If the company makes any payments to employees as a result of the short term disability, it must report payments as business taxable income, as if they were wages.

About short term disability taxable:

Regarding short term disability taxable, short disability is not a taxable benefit. It may result in a short term capital gain, it is not taxable income. Long-term disability will have tax exemption.

Can be claimed during year in which you become temporarily unable to work due to health or mental disability, or to care for a child or elderly family member.

Pros of short term disability taxable:

In short term disability taxable, the amount you can make before you start paying income tax will vary based on the province you reside in. Other types of disability, however, are exempt from tax.

- No employer contribution. - You are still paid the same normal amount as you were on your traditional employment base at the time of termination of policy.

Pros of short term disability taxable:

Short term disability taxable has no administrative costs – you’re no longer required usually to file a weekly Form W-2 and you can take reduced income option to help cover your tax obligations.

Cons of short term disability taxable:

-You must claim short term disability amount on your tax return -You can only have one section 12 SGT on your return -Maximum amount you can have on your return 

Short term disability taxable has tax breaks – your short term disability tax benefits are not taxed, which can lower your overall tax bill and provide you with a bit of extra money at tax time.