Many employers provide extras or “perks” to their employees. This can include a wide range of things such as free coffee or snacks, parties at holiday time, gifts to celebrate an employee’s birthday or new baby, health club memberships, awards for outstanding service, and free parking. It is often these “perks” that make tough days tolerable and employees happier. But would employees enjoy these perks as much if they knew they had to pay tax on them? The government has recently taken a keen interest in the issue of employee perks and benefits, and considers some of them taxable.
What makes certain employee benefits taxable? And which ones are tax-exempt? How does the CRA determine the value of a particular benefit? This paper provides answers to these questions and delves into the tax implications of some common workplace perks, including employer-provided parking, employer contributions to employee insurance plans, employer-provided cellphone plans and deduction of employee home office expenses. In addition, tax issues surrounding business travel and overseas or out-of-province employees are also discussed.