*** Transcriber's Note: Please set your voice synthesizer to read most 
punctuation. Throughout this document, if you encounter the caret (^) sign, 
please enter the applicable information, if necessary. Areas outlined in red 
are indicated by three back-slashes (\\\) at the beginning and at the end. 
Three plus (+++) signs will indicate the start and the end of charts. ***

FRONT COVER

Canada Customs and Revenue Agency

T4130(E) Revision 2002

Employers' Guide

Taxable Benefits

2002-2003


PAGE 2

Is this guide for you?

Use this guide if you are an employer providing benefits or allowances to your 
employees such as:
- automobile benefits;
- housing, board, and lodging;
- housing and travel assistance in a prescribed zone;
- interest-free or low-interest loans;
- group term life insurance policies; or
- tuition fees.

The instructions in this guide mainly apply to employers. However, we also 
provide certain guidelines for trustees, administrators, corporate directors, 
and third-party payers providing benefits to employees of another employer.

Use this guide jointly with the following employers' guides:
- Payroll Deductions (Basic Information) (T4001)
- Filing the T4 Slip and Summary Form (RC4120)
- Filing the T4F Slip and Summary Form (RC4200)
- Deducting Income Tax on Pension and Other Income, and Filing the T4A Slip 
and Summary Form (RC4157).

Problem Resolution Program

We are always looking at ways to make it easier for you to file your 
information returns, deduct and send in your remittances, and resolve any 
problems you may have.

If you have a problem, you can call 1-800-959-5525 for service in English or 
1-800-959-7775 for service in French.

If, after this step, your problem still cannot be resolved through normal 
channels, you should get in touch with the Problem Resolution Program 
coordinator at your local tax services office. The numbers are listed in the 
government section of your telephone book.

You can also write to any tax services office.

Teletypewriter (TTY) users

If you use a teletypewriter, you can call our toll-free, bilingual enquiry 
service at 1-800-665-0354.

Your opinion counts!

We review this guide each year. If you have any comments or suggestions that 
would help us improve the information it contains, we would like to hear from 
you.

Please send your comments to:

Client Services Directorate
Canada Customs and Revenue Agency
Lancaster Road
Ottawa ON K1A 0L5

Do you need other publications?

Throughout this guide, we mention other publications that cover topics in more 
detail. To get any of these publications, including blank copies of T4 and T4A 
slips, you can:
- download them from our Web site at www.ccra.gc.ca/forms;
- complete the order form at www.ccra.gc.ca/orderforms; or
- call 1-800-959-2221.

Visually impaired persons can get this publication in braille or large print, 
or on audio cassette or computer diskette, by calling 1-800-267-1267 weekdays 
between 8:15 a.m. and 5:00 p.m. (Eastern Time).

This guide uses plain language to explain the most common tax situations. If 
you need more help after reading this guide, you can call our Business 
Enquiries line at 1-800-959-5525 for service in English, or at 1-800-959-7775 
for service in French.


PAGE 3

Table of Contents

What's New? page 4

Notice, page 4

Chapter 1 - Automobile Benefits and Allowances, page 4
1.1 Definitions, page 4
1.2 Automobile benefits, page 5
Work sheet - Calculating automobile benefits for 2001 and later taxation 
years, page 9
1.3 Automobile allowances, page 11

Chapter 2 - Other Benefits and Allowances, page 12
2.1 Board and lodging, page 13
2.2 Board, lodging, and transportation at special work sites and remote work 
locations, page 13
2.3 Counselling services, page 15
2.4 Disability-related employment benefits, page 15
2.5 Discounts on merchandise and commissions on sales, page 15
2.6 Educational allowances for children, page 15
2.7 Gifts, awards, and social events, page 16
2.8 Group term life insurance policies - Employer-paid premiums, page 16
2.9 Housing - Rent-free and low-rent, page 17
2.10 Interest-free and low-interest loans, page 18
2.11 Medical expenses, page 20
2.12 Moving expenses and relocation benefits, page 20
2.13 Municipal officer's expense allowance, page 22
2.14 Parking, page 22
2.15 Premiums under a private health services plan, page 23
2.16 Premiums under provincial hospitalization, medical care insurance, and 
certain Government of Canada plans, page 23
2.17 Professional membership dues, page 23
2.18 Recreational facilities, page 23
2.19 Registered retirement savings plans (RRSPs), page 24
2.20 Spouse or common-law partner's travelling expenses, page 24
2.21 Stock options, page 24
2.22 Subsidized meals, page 25
2.23 Subsidized school services, page 26
2.24 Transportation to the job, page 26
2.25 Travelling allowances, page 26
2.26 Tuition fees, scholarships, and bursaries, page 26
2.27 Uniforms and special clothing, page 27
2.28 Wage-loss replacement plans or income maintenance plans, page 27

