The formula is simple to calculate tax. Here we have written an example of how to calculate tax.
Amount of the premium x (Tax rate/100) = Amount of the tax
Amount of the premium + Amount of the tax = Amount with tax
As an example, let us assume a life or health insurance premium (8% tax) of $600
600$ x (8/100) = 48$
600$ + 48$ = 648$
Insurance premium tax rate will depend on the type of insurance you will take. Since 2010, you don’t have to pay HST (Ontario Harmonized Sales Tax) taxes on any type of insurance in Ontario. Here you have to remember that car insurance is exempt from RST.
Since July 1, 2010, the 8% Ontario sales tax and the 5% GST were merged into a single 13% value added sales tax.
Consumers now have to pay 13% HST on all goods and services on which they previously paid 5% GST, except for several items which were previously RST exempt and are not subject to the provincial portion of the HST.
Also Check: Insurance premium tax 2021