
Complete the Election or Revocation of Unfunded Benefit Plan Status.
Each election form applies to one administrator. If you have more than one administrator , you must submit the form to each administrator.
If you change administrators, you must complete and submit a new election form to the new administrator.
As a transitional measure, planholders may make an election until June 30, 2027, with an effective date as early as April 1, 2026. After June 30, 2027, elections may only be made on a prospective basis and cannot be backdated.
Administrator responsibilities for elections and revocations
If you receive an election or revocation form, you must:
- retain the completed form and supporting documents in your records
- make records available to the ministry upon request
- report elections and revocations made during the tax year on a schedule filed with your annual return
As part of your annual return, you must attest to the accuracy of all information reported on the return and that you maintain records sufficient to verify the information reported on the return, such as elections, revocations, and tax paid contributions.
Tax-paid contributions
On the effective date of the election, a funded benefit plan may have contributions on which CT-IP has already been paid. These amounts are referred to as tax-paid contributions.
Administrators should track tax-paid contributions separately from contributions received after the election date.
After an election is made, the CT-IP tax liability on taxable benefits and net administration fees is reduced by the amount of tax that was paid on the tax-paid contributions.
When determining the amount of tax-paid contributions as of the election date, investment income earned on those contributions is not included.
If no CT-IP is payable for taxation years following the election, administrators are encouraged to continue to filing Nil returns with the Ministry of Finance to avoid receiving default notices.
Contributions after the election date
After the amount of benefits paid out equals the balance of tax-paid contributions at the time of the election, CT-IP is to be paid when taxable benefits are paid out of the plan, as if the plan were an unfunded plan.
Learn about Instalments and balance due for instalment considerations for planholders and administrators who have made elections.
How to revoke an election
To revoke an election, planholders must complete the revocation section of the election form and submit it to the administrator.
The plan will be treated as a funded plan as of the date of revocation.
Example: Funded plan with an election to be treated as an unfunded plan
Employer A, is based in Ontario and has established a funded plan using an employee life and health trust (ELHT) to provide employee health benefits. The EHLT has a fiscal year end of December 31.
The ELHT trustee is registered with the ministry to collect and remit CT-IP. As a planholder, the trustee elects to have the plan treated as an unfunded benefit plan effective September 1, 2026.
As of September 1, 2026, the trustee determines that the plan’s reserve fund balance is $50,000, consisting of:
- $40,000 is tax-paid contributions and
- $10,000 is funds on which CT-IP has not been paid.
CT-IP treatment
- January 1 to August 31, 2026 : CT-IP is reported as a funded plan
- September 1 to December 31, 2026 : CT-IP is reported as unfunded plan
Effective September 1, 2026, CT-IP is payable on the taxable benefits paid out of the plan.
CT-IP is not payable on the first $40,000 of taxable benefits paid out of the plan.
Note: This example does not include other taxes, such as Retail Sales Tax.
Insurance contracts with unlicensed insurers
An unlicensed insurer is an insurer that is not licensed under the Insurance Act to carry on an insurance business in Ontario.
CT-IP is payable by an Ontario corporation that enters into or pays premiums under an insurance contract with an unlicensed insurer.
CT-IP is also payable by an Ontario individual who, through an Ontario insurance broker, enters into or pays premiums under an insurance contract with an unlicensed insurer.
The insurance contract is in respect of property situated in Ontario or a person who is resident in Ontario, but does not include life insurance.
Who pays the CT-IP
- if you buy insurance directly from an unlicensed insurer, you must remit the CT-IP to the ministry
- if you use an Ontario licenced insurance broker, the broker should:
- register with the ministry
- charge, collect, and remit the CT-IP on your behalf
Reciprocal or inter-insurance exchanges
CT-IP applies to reciprocal or inter-insurance exchanges. These are a group of subscribers exchanging reciprocal contracts of indemnity or insurance with each other through the same attorney.
Subscribers are typically organizations that self-insure their members, such as:
- hospitals
- school boards
- municipalities
- law firms
Insurance exchanges are not required to make instalment payments, but must pay the tax by the balance due date.