Chapter 3 - Housing and Travel Assistance Benefits Paid in a Prescribed Zone, 
page 28
3.1 Accommodation or utilities provided by the employer, page 28
3.2 Board, lodging, and transportation at a special work site, page 29
3.3 Travel assistance benefits, page 29
3.4 Payroll deductions, page 30

Chapter 4 - Remitting GST/HST on Employee Benefits, page 30
4.1 Employee benefits, page 31
4.2 Situations where you are not considered to have collected GST/HST, page 31
4.3 When are you considered to have collected GST/HST? page 31
4.4 How do you calculate the amount of GST/HST you are considered to have 
collected? page 31
4.5 Input tax credits (ITCs), page 32
4.6 Property acquired before 1991 or from a non-registrant, page 33
4.7 Summary, page 33
4.8 Examples, page 33
Benefits Chart, page 35

\\\ Major changes that have taken place since last year are outlined in red. 
\\\


PAGE 4

What's New?

Paper reduction

As part of our ongoing efforts to save paper and money, we have stopped 
mailing a printed copy of the Payroll Deductions Tables (T4032) to employers 
with multiple accounts or identified as electronic filers. If you did not 
receive a paper copy but still need one, see the available options in the 
section called "Do you need other publications?" at the beginning of this 
guide.

Gifts, awards and social events

You will now find the information on awards for employees' suggestions, 
holiday trips, other prizes and incentive awards in section 2.7 "Gifts, 
awards, and social events."

Travelling allowances

We have included information concerning travelling allowances for other 
employees. See the section 2.25 "Travelling Allowances" for details.

Notice

Proposed changes

This guide includes proposed changes to legislation, that had not become law 
at the time of printing. However, we are preparing to apply them. Instructions 
in this guide reflect the proposed changes.

Work sheet - Calculating automobile benefits for 2001 and later taxation years

Use the work sheet on pages 9 and 10 to calculate automobile benefits. The 
work sheet is available only in this guide.

Tables on Diskette for calculating automobile benefits

We provide a Windows-based program for calculating payroll deductions called 
Tables on Diskette (TOD). TOD also has an option to calculate automobile 
benefits. You can use TOD to calculate most taxable automobile benefits, 
including:
- the standby charge for an owned or leased car;
- the ratio for personal kilometres driven;
- the operating cost benefit; and
- the benefit for employees who partially reimburse their employer.

TOD is available free of charge. Visit our Web site at www.ccra.gc.ca/tod to 
download the program or at www.ccra.gc.ca/orderforms to complete the on-line 
order form. If you do not have Internet access, you can get a copy of TOD by 
calling 1-800-959-2221. Ask for diskette T4143, Tables on Diskette.

Goods and services tax/harmonized sales tax (GST/HST)

The taxable benefits you include in the employment income of your employees 
for income tax purposes normally include an amount for GST/HST and provincial 
sales tax (PST) where applicable. The benefit should include the tax payable 
by you or the tax you reimburse to your employees, as well as the tax that 
would have been payable if you were not exempt from paying the tax because of 
the type of employer you are or the nature of the use of the property or 
service.

You have to include the GST/HST in the value of the taxable benefits you 
provide to employees, based on the gross amount of the benefits, without 
taking into account any amounts the employee reimbursed you for those 
benefits.

