Taxable Employee Benefits Guide

Common Taxable Benefits

Company Car / Vehicle

• Standby charge: 2% of vehicle cost per month (or 2/3 of lease)
• Operating benefit: 33¢/km personal use OR 50% of standby
• Reduced if mostly business use
• Keep detailed log of business vs personal

Employer-Paid Housing

• Full FMV of accommodation is taxable
• Exception for remote work locations
• May include utilities paid

Group Insurance Premiums

• Life insurance: Employer portion taxable
• Disability (STD/LTD): If employer pays, benefits are taxable
• Extended health: Generally NOT taxable
• Dental: Generally NOT taxable

Stock Options

• Taxable when exercised (usually)
• 50% deduction may apply
• CCPCs have deferral rules
• See our separate stock options guide

Interest-Free Loans

• Taxable benefit = prescribed rate minus rate paid
• Calculate quarterly
• Home purchase loans have special rules
• 2024 prescribed rate varies

Tuition / Professional Development

• Primarily employer benefit: Generally not taxable
• Primarily employee benefit: Taxable
• Job-related training usually not taxable
• General interest courses may be taxable

Non-Taxable Benefits

Employer Contributions to:

• Registered Pension Plans (RPP)
• Group RRSPs (deferred taxation)
• Deferred profit sharing plans

Health & Wellness

• Private health services plan premiums
• Dental plan premiums
• Counselling services (certain types)
• Fitness membership (up to $500/year)

Working Conditions

• Uniforms and special clothing
• Tools and equipment for work
• Reasonable overtime meals
• Business travel reimbursement

Special Exemptions

• Discounts on employer merchandise (reasonable)
• Social events (up to $150/event, max 6/year)
• Non-cash gifts (up to $500/year)
• Awards for service (up to $500)

How Benefits Appear on T4

Box 14 – Employment Income

Includes all taxable benefits added to regular pay

Specific Benefit Boxes

• Box 34: Personal use of vehicle
• Box 36: Interest on loans
• Box 38: Stock option benefits
• Box 40: Other taxable benefits

Automobile Benefits Detail

Standby Charge

If company provides a vehicle:

• 2% × original cost × months available
• Or 2/3 × lease cost × months
• Reduced if personal use under 1,667 km/month
• And used primarily (50%+) for business

Operating Expense Benefit

• 33¢/km for personal kilometres
• Or elect 50% of standby charge (if primarily business)
• Includes gas, insurance, maintenance

Parking Benefits

• Regular workplace parking: Taxable
• Exception: Free parking available to public
• Exception: Scramble parking (first-come basis)
• Exception: Disabled employee parking

Gifts and Awards

Non-Cash Gifts

• Up to $500/year total not taxable
• Cash and near-cash always taxable
• Gift cards = cash
• Points that convert to cash = cash

Long Service Awards

• Non-cash up to $500 not taxable
• Minimum 5 years of service
• Not given within past 5 years

Remote Work Benefits

Equipment Provided

• Computer for work: Not taxable
• Office furniture: Generally not taxable
• Internet reimbursement: Not taxable if for work

Home Office Allowance

• Reasonable allowance: Not taxable
• Must be based on actual expenses
• Flat rate may be taxable

Professional Dues

• Required for employment: Not taxable if paid by employer
• May be deductible if you pay
• Union dues: Deductible

Cell Phone / Internet

• Primary business use: Not taxable
• Personal use: Taxable
• Reasonable personal use often ignored
• Employer policies vary

Planning Considerations

Review Your T4

• Understand what benefits are included
• Verify calculations are correct
• Ask payroll if unclear

Compare Cash vs Benefits

• Sometimes cash is better (can invest in TFSA)
• Sometimes benefit is better (no cash outlay)
• Consider the tax impact