Is an employer's group RRSP match subject to the HE Levy?
Yes. Bulletin HE 002 includes contributions to an employee's RRSP in remuneration subject to the levy.
Group Retirement · Manitoba HE Levy
Does Manitoba's HE Levy apply to a group RRSP match?
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Yes. Manitoba's Health and Post Secondary Education Tax Levy, the province's payroll tax, defines remuneration subject to the levy to include "contributions to an employee's RRSP", and its list of benefits not subject to the levy names the deferred profit sharing plan (Manitoba Finance, Bulletin HE 002, Remuneration). An employer's group RRSP match therefore sits inside the levy base while the same dollars contributed through a DPSP sit outside it. What that difference costs depends on which of Manitoba's three payroll bands you are in, and in the middle band the levy on a match runs at double the rate most summaries quote.
$2.5M
current Manitoba HE Levy exemption
4.3%
notch rate on payroll above the exemption
$3,440
illustrative levy on an $80,000 match in the notch band
$9,869
illustrative levy on a $229,500 match in the notch band
Included
Employer RRSP contributions and group TFSA contributions
Excluded
DPSP and RPP contributions
Source: Manitoba Finance, Bulletin HE 002, Remuneration, revised January 2023
Who we build for
20 to 1,000+ people
Setup timeline
8 to 10 weeks
typical for a 20 to 200 person setup; larger plans take longer
The three bands, as Manitoba states them
From the province's current rate table: total yearly payroll of $2.5 million or less is exempt. Between $2.5 million and $5 million, the levy is "4.3% on the amount in excess of $2.5 Million", which the province itself labels the notch provision. Over $5 million, it is "2.15% of the total payroll", and the province adds a warning in brackets worth repeating verbatim: the $2.5 million "is not a deduction". Past $5 million the levy applies from the first payroll dollar.
One freshness note, because stale numbers are everywhere on this topic: the exemption rose from $2.25 million to $2.5 million effective January 1, 2026 (Bulletin HE 001, revised January 2026). A summary quoting $2.25 million is a year out of date.
The notch doubles what a match costs
Inside the notch band the levy takes 4.3 cents of every additional remuneration dollar, twice the 2.15 percent basic rate. That makes the middle band the most expensive place to add match dollars.
Illustratively: an employer in the notch band adds an $80,000 annual group RRSP match. The levy on those dollars is 4.3 percent, $3,440 a year. The same employer above $5 million of payroll would pay the 2.15 percent basic rate on them, $1,720. The same dollars through employer DPSP contributions, in any band: zero, because the DPSP sits on the excluded list. At the scale of our standard worked example, a $229,500 match in the notch band carries about $9,869 of levy, the figure our plan-cost calculator shows on its Manitoba line. Every figure here is illustrative, and your payroll sets your number.
Two traps the bulletins state plainly
First, the one-letter trap: an employee profit sharing plan is not a deferred profit sharing plan. The EPSP sits on the taxable side; only the DPSP is excluded. A proposal that says "profit sharing" without the D is proposing a taxable structure.
Second, the group TFSA: Bulletin HE 002 lists employer contributions to a group Tax-Free Savings Account, including employer-paid administration fees, as taxable remuneration. Employers who add a TFSA rider to a retirement program expecting DPSP-style treatment discover otherwise at filing time.
Also worth knowing from the same bulletin: registered pension plan contributions are excluded, associated corporations share one $2.5 million exemption across the group, and employers without a permanent establishment in Manitoba for the full year prorate the exemption.
Where this fits in plan design
Levy treatment is one input into the group RRSP and DPSP split, next to vesting (employer DPSP dollars can vest over up to 24 months), owner eligibility (10-percent-plus shareholders cannot join the DPSP side), and what the plan is meant to do for retention. We design Manitoba plans with the levy line priced from the start and review annually. The Winnipeg picture, including who we serve there and how: group RRSP setup for Winnipeg employers. The same wedge in other provinces: Ontario EHT and group RRSP matching and BC EHT and group RRSP matching. The federal side of match taxation: the employer tax-advantages guide.
Manitoba HE Levy questions employers ask
Are employer DPSP contributions subject to the levy?
No. The deferred profit sharing plan appears in the bulletin's list of benefits not subject to the levy; registered pension plan contributions are excluded as well.
What is the current exemption?
$2.5 million of total yearly payroll, effective January 1, 2026, up from $2.25 million. Between $2.5 million and $5 million the levy is 4.3 percent of the amount above $2.5 million; above $5 million it is 2.15 percent of total payroll with no exemption deducted.
Why is the match more expensive in the middle band?
The notch provision applies 4.3 percent to every dollar above the exemption, so each match dollar between $2.5 million and $5 million of payroll carries double the basic rate.
Does a group TFSA get DPSP treatment?
No. Employer contributions to a group TFSA, including employer-paid administration fees, are taxable remuneration under Bulletin HE 002.
We are under $2.5 million of payroll. Does any of this matter yet?
Not as levy dollars today. It starts to matter as payroll approaches the exemption, and the notch makes the design choice worth pricing before you cross it rather than after.
Prepared by RiskX
Written by Jarod Smith, CEO, RiskX Insurance Brokers Inc. Reviewed by Gordon Smith, RiskX Insurance Brokers Inc.
Published: August 24, 2026. Updated: August 24, 2026.
Group retirement