When we refer to GST/HST in this guide, remember that you still have to 
include the PST in the value of the benefit, where it applies. Calculate GST 
before any PST.

If you are a GST/HST registrant, you may have to remit the GST/HST relating to 
the taxable benefits you provide to your employees. For more information, see 
Chapter 4.

Chapter 1 - Automobile Benefits and Allowances

1.1 Definitions

Motor vehicle

A motor vehicle is an automotive vehicle designed or adapted for use on 
highways and streets. It does not include a trolley bus or a vehicle designed 
or adapted for use only on rails.

Automobile

An automobile means a motor vehicle that is designed or adapted mainly to 
carry individuals on highways and streets, and has a seating capacity of not 
more than the driver and eight passengers.

An automobile does not include:
- an ambulance;
- a motor vehicle bought mainly to use as a taxi;
- a bus used to transport passengers;
- a hearse used for funerals; or


PAGE 5

- a van, pick-up truck, or similar vehicle that:

- has a seating capacity of not more than the driver and two passengers, and 
in the year it is acquired is used mainly to transport goods or equipment in 
the course of business; or

- in the year it is acquired is used 90% or more of the time to transport 
goods, equipment, or passengers in the course of business.

Automobile availability

An automobile is available to employees if they have access to or control over 
the vehicle. Access ends when an employee returns all the automobile's keys.

Personal driving

Personal driving is any driving by an employee, or a person related to the 
employee, for purposes not related to his or her employment. This includes:
- vacation trips;
- driving for personal use; and
- travel between home and work (even if you insist that the employee drives 
the vehicle home).

We do not consider it to be personal driving if you require or allow the 
employee to travel directly from home to a point of call (for example, a 
salesperson visiting customers) other than your place of business to which the 
employee regularly reports, or to return home from that point.

Standby charge

The standby charge represents the benefit employees enjoy when your automobile 
is available for their personal use.

Your automobile costs

Your automobile costs in determining the standby charge are the total of the 
following two amounts:

- the cost of the automobile when you bought it, including options, 
accessories, and goods and services tax (GST) and provincial sales tax (PST), 
or harmonized sales tax (HST), but not including any reduction for trade-in; 
and

- the cost of additions (including GST and PST, or HST) you made to the 
automobile after you bought it (when you add the additions to the capital cost 
of the automobile for depreciation).

Specialized equipment you add to the automobile to meet the requirements of 
employment such as cellular phones, two-way radios, heavy-duty suspension and 
power winches is not considered as part of the automobile's cost for purposes 
of calculating the standby charge.

Leasing costs

Leasing costs in determining the standby charge include:

- the rental cost for the automobile; and

- any associated costs, such as maintenance contracts, excess mileage charges, 
terminal charges less terminal credits, and GST and PST, or HST, that you pay 
to the lessor under the leasing contract.

Leasing costs do not include liability and collision insurance costs.

Operating costs

- Operating costs include:
- gasoline and oil;
- maintenance charges and repair expenses, less insurance proceeds; and
- licences and insurance.

- Operating costs do not include:
- interest;
- capital cost allowance for an automobile you own;
- lease costs for a leased automobile; or
- parking costs.

1.2 Automobile benefits

The benefit for an automobile you provide for the year is generally the total 
of the following amounts:
- a standby charge for the year; and
- an operating cost benefit for the year;
minus
- any reimbursements employees make in the year for benefits you otherwise 
include in their income for the standby charge or the operating costs.

You and your employees should keep records on the use of an automobile so that 
you can properly identify the business and personal use amounts of the total 
kilometres driven in a calendar year by an employee or a person related to the 
employee.

Note
Any tax payable by you in buying or leasing an employer-provided automobile 
has to be included when you calculate the automobile standby charge benefit. 
You have to include any tax (GST and PST, or HST) payable by you, as well as 
tax that would have been payable if you were not exempt from paying the tax 
because of the type of employer you are or the nature of the use of the 
property.

Calculating a standby charge benefit

The standby charge represents the benefit employees enjoy when your automobile 
is available for their personal use.

