As an employer, you may be eligible for a reduction in the employer EI premium rate that you use to calculate your share of the EI premiums if you offer income protection coverage, such as a wage loss replacement plan or other income maintenance plan, to your employees that reduce the EI benefits payable to an employee. Any travel by the employee between work locations is business related. Employers may offer various types of insurance plans to employees. For more information, see Guide T4044, Employment Expenses. personal use of an employer’s automobile. Employee counselling services are not taxable if they are for one of the following: This does not include amounts for using recreational or sporting facilities and club dues. Generally, there is no GST/HST and PST to include in the value of this benefit. If the back part or trunk of a van, pickup truck, or similar vehicle has been permanently altered and can no longer be used as a passenger vehicle, it is no longer considered an automobile as long as it is used primarily for business. For example, you can give an employee a non-cash long-service award worth $500 in the same year you give them other non-cash gifts and awards worth $500. Amounts you pay or reimburse your employee for medical travel or any associated cost under the terms of a private health services plan are not taxable benefits. By signing the form, you are only certifying that the employee met the conditions of employment and had to pay for the expenses under their employment contract. If you pay or reimburse your employee for a housing loss, the amount is a taxable benefit for the employee. A benefit includes an allowance or a reimbursement of an employee’s personal expense. We understand the administrative problems that can result from this. For more information, go to Payroll and click on "Important dates for payroll.". When you use the fixed rate calculation, you still have to keep records of this benefit. Do not deduct EI premiums. Usually, these points can be exchanged or cashed in for rewards (goods or services, including gift cards and certificates). This chart indicates whether you need to deduct Canada Pension Plan (CPP) and employment insurance (EI) from the taxable allowances and benefits discussed in this guide, and shows which codes you should use to report them on the employee's T4 slip. The GST/HST rates used in this guide are based on the current rates set under the Excise Tax Act and its regulations for taxable benefits provided in the 2020 tax year. If you provide subsidized lodging, or subsidized board and lodging, to an employee, the employee receives a taxable benefit. Deduct CPP contributions and EI premiums. In all other cases where a taxable benefit is received, the employer is required to withhold and remit an amount in respect of the taxable security option benefit (excluding any security option deduction) to the same extent as if the amount of the benefit had been paid as an employee bonus. CPP – When a non-cash or near-cash benefit is taxable, it is also pensionable. If your employee has a disability, the parking benefit is generally, There is no taxable benefit for your employee when, you provide parking to your employee for business purposes. They have to do so on the date their employment ends in the year, or by December 31, whichever is earlier. You may have been required by your employer to pay for your own employment expenses at work. You paid out the compensation in two payments: $30,000 in September 2019 and $35,000 in February 2020. Your first step is to determine whether the benefit you provide to your employee is taxable and has to be included in their employment income when the benefit is received or enjoyed. If your employee has multiple regular work locations and travels between home and several work locations during the day, only the trip from your employee's home to the first work location or, the trip from the last work location to home is personal driving. If this is the case, you should not report them on the employee's T4 slip. Select the "Q&A" icon. He drove 36,000 kilometres during the year, 12,000 kilometres of which were for personal use. In effect, the employer agrees to sell or issue shares to the employee for no cost. The value of the benefit is based on the FMV of the service, minus any amounts your employee reimburses you. The use of a recreational facility or club is a taxable benefit for an employee in any of the following situations: However, the use of a recreational facility or club does not result in a taxable benefit for an employee in any of the following situations: For more information, see Income Tax Folio S2-F3-C2, Benefits and Allowances Received from Employment. If the employee reimburses you for part of the automobiles operating expenses in the year or no later than 45 days after the end of the year, deduct the payment from the operating expense benefit that you calculate. If you provide free or discounted passes to a member of your employee's or retired employee's family, the fair market value (FMV) of the pass is a taxable benefit for the employee. 6 www.cra.gc.ca Guide T4001, Employers’ Guide – Payroll Deductions and Remittances. In these situations, the tickets are given to the employee for a business use. Identify the amount of the deduction by entering it in the "Other information" area under code 41 at the bottom of the employee's T4 slip. For more information about the non-cash benefits withholding policy, go to Chapter 1 – General information. A benefit or allowance can be paid to your employee in cash (such as a meal allowance) or provided to your employee in a manner other than cash (such as a parking space or a gift). Moving expenses that are considered non-taxable benefits are discussed in. In these situations, employees can ask to reduce their tax deductions on their remuneration by filling out and sending in a Form T1213, Request to Reduce Tax Deductions at Source, or a written request to any tax services office along with the following information: If you have a number of employees in the same situation, you can get a bulk waiver for the group. Employer Responsibilities Also see the Revenu Québec publication IN-203, General Information Concerning the QST and the GST/HST, available at Revenu Québec. The residence has to be for that employee or a person related to that employee. You can answer a series of questions on our Web site to help you determine if there is a taxable benefit.