UPDATE: Sask. PST Exemption for Life/Health Insurance has been reinstated. The Government of Saskatchewan reinstated the tax exemption for retroactively to Aug 1, 2017.
As of August 1, 2017, Saskatchewan has implemented a 6% Provincial Sales Tax (PST) to Insurance Premiums, which includes Employee Benefit Plans (including Administrative Services Only (ASO)/Self-Insured arrangements). It is applicable where the business or person holding the policy is a Saskatchewan resident. The PST is due at the time of sale, purchase, or renewal, (depending on payment arrangement, but usually monthly) on the total premium amount as specified in the contract of insurance.
There are a couple factors in determining when the tax applies for Group Benefits:
1) Who pays the premium, Employer or Employee?
2) Where is the place of employment?
3) Where does the employee reside?
Employer Paid premiums are only dependent on the place of employment. The residency of an employee has no bearing on employer paid premiums. If a company is paying premiums for an employee, and the employee’s place of employment is in Saskatchewan, then the tax would apply.
For Employee Paid premiums, the tax is dependent on both residency and place of employment. In this case, the employee is required to reside and work in Saskatchewan for the PST to apply.
The introduction of this 6% PST should not be confused with Insurance Premium Tax (3%/4% depending on the benefit), they are two separate taxes and both apply to employee benefits.
For more information about these changes, the following links will help:
Government of Saskatchewan Information Bulletin