If the employee does not use the automobile for personal driving, there is no 
taxable benefit, even if the vehicle was available to the employee for the 
entire year. This applies as long as you require the employee to use the 
automobile in the course of his or her employment.

You calculate the standby charge differently depending on whether you own or 
lease the automobile.


PAGE 6

Automobile you own
Base the standby charge on:

- 2% of the automobile's cost to you;

- the number of 30-day periods in the year the automobile was available to the 
employee (after you divide the number of days by 30, see the work sheet on 
page 9 to know how to round off the resulting amount);

- the personal driving done while the automobile was available to the 
employee; and

- the amount of any payment (reimbursement) you received from the employee for 
the standby charge.

Fleet operations

You may operate a fleet or pool of automobiles from which an employee uses 
several automobiles during the year. If you assign an automobile to an 
employee from a fleet or pool on a long-term or exclusive basis, you have to 
base the standby charge on the automobile you have assigned to the employee. 
However, if the fleet is mostly the same or if you group it into a few similar 
groups, you can calculate the standby charge based on the average cost of the 
group from which you provide the automobile. You and the employee must agree 
to this.

Automobile you lease
Base the standby charge on:

- two-thirds of the cost of your automobile lease less the amount payable to 
the lessor for insuring against loss, damage, or liability resulting from use 
of the automobile;

- the number of 30-day periods in the year that the automobile was available 
to the employee (after you divide the number of days by 30, see the work sheet 
on page 9 to know how to round off the resulting amount);

- the personal driving done while the automobile was available to the 
employee; and

- the amount of any payment (reimbursement) you received from the employee for 
the standby charge.

Lump-sum lease payments

Lump-sum amounts you pay the lessor at the beginning or end of a lease that 
are not a payment to buy the automobile will affect the standby charge for the 
automobile.

Prorate the lump-sum payment you make at the beginning of a lease over the 
life of the lease.

If you make a lump-sum payment at the end of a lease, we consider it to be a 
terminal charge. This means your lease costs should have been higher and the 
standby charge for the automobile has been understated. In this situation, you 
can use one of the following methods:

- add the terminal charge to the lease costs in the year you end the lease; or

- prorate the payment over the term of the lease and amend the T4 or T4A slips 
of those individuals who used the vehicle, as long as:

- the employees agree; and

- the employees can still request an income tax adjustment for the years in 
question.

Each employee can then write to any tax services office or tax centre and ask 
us to adjust their returns for those years.

A lump-sum payment you receive from the lessor at the end of a lease is 
considered to be a terminal credit. When this happens, the standby charge for 
the automobile has been overstated since the lease costs should have been 
lower. In this situation, you can use one of the following methods:

- deduct the terminal credit from the lease costs in the year you end the 
lease; or

- amend the T4 or T4A slips of the individuals who used the automobile and 
give them a letter explaining the reduction, as long as:

- the employees agree; and

- the employees can still request an income tax adjustment for the years in 
question.

Each employee can then write to any tax services office or tax centre and ask 
us to adjust their returns for those years.

Whichever method you use when you make or receive a lump-sum payment at the 
end of the lease, include GST/HST.

Reducing the standby charge

You can reduce the standby charge if the automobile is used at least 90% of 
the time for business purposes and the kilometres for personal use are less 
than 1,000 per 30-day period for a total of 12,000 kilometres a year.

You can also reduce the standby charge for individuals you employ to sell or 
lease automobiles if:

- the individual is employed mainly to sell or lease automobiles;

- an automobile you own was made available to that individual or to someone 
related to that individual; and

- you acquired at least one automobile during the year.

You can than choose the rate of 1.5% instead of 2% for the standby charge, and 
calculate your automobile cost as the greater of the following two amounts:

- the average cost of all automobiles you acquired to sell or lease in the 
year; or

- the average cost of all new automobiles you acquired to sell or lease in the 
year.

Partnerships

You have to include a standby charge benefit in the income of a partner or an 
employee of a partner if a partnership makes an automobile available for 
personal use to:
- a partner or a person related to the partner; or
- an employee of a partner or a person related to an employee of a partner.

