Updated for 2025 · Tax treatment · EI coordination
Short-term disability (STD) insurance replaces a portion of your income when you're unable to work due to illness or injury for a period of weeks or months. It is one of the most frequently used employee benefits and one that many workers misunderstand until they need it. This guide covers how STD works, how benefits are taxed, and how to navigate a claim.
STD coverage provides income replacement — typically 60-70% of your weekly earnings — during the early phase of a disability. Most plans cover absences from 1-2 weeks up to 13-26 weeks. After STD benefits are exhausted, long-term disability (LTD) coverage typically takes over.
| Feature | Typical Range |
|---|---|
| Benefit amount | 60-70% of weekly earnings |
| Elimination period (waiting) | 1-14 days (often 7 days for illness; day 1 for accident) |
| Maximum benefit period | 13-26 weeks |
| Maximum weekly benefit | Varies; often $3,000-$5,000/week for professionals |
| Definition of disability | Usually "unable to perform own occupation" |
The taxability of STD benefits depends entirely on who pays the premium:
Most STD plans have an elimination period before benefits begin. During this period, many employees use:
The elimination period for accidents is often day 1 (or day 4 in some plans), while illness typically requires 5-7 calendar days before benefits start.
Employment Insurance provides up to 15 weeks of sickness benefits at 55% of insured earnings (maximum $668/week in 2025). If you have group STD coverage, your plan typically requires you to apply for EI and coordinates benefits — meaning the combined total does not exceed your pre-disability earnings.
| Feature | Group STD | EI Sickness |
|---|---|---|
| Benefit amount | 60-70% of earnings | 55% of insured earnings (max $668/week) |
| Maximum duration | 13-26 weeks | 15 weeks |
| Waiting period | 1-14 days | 1-week waiting period |
| Tax treatment | Taxable if employer-paid premium | Taxable income |
| Medical evidence | Required; functional abilities form | Medical certificate required |
To qualify for STD benefits, you typically must:
Insurers and employers are required to accommodate your return to work. This may include:
Cooperating with return-to-work planning is a plan requirement; refusing reasonable accommodations can result in benefit termination.
After your STD benefits are exhausted (typically at 26 weeks), you may qualify for long-term disability. The LTD plan usually has a stricter definition of disability and covers you until recovery, age 65, or the plan's maximum benefit period. See our Long-Term Disability Guide.
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Get KOHO Free — Use Code 45ET55JSYAYes. Most STD plans cover psychological conditions such as depression, anxiety, and burnout when supported by medical evidence from a licensed physician or mental health professional. Mental health is now one of the leading causes of STD claims in Canada.
You cannot be fired because you are on disability. However, employers can terminate for legitimate business reasons unrelated to your disability (e.g., a layoff). Human rights protections require employers to accommodate disabilities to the point of undue hardship.
You have the right to appeal a denial. Review the insurer's internal appeal process first. If unsuccessful, you can file a complaint with your provincial insurance regulator, seek legal advice, or pursue arbitration. Many denied claims are overturned on appeal with stronger medical documentation.
This guide is for informational purposes. Consult a licensed insurance or legal professional for advice specific to your situation.