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The Charter of the French language and its regulations govern the consultation of English-language content.

Death Benefits

A death benefit is an amount that is paid to the heirs of a deceased employee, in recognition of services rendered by the employee. Such a benefit may be an amount refunded for sick leave accumulated but not used before the employee's death.

Source deductions of income tax

You must make a source deduction of income tax on the taxable portion of a death benefit only if the benefit is paid in the year of death or the following year. The taxable portion of a death benefit corresponds to:

  • the amount of the benefit;
  • minus, where applicable, a maximum exemption of $10,000.

You must use the rates applicable to single payments, that is:

  • 14% if the taxable portion of the death benefit is $5,000 or less; or 
  • 19% if the taxable portion of the death benefit is greater than $5,000. 

The beneficiary or beneficiaries of a death benefit will generally be entitled to the exemption when they file their income tax return. 

Note

For other amounts paid after an employee's death, see Deceased Employee.

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