Use the work sheet provided on page 9 to calculate the standby charge benefit.


PAGE 7

Calculating an operating cost benefit

When you or a person related to you provides an automobile to an employee and 
pays for the operating expenses related to personal use (including GST and 
PST, or HST), this payment represents a taxable benefit to the employee.

If you pay any amount of operating expenses, you have to calculate the 
operating cost benefit using a charge based on a fixed rate for 2001 and later 
taxation years of 16 cents per kilometre of personal use (including GST and 
PST, or HST).

If the employee's main source of employment is selling or leasing automobiles, 
the fixed rate for 2001 and later taxation years is 13 cents per kilometre of 
personal use (including GST and PST, or HST).

Reimbursement for operating costs

If the employee reimburses you in the year, or no later than 45 days after the 
end of the year for all operating expenses (including GST and PST, or HST) 
attributable to personal use, you do not have to calculate a benefit for 
operating costs in the year.

If the employee reimburses you for part of the vehicle's operating costs in 
the year, or no later than 45 days after the end of the year, deduct the 
payment from the calculated benefit.

Example
In 2002, you provided your employee with an automobile. The distance the 
employee drove during the year was 30,000 kilometres. The distance the 
employee drove for personal use during the year was 10,000 kilometres.

You paid $3,000 in costs associated with maintenance, licences, and insurance. 
Calculate the part of the operating expenses that relates to the employee's 
personal use of the automobile as follows:
10,000 kilometres divided by 30,000 kilometres multiplied by $3,000 = $1,000

If the employee reimbursed the total amount of $1,000 in the year, or no later 
than 45 days after the end of the year, you do not have to calculate an 
operating cost benefit for this employee.

However, if the employee reimbursed only $800 of the expenses you paid in the 
year, or no later than 45 days after the end of the year, you have to 
calculate the operating cost benefit as follows:
10,000 kilometres multiplied by 16 cents per kilometres = $1,600
$1,600 minus $800 = $800
The operating cost benefit would be $800.

Note
When you use the fixed-rate method, you still have to keep records of this 
benefit.

Optional calculation

You can choose an optional method to calculate the vehicle's operating cost 
benefit if:

- you include a standby charge in your employee's income;

- your employee uses the automobile more than 50% of the time in the course of 
his or her office or employment; and

- your employee notifies you in writing before the end of the taxation year to 
use this method.

If your employee meets these three conditions, calculate the operating cost 
benefit of the automobile at one-half of the standby charge before deducting 
any payments (reimbursements) your employee or a person related to your 
employee makes. In some cases, this optional calculation may result in a 
higher benefit amount than the fixed rate calculation.

If the employee reimburses you for part of the vehicle's operating costs in 
the year, or no later than 45 days after the end of the year, deduct the 
payment from the calculated benefit.

Payroll deductions

After you estimate the value of the automobile benefit, prorate the amount to 
the employee's pay periods. Add the resulting amount and the value of other 
benefits to the employee's salary to determine the total amount subject to 
Canada Pension Plan (CPP) contributions and payroll deductions of tax per pay 
period. The automobile benefit is not insurable and is not subject to 
Employment Insurance (EI) premiums.

Reporting automobile benefits on the T4 slip

When you provide a taxable automobile benefit, you have to report it on a T4 
slip.

At the end of the year, or when the person is no longer your employee, 
recalculate the benefit using the automobile's actual availability and the 
kilometres driven for the taxation year. Adjust the employee's last pay 
accordingly. After you have calculated the final amount, enter it under code 
34 and include it in box 14 of the T4 slip.

Shareholder's benefit

The automobile benefit to the shareholder of a corporation (or a person 
related to the shareholder) has to be included in the income of the 
shareholder.

You must report the benefit on a T4 slip when the individual is both a 
shareholder and an employee and the automobile is provided to the individual 
(or a person related to that individual) in his or her capacity as an 
employee.


PAGE 8

However, you must report the benefit in box 28 of a T4A slip when:
- the shareholder is not an employee; or
- the individual is both a shareholder and an employee and you provide the 
automobile to the individual in his or her capacity as a shareholder.

