Employee benefits & allowances – what’s taxable? What’s not?

It is the time for employee recognition.

How do you celebrate the success of your employees and/or contract workers?

(And do they need to pay tax on them?)

Non-taxable benefits and allowances

Cash or near-cash benefits or allowances always considered taxable benefits. (Near-cash?   For employees, these need to be included as income when calculating statutory deductions.

Sometimes, you need to know if your benefits and allowances are taxable or non-taxable.   Want to know more about the rules for offering incentives to your employees in a successful business year?   We help find the payroll answers you need to run your business.

Are you an employee receiving benefits and allowances are taxable or non-taxable?  To learn more about what is your taxable income or need help on your taxes? Sign Up – GET HELP!  Filing Tax Returns

All expenses are business expenses incurred as a requirement of the employee conditions.

Non-taxable benefits

As a small supplier, you may provide benefits and allowances to your employees for health care, life insurance,

  • Private Health Insurance Plans short or long-term disability paid by employee
  • Employee Assistant Plans the payment for this plan is paid directly by employer
  • Tuition non-cashable course offer for career advancement administration/management

You may also give each employee a tax-free long-term service award (up to $500) once every five years.

Non-taxable allowances

As a small business are you giving your employees an allowances for,

  • Car Allowances limit to km drive for business purposes
  • Meals daily meals allowances ($17.00 per day)
  • Clothing a uniform, safety shoes.

The allowances can be included as an employees income for statutory deductions or taxable.

Note: these rules do not apply in the province of Quebec – different limits are in effect.

More about benefit or allowances?

If the profits of your company are consistent, you can offer incentives an employee for short or long-term service. If you are thinking about employee recognition – we can help.

More rules apply to benefits or allowances for all employees such as; health care, insurance plans, car allowance and loans than is covered in this article.  If you’d like more information about taxes and/or payroll – contact Ina for a free 30 minutes consultation.


Free Download