Group tax-free savings account

A group TFSA is a type of savings plan. Contributions aren’t tax-deductible, but the income they generate (including capital gains) is tax-free, even when withdrawn.

Advantages

For employers

  • Often offered in combination with a retirement savings plan
  • Easy to manage
  • Great addition to employee benefit package

For employees

  • Offers flexibility for short-and medium-term savings goals
  • TFSA contributions don’t count toward RRSP contribution room
  • Money can be withdrawn at any time for any reason, tax-free

Details

Employer contributions

  • No minimum contribution required

Employee contributions

  • There are annual contribution limits, but they’re cumulative:
    • 2009 to 2012: $5,000
    • 2013 and 2014: $5,500
    • 2015: $1,000
    • 2016 and 2017: $5,500
  • Can be made via regular payroll deductions or as lump-sum deposits

Administration

  • Plan needs to be registered with Canada Revenue Agency
  • No regulatory fees
  • No annual meeting required
  • Subject to payroll taxes, since contributions count as salary

Investments

  • Employees responsible for their investment choice
  • Investment policy not required

This text is for information purposes only. Refer to the policy for all conditions, exclusions and restrictions.