Use the work sheet provided on page 9 to calculate the standby charge and the 
operating cost benefits.

Motor vehicle benefit

The personal use of motor vehicles such as trucks, buses, etc., which are not 
included in the definition of automobiles, may also be a taxable benefit. If 
you provide your employees with such vehicles for personal use, you must 
reasonably estimate the fair market value of that benefit, including GST/HST.

For more information, see Interpretation Bulletin IT-63, Benefits, Including 
Standby Charge for an Automobile, From the Personal Use of a Motor Vehicle 
Supplied by an Employer - After 1992.

Work sheet - Calculating Automobile Benefits for 2001 and Later Taxation Years

You can calculate the value of an employee's automobile benefits using the 
following work sheet. The amount you determine is the taxable benefit you have 
to report on the T4 or T4A slip.


PAGE 9

Calculating Automobile Benefits

Last name ^
First name ^
Social insurance number ^
Address ^

Complete Step 1, "Standby charge," only if you provide your employees an 
automobile for their personal use. Otherwise, go to Step 2, "Operating cost 
benefit."

Step 1 - Standby charge

Simplified calculation

Do this calculation if the following conditions are met:

- the automobile you provide your employee is owned by you;

- the employee used the same automobile throughout the year;

- the employee's principal source of employment is not selling or leasing 
automobiles; and

- the employee is not eligible for the reduced standby charge rate as he or 
she does not meet the conditions set out in d) below.

Cost of automobile you provided*
(including GST and PST or HST) multiplied by 24% = $ ^

* For the meaning of cost of automobile, see the definitions at the beginning 
of this chapter).

Minus: Employee reimbursements attributable to standby charge $ ^

Line A Standby charge benefit (if negative, enter "0") $ ^

Detailed calculation

Before calculating 1, 2, or 3 below, please read the following instructions 
carefully.

a) For the meaning of cost of automobile, see the definitions at the beginning 
of this chapter.

b) The highest average cost of automobiles is one of the following amounts, 
whichever is more:
- the average cost of all automobiles you acquired to sell or lease in the 
year; or
- the average cost of all new automobiles you acquired to sell or lease in the 
year.

c) You must determine the number of days the automobile was available to the 
employee for the entire calendar year (including weekends and holidays).

d) Calculate the standby charge at a reduced rate if you meet the following 
conditions:
- you require employees to use the automobile to perform their duties;
- the employee uses the automobile at least 90% of the time for business 
purposes; and
- the number of personal-use kilometres in a taxation year is less than 12,000 
kilometres.

e) * When you divide the total days available by 30, round off the result to 
the nearest whole number if it is more than one.

Examples:
Available 20 days divided by 30 = 0.67 (do not round off)
Available 130 days divided by 30 = 4.33 (round to 4)
Available 135 days divided by 30 = 4.50 (round to 4)
Available 140 days divided by 30 = 4.67 (round to 5)

Choose 1, 2, or 3

Line 1 Employer-owned automobile: Cost of automobile (including GST and PST or 
HST) multiplied by 2% = $ ^

Line 2 Employer-leased automobile (lessee): Monthly leasing cost (including 
GST and PST or HST, excluding insurance) multiplied by two-thirds = $ ^

Line 3 Employee sells or leases automobiles: Highest average cost of 
automobiles, (including GST and PST or HST) (see b) above). Multiplied by 1.5% 
= $ ^

Line A) Amount from 1, 2, or 3 above multiplied by the number of days auto 
available to employee divided by 30* ^

Reducing the standby charge (see d) above)

Line B) Personal kilometres divided by the Number of days auto available to 
employee divided by 30* multiplied by 1,000 = $ ^

Line 4 Amount from line A multiplied by Amount line B = $ ^

Line 5 Minus: Employee reimbursements attributable to standby charge: $ ^

Line B Standby charge benefit (if negative, enter "0"): $ ^


PAGE 10

Calculating Automobile Benefits - continued

Step 2 - Operating cost benefit

You do not have to calculate an operating cost benefit when the employee 
reimburses you for all operating expenses attributable to personal use no 
later than 45 days after the end of the year.

