Canadian Dental Care Plan (CDCP): What Employers Need to Know

Have you heard the news? The Government of Canada established the Canadian Dental Care Plan (CDCP) in 2023. And new for the 2025 tax year, the Canada Revenue Agency (CRA) will no longer provide administrative relief for CDCP reporting. This means that all Canadian employers must now complete the dental benefits fields on T4 and T4A slips, even if no dental coverage was offered. Leaving these fields blank could result in the CRA rejecting your submission.

Here's what you need to know to stay compliant and how Payworks can help.

What is the Canadian Dental Care Plan (CDCP)?

The CDCP is a federal program designed to provide dental coverage to Canadians who:

• Do not have dental insurance through an employer or other source.
• Have an annual family income under $90,000.

Eligibility for the CDCP is determined using federal income tax returns, which is why accurate reporting on T4 and T4A slips is critical.

What Canadian employers need to know about CDCP reporting requirements

Employers must indicate whether an employee, former employee, or any of their family members had access to any form of dental insurance or dental coverage through the employer’s benefits as of December 31 of the reporting year. The CRA doesn’t require that employers report whether or not an individual made use of the dental coverage; they just need to report whether or not it was available.

• Since the 2023 tax year, there is an annual reporting requirement of employer-provided dental coverage.
• Reporting details include whether an employee, former employee, or a spouse of an employee was eligible as of December 31 to access dental insurance or dental coverage of any kind in the reporting tax year - whether they chose to access that care or not. Employers do not have to report whether an individual made use of the dental insurance or coverage.
• Similar to T4/T4A reporting, employers are subject to penalties for non-reporting or providing false or misleading information.

How to Report Dental Benefits on T4 and T4A Slips

T4 and T4A Boxes

• T4 Box 45 – Employer-offered dental benefits.
• T4A Box 015 – Payer-offered dental benefits.

CDCP Coding Options

• Code 1 – No access to dental coverage.
• Code 2 – Payee only has access.
• Code 3 – Payee, spouse, and dependents have access.
• Code 4 – Payee and spouse have access.
• Code 5 – Payee and dependents have access.

How Payworks can help you navigate CDCP

In the Payworks application, navigate to Payroll > Employee Setup > Employee Information and access the CDCP Indicator field in the Benefits Section on the Employee Tab. The dropdown list includes the codes listed above, plus a brief description of each option. What’s selected on this screen will populate on the employee’s tax form when you’re processing year-end. Make sure to add this step to your onboarding checklist when new employees join your organization going forward!

Payworks pro tip: When going through this process for the first time, ensure terminated employees are also selected, because CDCP reporting must be completed for former staff as well.

If you need to update multiple employees’ CDCP status, the Payworks application also has a CDCP Export report. Navigate to Reports > Year-End Reports and download the CDCP Export to review and edit the CDCP indicator columns. Save the file and import it into the system by navigating to Payroll > Employee Setup > Employee Imports. Don’t forget to click save!

Payworks pro tip: We recommend that if the CDCP codes are selected and saved prior to December 31 of the reporting year, field entries should be reviewed before tax forms are authorized to ensure the information is accurate.

When preparing tax forms, Payworks’ Year-End warnings are always a handy reminder of information in need of review prior to authorization, and now also indicate “No CDCP Indicator” for missing values in that field.

Throughout the year, and especially during year-end, our expert Service Team is there to answer your questions. Your dedicated Client Service Representative is only a click or call away!

Ensuring employees are paid accurately is a top priority for Canadian businesses, and we can help make it the least of their concerns. To learn more about our modern Payroll solution – which includes a complete year-end package with helpful checklists, videos, and tax form filing on our clients’ behalf – visit: https://www.payworks.ca/solutions/payroll.