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Taxable benefits
| Posted on 21 October, 2019 at 22:15 |
A gift or award that you give an employee is a taxable benefit from employment, whether it is cash, near-cash, or non-cash. However, there is an administrative policy that exempts non-cash gifts and awards in some cases.
Cash and near-cash gifts or awards are always a taxable benefit for the employee. A near-cash item is one that functions as cash, such as a gift certificate or gift card, or an item that can be easily converted to cash, such as gold nuggets, securities, or stocks.
A benefit includes an allowance or a reimbursement of an employee's personal expense or to a person who does not deal at arm's length with the employee.
Vouchers and event tickets are generally considered non cash gifts and awards ( except movie ticket which is considered a near cash gift or award)
An award for an employment-related accomplishment is deferent from performance-related reasons, the latter is considered as reward and taxable benefit, therefore it's FMV(GST/HST apply) should be included in the employee's income.
in general words, the non-cash gift or award fall in the policy and not greater than $500 will be exempt, otherwise should be included in the employee's income as taxable benefit.
for more information please check " Employer's guide-Taxable Benefits and Allowance" go to https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4130.html.
If you provide benefits to your employees, you always have to go through the same steps. If a step does not apply to you, skip it and go on to the next step:
1.determine if the benefit is taxable
2.calculate the value of the benefit
3.calculate payroll deductions
4.file an information return
these are outline as employer's responsibilities.
Categories: Payroll
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