Basic calculation for 2001 and later taxation years

Complete this calculation if both of the following conditions are met:

- the employee does not reimburse or only partially reimburses you for 
operating expenses attributable to personal use no later than 45 days after 
the end of the year; and

- the employee did not elect to use the optional calculations, and:

- the employee's principal source of employment is selling or leasing 
automobiles

Line 6 Personal kilometres driven multiplied by 13 cents = $ ^
or

- the employee occupies any other employment

Line 7 Personal kilometres driven multiplied by 16 cents = $ ^
or

Optional calculation (This calculation may not be beneficial in all cases.)

You can use this calculation if the employees meet both of the following 
conditions:

- they use the automobile more than 50% in the course of their office or 
employment; and

- they request (in writing before the end of the year) that you use this 
method.

Line 8 Standby charge amount line A or line B plus Employee reimbursements 
attributable to standby charge multiplied by 50% = $ ^

Amount 6, 7, or 8 above: $ ^

Minus: Employee reimbursements for the operating cost benefit made no later 
than 45 days after the end of the year $ ^

Line C Operating cost benefit (if negative, enter "0") $ ^

Total of amounts Line A or B and C (employee taxable benefit you report in box 
14 and under code 34 of the T4 or, if applicable, in box 28 of the T4A) $ ^


PAGE 11

1.3 Automobile allowances

An automobile allowance means any payment that employees receive from an 
employer for using their own motor vehicle in connection with or in the course 
of their office or employment. This payment is in addition to their salary or 
wages, without having to account for its use. An automobile allowance is 
taxable unless it is a reasonable per-kilometre allowance.

There is no GST/HST on automobile allowances.

Non-taxable reasonable per-kilometre allowance

If the allowance paid to your employees is based on a per-kilometre rate that 
we consider reasonable, it is not taxable. When your employees complete their 
returns, they do not include this allowance in income. A non-taxable allowance 
is not subject to CPP and EI withholdings.

We consider an allowance for using a motor vehicle to be reasonable only if 
all the following conditions apply:

- the allowance is based only on the number of business kilometres driven in a 
year;

- the rate per kilometre is reasonable; and

- you did not reimburse the employee for expenses related to the same use, 
except in situations where you reimburse an employee for toll or ferry charges 
or supplementary business insurance if you have determined the allowance 
without including these reimbursements.

The type of vehicle and the driving conditions usually determine whether we 
consider a motor vehicle allowance to be reasonable. The automobile allowance 
rates per kilometre that we usually consider reasonable are the amounts 
prescribed in section 7306 of the Income Tax Regulations. These rates 
represent the maximum amount you can deduct as business expenses. You can use 
them as a guideline to determine if a motor vehicle allowance paid to an 
employee is reasonable.

Automobile allowance rates

For 2002, they are:
- 41 cents per kilometre for the first 5,000 kilometres;
- 35 cents per kilometre thereafter; and
- an additional 4 cents per kilometre for travel in the Northwest Territories, 
Yukon, and Nunavut.

Per-kilometre allowance rates that we do not consider reasonable

If the allowance paid to your employee is based on a per-kilometre rate that 
we do not consider reasonable because it is either too high or too low, it is 
taxable. When your employees complete their returns, they have to include the 
allowance in income, and they may be able to deduct the allowable expenses. 
See the section called "Employees' allowable expenses" on this page.

Note
If the allowance paid to your employees is unreasonably low, you may not have 
to include it in their income. This administrative policy applies only if the 
employees do not claim allowable expenses when they complete their returns.

Flat-rate allowance

If the allowance paid to your employee is based on a flat rate that is not 
related to the number of kilometres driven, it is taxable. When your employees 
complete their returns, they have to include the allowance in their income and 
they may be able to deduct the allowable expenses. See the section called 
"Employees' allowable expenses" below.

Combination of flat-rate and reasonable per-kilometre allowances

If the allowance you pay to your employee is a combination of flat-rate and 
reasonable per-kilometre allowances that cover the same use for the vehicle, 
the total combined allowance is taxable.

