Taxable Benefits

While you might consider some of the benefits that you get from working at a business to be ‘perks of the job’ they may actually be taxable benefits. Generally speaking a taxable benefit is a benefit that the employer provides to the employee in which the employees sees a personal gain or benefit. The CRA defines a taxable benefit as follows:

"Your employee is considered to have received a benefit if you pay or provide something that is personal in nature:
  • to him or her; or
  • to a person who does not deal at arm's length with the employee (such as the employee's spouse, child or sibling)."

If you provide anything that the CRA considers to be a taxable benefit, you will likely be required to report the value of the benefit in the employee’s income. Every situation is different; however a taxable benefit is often determined by the type and reason for receiving the benefit. Benefits may be received in the form of cash, or in non-cash items (such as parking spots, personal fuel or cell phone use, or even gifts).

Every situation is different, so it can be difficult and sometimes arbitrary to determine whether a benefit is considered taxable. The CRA has a an excellent guide as to what is and is not considered a taxable benefit.

RESOURCES:
CRA Website – Other Benefits