Wellness Spending Accounts (WSAs) are an effective way for employers to promote employee wellness, attract and retain top talent, and improve overall workplace satisfaction while controlling costs. In this article, we'll cover what a WSA is, how they work, and why they are so effective for Canadian businesses.
What is a Wellness Spending Account (WSA)?
A Wellness Spending Account (WSA) is an employer-funded program that provides employees with a taxable allowance for wellness-related expenses.
WSAs aim to promote employee wellness by helping them cover expenses that support their physical, mental, and emotional health. WSAs are very flexible, and employees decide what to spend their allowance on. Whether they want to invest in art classes, new golf clubs, or continuing education courses, they can use their WSA to cover it.
How does a Wellness Spending Account work?
A WSA is set up by the employer, who defines an annual spending limit for each employee (e.g., $400 per year). This lets you tailor the program to your organization's budget and unique needs.
After a WSA is set up, employees can pay for anything on the eligible expense list and submit a claim through their WSA provider. The WSA provider processes the claim and reimburses the employee for 100% of the expense directly to their personal bank account, up to their annual WSA limit. WSA funds are a taxable benefit, meaning employees are taxed on what they spend from the account.
WSAs offer employers total cost-control. You set the annual limits for your employees, so you always know the maximum amount you'll be paying for the program each year. You'll only pay for what your employees claim, meaning any remaining funds are returned to the business.
What is eligible through a Wellness Spending Account?
Wellness Spending Accounts cover expenses related to nutrition, fitness, professional/personal development, personal/family interest, and mental health. Eligible expenses are determined by the WSA provider, so it's important to check your provider's eligibility list before submitting a claim.
Below are some common expenses that are eligible through a WSA:
- Vitamins and supplements
- Sports equipment
- Gym memberships
- Fitness classes
- Continuing education
- Art classes
- Music lessons
- and more!
See a full list of eligible and ineligible expenses through an Olympia Benefits WSA here.
Who are Wellness Spending Accounts for?
WSA eligibility varies from provider to provider, but typically any incorporated business with employees can sign up. Olympia Benefits offers a WSA as an optional add-on for any Group Health Spending Account (HSA) plan.
Are Wellness Spending Accounts worth it?
Investing in employee wellness pays off. WSAs deliver a strong return on investment by improving employee wellbeing, productivity, retention, and morale, and the data supports this:
WSAs generate measurable returns for employers. In a global survey of over 1,500 CEOs and business owners, more than 80% reported positive returns from their wellness programs, and one in three achieved returns exceeding 100% (Source: Wellhub, Return on Wellbeing Report 2025).
WSAs improve employee productivity. 97% of employers report increased productivity after implementing wellness programs (Source: Wellhub, Return on Wellbeing Report 2025).
WSAs reduce workplace absenteeism. 67% of organizations report lower absenteeism after adopting wellness programs (Source: Wellhub, Return on Wellbeing Report 2025).
WSAs improve employee retention. 73% of organizations report improved retention tied to their wellness programs (Source: Wellhub, Return on Wellbeing Report 2025).
How do Wellness Spending Accounts improve overall employee wellbeing?
WSAs improve employee wellbeing by supporting physical health, mental health, financial stability, and work-life balance. It provides employees with flexible funding to access wellness resources that match their individual needs.
Who are the top Wellness Spending Account (WSA) providers in Canada?
The best Wellness Spending Account (WSA) providers in Canada offer a balance of flexibility, simplicity, and a positive employee experience. When evaluating your options, focus on these three key factors:
- Flexibility: look for a WSA provider that has a range of eligible expenses that fits your employees' needs and your unique company culture
- Simplicity: offering a WSA shouldn't be onerous to you or your employees. Look for a provider with a straightforward, online setup and claims process.
- User experience: look for a provider with quick turnaround on claims (2-3 business days is a good rule of thumb) so that your employees aren't waiting weeks for reimbursement. The ability to submit claims online or through an app also contributes to a great user experience for your employees.
Looking for a flexible and easy-to-manage WSA?
Olympia Benefits offers Wellness Spending Accounts as an add-on to any Group Health Spending Account (HSA) plan. Our WSAs are:
- Flexible: Browse our wide range of eligible wellness expenses
- Easy to set up: Fully online, with claims submitted online or in-app
- Fast: Claims are reimbursed in just 2-3 business days
FAQs
Are WSAs taxable?
Yes, WSA funds are a taxable benefit. Anything that employees claim through their WSAs are treated as income and taxed.
Are Health Spending Accounts and Wellness Spending Accounts the same?
Health Spending Accounts (HSAs) and Wellness Spending Accounts (WSAs) are not the same. HSAs are a tax-free benefit, and cover eligible medical expenses determined by the CRA, such as prescription drugs, dental care, and vision care. WSAs are a taxable benefit, and cover wellness-related expenses such as gym memberships, sports equipment and continuing education. See here for more on the difference between the HSA and the WSA.
How much does a Wellness Spending Account cost?
The cost of a Wellness Spending Account depends on how you customize your plan. Your maximum annual cost will be the total of your employees' annual spending allowances, plus any admin and setup fees that the provider charges. However, unused portions of your employees' allowances will be returned to you.
How much does an Olympia Benefits Wellness Spending Account cost?
The Olympia Benefits Wellness Spending Account (WSA) costs $99/year plus an 8% administration fee on claims.
How are employees reimbursed for Wellness Spending Account claims?
Employees pay for their expenses out-of-pocket and then make a claim through the WSA provider. If the expense is eligible, then the provider debits the employer funding account and reimburses the employee's personal bank account. The expensed amount is added onto the employee’s total taxable income.
How do Wellness Spending Account classifications work?
Employees are assigned limits on how much they can spend through their WSA each year. The limits are separated through classifications, which are determined by a factor of the employer's choice, such as job title or years of experience. Employers also determine a monthly amount to contribute to the funding account within the plan. This ensures employees are reimbursed in a timely manner if they do claim.
Is a Wellness Spending Account the same as a Lifestyle Spending Account?
Yes, a Wellness Spending Account (WSA) may also be referred to as a Lifestyle Spending Account (LSA), a Personal Spending Account (PSA), or a Health and Wellness Plan (HWP).
Disclaimer: This content is provided for general informational purposes only and does not constitute financial, tax, legal, insurance, or medical advice. Olympia Benefits Inc. makes no representations or warranties, express or implied, regarding the completeness, accuracy, reliability, and suitability of the information contained herein. While reasonable efforts are made to ensure the information is current, the applicable laws, regulations, guidelines, and administrative practices may change from time to time, and may also vary based on individual circumstances. Readers should conduct their own research prior to opening a Wellness Spending Account.