Register for a CT-IP account
Who needs to register
Persons that are required to register for an CT-IP account include:
- insurance companies carrying on business through a permanent establishment in Ontario
- Ontario administrators of a benefit plan such as third party administrators, trustees, planholders
- insurance brokers placing insurance contracts with unlicensed insurers
- Ontario corporations contracting with unlicensed insurers, for example an Ontario company purchases insurance policy through an out-of-Ontario parent company who places the contract with an insurer that is not licensed in Ontario
- reciprocal or inter-insurance exchanges within the meaning of the Insurance Act
- other entities liable to calculate, collect and remit the CT-IP
Before you register
You need an Ontario Corporation Number before you can register for a CT-IP account.
- get an Ontario corporation number
- once you have your corporation number, you can request a CT-IP account from the Ministry of Finance
- download and complete the registration form
If you have any questions, please call the ministry at
After you register
After registering your CT-IP account, sign up for ONT-TAXS online, Ontario’s secure tax service for businesses.
With ONT-TAXS online you can:
- file returns
- make payments
- send and receive secure messages
- view account information and manage your CT-IP account online
You can authorize your employees or representatives (such as your accountant or bookkeeper) to file tax returns and make payments on your behalf using ONT-TAXS online.
File your return and make payments
Beginning December 1, 2026, you will no longer receive a paper CT-IP return.
File your return and make secure payments through ONT-TAXS online.
Important: Beginning December 1, 2026, financial institutions will no longer accept paper remittance vouchers for in-person bill payments. If you currently use paper remittance vouchers to pay your taxes, you will need to switch to another payment method before December 1, 2026.
Read on: Corporations Tax – Insurance Premium Tax Return Guide
Due dates
A completed tax return and any supporting documents must be filed within six months after the end of your tax year. If the return is filed late, a penalty may be imposed. Payments for balance of tax due for the tax year are either two or three months after the end of your tax year.
Application of payments
Payments and credits are first applied against any tax owing, second against any penalty owing, third against any interest owing, and fourth against any other amounts owing.
Assessment
An assessment will be mailed to you after your tax return is processed. If you have an outstanding balance on your account, you will receive a monthly statement. If you are entitled to a refund, it will be paid after your assessment is issued.
Estimated amount owing
If you do not file your tax return on time you may receive an assessment that has automatically estimated an amount of CT-IP owing.
Instalments and balance due
Instalments are not required to be made by an insurance exchange, or under the following circumstances:
- the current taxation year is the first year filing
- the CT-IP for either the current taxation year or the previous taxation year is less than $2,000
Quarterly instalments
Instalments may be paid quarterly (every three months) if the CT-IP for the current taxation year or the previous taxation year is equal to or greater than $2,000 and less than $10,000. Quarterly instalments should be calculated according to one of the following three methods:
- 1/4 of the CT-IP for the current taxation year
- 1/4 of the CT-IP in the previous taxation year
- for the first quarter of the taxation year, 1/4 of the CT-IP from two years ago; and for the next three quarters, 1/3 of the difference between the previous taxation year’s CT-IP and the instalment paid for the first quarter
Monthly instalments
Instalments must be paid monthly if the CT-IP for both the current taxation year and the previous taxation year are each $10,000 or more. Monthly instalments should be calculated according to one of the following three methods:
- 1/12 of the CT-IP for the current taxation year
- 1/12 of the CT-IP in the previous taxation year
- for the first two months, 1/12 of the CT-IP from two years ago; and for the next 10 months, 1/10 of the difference between the previous taxation year’s CT-IP and the amount paid for the first two months
The use of the first method requires estimating the CT-IP in the current taxation year. Where the instalments made are less than the actual tax payable, interest may be assessed on any deficiency in the instalment account.
When calculating instalments for a previous year that has less than 365 days, the CT-IP for that previous year must be grossed up to 365 days. Furthermore, if a previous year has less than 183 days, the CT-IP for that previous year is the greater of the:
- CT-IP for that previous year grossed up to 365 days, or
- CT-IP for the most recent year that has more than 182 days grossed up to 365 days
A corporation that is the successor corporation of amalgamated corporations must use the total predecessor corporations’ CT-IP in the computation of instalments.
