Incorporated Professionals and Business Owners: Every dollar you spend on health and dental costs you much more than it needs to (more than double for high-income earners).
If you own an incorporated business in Canada, there is a simple, CRA-approved tool that converts personal health and dental costs into business expenses. It costs nothing to set up. Nothing to maintain. You only pay when you use it.
It is called a Health Spending Account.
A Health Spending Account (HSA) is a non-taxable supplement and/or alternative to a traditional group or individual health and dental plan.
What health and dental actually costs you today:
When you pay a health or dental bill out of pocket, you pay it with after-tax personal dollars. To get those dollars, your business had to earn significantly more. Here is what that looks like using Nova Scotia marginal tax rates.
| Expense | Without HSA | With HSA | You Save |
|---|---|---|---|
| $1,000 (e.g. glasses) | ~$1,549 pre-tax income needed | $1,114 business expense | ~$435 |
| $5,000 (e.g. braces) | ~$7,745 pre-tax income needed | $5,570 business expense | ~$2,175 |
| $10,000 (e.g. dental work) | ~$15,490 pre-tax income needed | $11,140 business expense | ~$4,350 |
| Expense | Without HSA | With HSA | You Save |
|---|---|---|---|
| $1,000 (e.g. glasses) | ~$1,770 pre-tax income needed | $1,114 business expense | ~$656 |
| $5,000 (e.g. braces) | ~$8,850 pre-tax income needed | $5,570 business expense | ~$3,280 |
| $10,000 (e.g. dental work) | ~$17,700 pre-tax income needed | $11,140 business expense | ~$6,560 |
| Expense | Without HSA | With HSA | You Save |
|---|---|---|---|
| $1,000 (e.g. glasses) | ~$1,887 pre-tax income needed | $1,114 business expense | ~$773 |
| $5,000 (e.g. braces) | ~$9,434 pre-tax income needed | $5,570 business expense | ~$3,864 |
| $10,000 (e.g. dental work) | ~$18,868 pre-tax income needed | $11,140 business expense | ~$7,728 |
| Expense | Without HSA | With HSA | You Save |
|---|---|---|---|
| $1,000 (e.g. glasses) | ~$2,174 pre-tax income needed | $1,114 business expense | ~$1,060 |
| $5,000 (e.g. braces) | ~$10,870 pre-tax income needed | $5,570 business expense | ~$5,300 |
| $10,000 (e.g. dental work) | ~$21,739 pre-tax income needed | $11,140 business expense | ~$10,599 |
* HSA cost = expense + 10% admin fee + 14% HST on the admin fee only. Nova Scotia marginal tax rates used. Results are estimates and will vary based on individual tax situation.
How it works:
You pay the health or dental bill personally, as you normally would.
You submit the claim through your HSA.
Your corporation reimburses you. That reimbursement is a business expense.
The only cost is a 10% admin fee plus 14% HST on that admin fee, paid when you make a claim.
You pocket the difference.
No premiums. No monthly fees. No cost if you never use it.
Who qualifies?
Most incorporated Canadian business owners with active business income qualify. The HSA must be offered consistently to employees within the same class. If you have staff, we structure it properly so every class is treated fairly under CRA rules.
If you are unsure whether your situation qualifies, that is exactly what the 20-minute call is for.
Solo owner or growing team, it works either way
Just you (and family): An HSA replaces or integrates with expensive, rigid individual health and dental plans (especially dental). You control the spending limit. You only pay when you use it.
You and a team: An HSA can sit alongside your existing group benefits plan, handling the high-ticket items like orthodontics and vision that traditional plans cap or exclude. Or it can replace a group plan entirely. Different employee classes may have different limits.
The honest fine print
No setup cost. No monthly fees.
You pay a 10% admin fee + 14% HST on that fee when a claim is processed.
All eligible expenses come directly from the CRA list (linked below).
No pre-funding required. Pay as claims come in.
Claim details are always private from the employer.
Most business owners who have this conversation end up finding two or three other areas where they are quietly losing money. The HSA is often just the start.
Book a 20-minute call - No pitch. No pressure. Just clarity on whether this fits your situation.
A video detailing our HSA user experience:
