Tax information for retired members
Your pension is taxable income. We will deduct federal and provincial income tax from your monthly pension payment.
Deductions from your monthly pension payment
Your pension is taxable income. This means we will deduct income tax from your gross monthly pension payment.
The net monthly pension payment you receive is calculated as follows:
- Your gross pension amount
- Minus: income taxes
- Minus (if applicable): monthly premiums for dental coverage
Extended health care coverage and BC's medical services plan (MSP) are not deducted as they are paid by WorkSafeBC.
We are required by law to deduct income tax from your monthly pension payments. If you completed both a federal TD1 and a provincial TD1 Personal Tax Credits Return form, the deduction is based on that information.
The amount of income tax we deduct from your monthly pension payment depends on where you live. Each province and country has its own tax rate. We use the tax rate for your province of residence, and if you live outside Canada, we use the tax rate for the country where you are living (as specified by the Canada Revenue Agency).
The amount we deduct from your monthly pension assumes that your pension is your only source of income. If you have other sources of income, such as benefits from Canada Pension Plan or old age security, this could put you into a higher tax bracket and result in more taxes owed.