A corporation that is involved in a wind-up or rollover must include the subsidiaries’ CT-IP or the transferor corporations’ CT-IP in the calculation of instalments.
Instalment due dates
For taxation years that end on the last day of a month, instalments (monthly or quarterly) are due by the last day of the following month or quarter. For taxation years that do not end on the last day of a month, instalments are due by the same day of the following month or quarter.
Balance of tax due
The difference between the current year CT-IP and the amounts paid by instalments represents the balance of tax due.
The balance of tax due must be paid within three months after the end of the taxation year, if your corporation was a Canadian controlled private corporation (CCPC) throughout the taxation year and the taxable income in the prior year was less than or equal to $500,000.
The taxable income is grossed up to 365 days if the prior year has less than 51 weeks.
In all other cases, the balance of tax is due within two months after the end of your taxation year.
Instalment considerations for funded benefit plans that make an election to be unfunded plans
An election may be made mid-period, or an administrator may handle both funded and unfunded plans.
- The same instalment rules outlined above apply. Administrators may make instalment adjustments if they estimate their current year’s tax liability may be reduced due to the election. This is because post-election contributions are not subject to CT-IP, and tax payable on benefits may be reduced by the previously taxed contributions for some time.
- If instalment adjustments were not made, there will be instalment re-calculation at filing of the first return after election that may result in an overpayment situation. An overpayment on the instalment account is subject to credit interest. An administrator may choose to receive a refund of the overpayment or move the credit balance to another taxation year.
- The ministry may make a refund of instalments before assessing an administrator’s return for the year if a request has been made in writing.
Interest and penalties
Calculating interest
Interest is calculated and compounded daily for every day that there is a surplus or deficiency in a corporation’s account.
The corporation’s account is divided, by period of time, into an instalment account and a tax account.
- the instalment account begins on the first day of the taxation year and ends on the day before the balance of tax due date
- the tax account begins on the balance of tax due date which is two months (or three months for a CCPC) after the end of the taxation year
Interest rates
- surplus (overpayment): the ministry pays interest at 3 percentage points below the base rate
- deficiency (underpayment): the corporation pays interest at 3 percentage points above the base rate
The base rate approximates the average prime rate of the major Canadian banks.
A deficiency includes:
- unpaid CT-IP
- interest
- penalties
- other unpaid amounts
Late filing impact
If your tax return is not filed on time, no interest will be paid on any surplus for the period between:
- the due date of the return, and
- the date the return is filed
Delay in processing
You will not be charged interest or penalties if there is a delay in processing your return, as long as you:
- make your instalment payments on time
- pay the balance of CT-IP in full
- file your tax return on time
Penalties for late or incomplete tax returns
You may be charged a penalty if you file your CT-IP return late or submit an incomplete return.
First late return
If you file one late return, the penalty may be:
- 5% of the deficiency in your tax account for the taxation year at the return due date
- plus an additional 1% for each full month the return is late, up to a maximum of 12 months
Repeated late returns
If you file two late returns within four taxation years, the penalty for the second late return may be:
- 10% of the deficiency in your tax account for the taxation year at the return due date
- plus 2% for each full month the return is late, up to a maximum of 20 months
Request a written interpretation
To request a written interpretation on a specific situation not addressed on this page, send your request in writing to:
- email: Advisory Services
- mail: Ministry of Finance, Advisory Services, 33 King Street West, 3rd Floor, Oshawa ON L1H 8H5
Forms and publications
Forms
- Authorizing or Cancelling a Representative
- Direct Deposit Request / Direct Deposit Authorization
- Notice of Revocation of Waiver of Time Limit for Issuing Assessments/Reassessments
- Ontario CT Schedule 24 First-time Filer after Incorporation, Amalgamation, or Winding-up of a Subsidiary into a Parent
- Ontario CT Schedule 44 Non-Arm’s Length Transactions
- Waiver of Time Limit for Issuing Assessments/Reassessments
Publications