What is a Lifestyle Spending Account?

Lifestyle Spending Accounts (LSA), also known as Wellness Spending Accounts (WSA) or Personal Spending Accounts (PSA), are a new flexible benefit option that employers employ to fund some of an employee’s wellness activities.

Unlike Health Spending Account (HSA), they are taxable as income to employees when they are spent. It acts as an innovative and cash-free way to reward employees. Similar to a bank account, employers deposit a set amount of money into an employee’s LSA. Employees can spend these funds on approved items or services to help with their work-life balance.

Because of this, plan costs for LSA’s are pre-determined for all employees. An LSA expense list can be customized to each organization’s needs and can include something for all sorts of lifestyles. This could take the form of childcare, pet care, yoga classes, nutrition counseling, life coaching, athletic wear, gym memberships, or something more specific to your industry. 

Areas Lifestyle Spending Accounts can cover

  • Wellness: nutritional supplements, spa treatments, weight loss programs, athletic therapy, family and marriage therapist, life coaching, health coaching, and midwives.
  • Fitness: gym membership, gym equipment, fitness classes, personal training, sports leagues and programs, Pilates, yoga, athletic clothing and shoes, season passes to ski-hills and golf clubs.
  • Travel & Entertainment: movie theater, meal delivery, team meals, music lessons, hotels, art lessons, concerts, and charitable experiences. 
  • Financial Services: student loan repayment, TFSA, financial planning, RRSP contribution, and RESP contribution. 
  • Transportation: public transit, taxi, gas, car share services, Uber and Lyft, bike share program, and parking.
  • Kids & Pets: pet insurance, babysitting, childcare services and programs, child tutoring services, pet grooming and pet food. 
  • Education: conferences, seminars, workshops, training, course fees, financial literacy, student loans, and language lessons 

In a competitive job market, Lifestyle Spending Accounts (LSA’s) can further differentiate your organization by showing you care about employees’ work-life balance. By catering your employees with an opportunity to take care of their living expenses with various choices available, you can stand to gain a healthier and more productive workforce.