Employment – Taxable benefits (Taxation)

Question 1

Employment – Taxable benefits (Taxation)

Answer 1

• Board and lodging (unless at remote location)
• Most rent-free and low-rent housing
• Trips of a non-business nature
• Gifts greater than $500 (that are not cash or near-cash)
• Cash and near-cash gifts
• Cost of tools where employee is not required to have tools to work
• Forgiveness of debt
• Employer-paid education costs when primarily for the benefit of employee

Reference: ITA 6(1), CRA’s Employers’ Guide – Taxable Benefits and Allowance (publication T4130), chapter 3

Question 2

Employment – Non-taxable benefits (Taxation)

Answer 2

• Uniforms and special clothing required to be worn
• Transportation to job site
• Moving expenses reimbursed, excluding housing loss reimbursement
• Recreational facilities at place of work
• Premiums paid under private health services plans
• Professional membership fees when primarily for benefit of the employer

Reference: ITA 6(1), CRA’s Employers’ Guide – Taxable Benefits and Allowance (publication T4130), chapter 3

Question 3

Employer paid automobile expenses – Taxable benefit (Taxation)

Answer 3

• A taxable benefit arises when an employee is given something that is personal in nature or if something that is personal in nature is paid for by the company
• A benefit may include an allowance or a reimbursement of an employee’s personal expense (e.g. personal fuel is reimbursed)
• The value of the benefit is generally its FMV
• If an employee is provided with a taxable benefit, the amount must be included in their income

Reference: ITA 6