If you’re an incorporated professional in Canada — whether a consultant, doctor, lawyer, or small business owner — there’s a strong chance you’re overpaying in taxes without realizing it.
Here’s a real-world example:
A Toronto-based self-employed consultant was spending over $5,000 annually on dental, vision, and physiotherapy treatments for herself and her family. After setting up a Health Spending Account (HSA) through her corporation, she was able to reimburse these expenses tax-free — saving over $2,000 in taxes every single year.
Still using personal after-tax income for healthcare? That’s money you could be saving.
This guide breaks down exactly which medical expenses are eligible through an HSA in 2025, how to claim them legally, and why this strategy is one of the most tax-efficient tools available for incorporated professionals in Canada.
What Is an HSA and Why It Matters for Incorporated Professionals
A Health Spending Account (HSA) is a Canada Revenue Agency (CRA)-approved method that allows incorporated businesses to pay for health and dental expenses using corporate pre-tax dollars rather than personal after-tax income. Unlike traditional insurance, it’s flexible, cost-efficient, and tailored to your needs.
For incorporated professionals, this is more than just a perk—it’s a smart tax optimization strategy.
Why it’s especially relevant for:
- Consultants & Freelancers:
You operate as a one-person corporation and often pay for your own healthcare. An HSA lets you write off eligible expenses while avoiding the cost and complexity of group insurance. - Doctors, Dentists, Lawyers:
With high annual medical spending and incorporated practices, HSAs offer a direct way to reimburse out-of-pocket expenses tax-free—and deduct them at the corporate level. - Small Business Owners:
HSAs offer a compliant, scalable alternative to traditional insurance benefits, especially when paired with Wellness Spending Accounts.
Most importantly, CRA compliance is built in—so long as the HSA is set up properly and used for eligible expenses, you stay within the tax rules.
2025 List of Eligible HSA Expenses (Incorporated Business Edition)
A well-managed HSA can cover a wide range of healthcare costs—far beyond what traditional insurance offers. Below is a practical, CRA-compliant list specifically curated for incorporated professionals in Canada.
Common Eligible Expenses
| Category | Examples |
| Medical | Family doctor visits, specialist consultations, prescription medications |
| Dental | Cleanings, fillings, crowns, wisdom tooth removal, orthodontics |
| Vision | Eye exams, prescription glasses, contact lenses |
| Paramedical | Chiropractic care, physiotherapy, massage therapy (requires prescription) |
| Mental Health | Sessions with a registered psychologist, social worker, or psychotherapist (if registered and CRA-eligible) |
Overlooked Expenses for Incorporated Professionals
Many incorporated individuals miss out on reimbursing lesser-known but fully CRA-eligible expenses. Here are some that are especially relevant:
| Expense Type | Claimable | Notes |
| Laser eye surgery | ✅ Yes | Fully reimbursable as a medical expense |
| Fertility treatments | ✅ Yes | Includes IVF, IUI, and associated prescriptions |
| Private hospital rooms | ✅ Yes | Must be medically required; retain documentation |
| Travel costs for care | ✅ Partial | Mileage, meals, and accommodation if traveling 40+ km for treatment |
| Medical cannabis | ✅ Yes | Requires a prescription and must be purchased from licensed producers |
| Gluten-free products | ✅ Partial | Only if prescribed by a doctor for celiac disease and receipts are itemized |
How to Claim These Expenses Through Your Corporation
As an incorporated professional, claiming eligible HSA expenses is not only legal—but surprisingly easy when done correctly. Here’s a step-by-step guide to ensure every dollar spent on health is reimbursed in a CRA-compliant and tax-efficient way.
Step-by-Step HSA Claim Process for Incorporated Individuals
| Step | What to Do | Why It Matters |
| 1. Pay Out-of-Pocket | Use your personal funds to pay for an eligible health-related expense (e.g., dental visit). | The expense must be incurred personally to qualify for a non-taxable reimbursement. |
| 2. Submit a Claim | Log in to your HSA provider platform (e.g., Wellbytes), upload the receipt, and complete the brief form. | Digital submission streamlines recordkeeping and compliance. |
| 3. Claim Gets Processed | The HSA provider reviews and approves your claim based on CRA rules. | Ensures the expense is eligible and all documentation is in order. |
| 4. Reimbursement Issued | Your corporation pays the expense tax-free to you via the HSA provider. | Reimbursement is not considered income—100% tax-free benefit. |
| 5. Corporation Records It as a Business Expense | The corporation deducts the amount paid as a health benefit. | This reduces the corporation’s taxable income legally. |
With Wellbytes, This Process Takes < 5 Minutes
Wellbytes is designed for Canadian incorporated professionals who don’t have time to deal with paperwork or unclear tax rules.
✅ Quick claim uploads
✅ 100% digital and CRA-aligned
✅ Transparent dashboards for both the corporation and individual
“Before Wellbytes, I had no idea my corporation could legally cover my family’s $2,000 in dental bills each year—tax-free.”
— Ryan D., Toronto-based Consultant
CRA Guidelines You Should Know (2025 Edition)
Navigating CRA requirements is a crucial step to ensuring your HSA remains 100% tax-free and audit-proof. While Health Spending Accounts are fully legal, there are clear compliance rules you must follow as an incorporated professional in Canada.
🔍 Key CRA Rules to Understand
| Rule | Summary | What It Means for You |
| Employee Status | You must be a legitimate employee of your corporation. | Sole proprietors cannot use an HSA—only incorporated professionals. |
| Reasonable Benefit Limits | Reimbursements must be “reasonable” for your income and role. | Avoid unusually large annual claims that raise red flags. |
| Eligible Medical Expenses | Must align with the CRA’s Medical Expense Tax Credit list. | Not all wellness or cosmetic treatments apply. |
| Third-Party Administrator | Use a provider like Wellbytes to administer claims. | CRA prefers arm’s-length claim processing for compliance. |
2025 Update:
- No major structural changes in 2025, but the CRA updated eligible items list to clarify:
- Some mental health services now explicitly covered
- Cosmetic procedures still not eligible unless medically required
- Some mental health services now explicitly covered
Tips to Stay Fully CRA-Compliant
- Maintain all original receipts and medical documentation for 6 years
- Avoid reimbursing yourself directly from corporate bank accounts
- Always use a platform like Wellbytes to add transparency and documentation
- Do not include personal family members who are not employees unless allowed via family coverage provisions
📎 Visit CRA’s official HSA guidelines page →
Common Questions Incorporated Professionals Ask
HSA can feel unfamiliar at first—especially when you’re your own HR department. Below are answers to the top questions from lawyers, doctors, and consultants who’ve set up HSAs through their corporations.
Can I Cover My Spouse and Kids?
Yes—as long as your HSA provider supports family coverage, you can extend benefits to your spouse and dependents.
Pro Tip: This is a huge tax advantage vs. giving your spouse a taxable cash bonus to cover health costs.
Is Massage Therapy Covered?
If provided by a licensed Registered Massage Therapist (RMT) in Canada, and you receive a receipt—it’s eligible.
Must be prescribed in some provinces to qualify under CRA guidelines. Check with your provider or local rules.
What Documents Do I Need for Reimbursement?
You typically need:
- An official receipt with provider’s license number
- The date of service
- Name of the person receiving the service (employee or dependent)
- Method of payment
With Wellbytes, these documents are uploaded directly through your dashboard, and stored securely for CRA review if ever needed.
