TAX PLANNING FROM THE KNOWLEDGE BUREAU
By Evelyn Jacks
A few weeks ago, the financial news of the day involved a controversy about
the taxation of employee benefits. The Canada Revenue Agency (CRA) was
enforcing its interpretation of the law in relation to the taxation of the
benefit of receiving employee discounts at work. After a political outcry,
CRA backed down, leaving several question marks.
That’s regrettable because tax law must be certain – up front – in order
for employers to properly fill out T4 slips and communicate the net
after-tax value of employee remuneration. It’s not possible to try to
anticipate how CRA is going to interpret a law afterwards, and it’s unfair
for employees to face unintended consequences in an audit many years later.
Based on where the law stands today, here’s a list of a dozen and a half
taxable and tax-free benefits to consider in determining compensation for
employees for 2017, excerpted from my book
Family Tax Essentials. Business owners should discuss these and other perks of employment with
their tax and bookkeeping specialists as part of their year-end planning
Note: If the following amounts include GST/HST, employees who are allowed
to claim employment expenses may be able to claim a rebate on Line 457 by
filing form GST370. If you receive this rebate, claim it as income in the
following tax year on Line 104.
* Personal use of employer’s vehicle.
* Gifts in cash or those that exceed $500
* Value of holidays, prizes, and awards
* Merchandise discounts – below cost.
* Premiums for a provincial health or hospital plan.
* Tuition paid for courses for personal benefits.
* Interest-free and low-interest loans.
* Group sickness, accident, or life plans.
* Gains and income under employee stock-option plans.
* Recreational facilities, including social or athletic club memberships.
* Non-cash gifts under $500; $500 or more for birthdays, anniversaries.
Annual $1000 total.
* Employee counselling services for health, retirement or re-employment.
* Merchandise discounts – above cost.
* Premiums for a private health plan or lump-sum wage-loss replacement
* Tuition paid for courses for the employer’s benefit.
* Certain moving expenses if required by the employer.
* Employer’s required contribution to provincial health and medical plans.
* Employer-paid costs of attendant for disabled employees or to cover
away-from-home education due to work in remote worksites.
Evelyn Jacks is the founder and President of Knowledge Bureau. This
originally appeared in the
Knowledge Bureau Report, © 2017 The Knowledge Bureau, Inc. Reprinted with permission. All
rights reserved. Follow Evelyn Jacks on Twitter
@EvelynJacks. Visit her blog at www.evelynjacks.com.
Her latest book,
Family Tax Essentials, is now available.
Notes and Disclaimer
©2017 by Fund Library. All rights reserved.
The foregoing is for general information purposes only and is the opinion
of the writer. No guarantee of investment performance is made or implied.
It is not intended to provide specific personalized advice including,
without limitation, investment, financial, legal, accounting or tax advice.