When completing their returns, employees have to include the combined 
allowance in their income and can claim allowable expenses.

Employees' allowable expenses

When employees claim allowable expenses on their returns, they have to 
complete Part A of Form T2200, Declaration of Conditions of Employment. You 
have to complete Part B and sign the forms to certify that your employees met 
the required conditions during the year. They do not have to file this form 
with their return. However, they have to keep it in case we ask to see it 
later.

For more information on allowable expenses, see the guide called Employment 
Expenses (T4044).

Reimbursement or advance for travel expenses

A reimbursement is a payment you make to your employees as a repayment for 
amounts they spent while conducting your business. Generally, the employee 
completes a claim or expense report detailing the amounts spent. Do not 
include a reasonable reimbursement, which becomes part of your business 
expenses, in the employee's income.

An advance is an amount you give to employees for expenses they will incur on 
your business. They will account for their expenses by producing vouchers and 
return any amount they did not spend.

Usually, a reimbursement or an accountable advance for travel expenses is not 
income for the employee receiving it unless it represents payment of the 
employee's personal expenses.

Averaging allowances

To comply with the rules on reasonable per-kilometre automobile allowances, 
employees must file expense claims with you on an ongoing basis, starting at 
the beginning of the year.


PAGE 12

A flat-rate or lump-sum automobile allowance that is not based on the number 
of kilometres driven cannot be averaged at the end of the year to determine a 
reasonable per-kilometre rate and then be excluded from the employee's income.

We understand the administrative problems that can result from this. As a 
result, we are giving you an alternative. If you make accountable advances to 
employees for automobile expenses, you do not have to include them in the 
employee's income if all the following conditions are met:

- there is a pre-established per-kilometre rate that is not more than a 
reasonable amount;

- the rate and the advances are reasonable under the circumstances;

- you document this method in the employee's record; and

- no other provision of the Income Tax Act requires you to include the 
advances in the employee's income.

Employees have to account for the business kilometres they travelled and any 
advances they received. They must do so on the date their employment ends in 
the year, or by the calendar year end, whichever is earlier. At that time, you 
have to pay any amounts you owe the employee and the employee must repay any 
amount over actual expenses. You cannot simply report the excess advances on 
the employee's T4 slip.

For more information on automobile allowances, see Interpretation Bulletin IT-
522, Vehicle, Travel and Sales Expenses of Employees.

Payroll deductions

Add the amount of the taxable allowances and the value of other benefits to 
the employee's salary to determine the total amount subject to payroll 
deductions such as CPP contributions, EI premiums, and income tax per pay 
period. The taxable automobile allowances are insurable and are subject to EI 
premiums.

Reducing tax deductions at source on automobile allowances

In many cases, automobile allowances that are not based solely on a reasonable 
per-kilometre rate can later be substantially offset by the employees' expense 
deductions when employees complete their individual returns. Employees can ask 
to reduce or eliminate their payroll deductions (commonly called a waiver) 
from the allowances.

To do this, an employee has to send a request to the Client Services Division 
at his or her tax services office and include the following information:

- the type of employment for which you will pay the allowance;

- an estimate of the total automobile allowances the employee will receive in 
the year;

- an estimate of the business kilometres the employee will drive in the year;

- an estimate of the employee's automobile expenses for the year; and

- the amount for which the employee is requesting the waiver.

If you have a number of employees in the same situation, you can get a bulk 
waiver for the group. This way, employees do not have to request individual 
waivers. For more information, contact your tax services office.

Reporting automobile allowances on the T4 slip

Reasonable per-kilometre allowance

If you paid your employee an allowance that is calculated only on a reasonable 
per-kilometre rate, it is not taxable. Do not report this amount on the 
employee's T4 slip.

Allowance based on a per-kilometre rate that we do not consider to be 
reasonable

If you paid your employee a per-kilometre allowance that you calculated on a 
rate that we do not consider reasonable, it is taxable. Enter the yearly total 
of this allowance under code 40 and in box 14 of the T4 slip.

Flat-rate allowance

If you paid your employee a flat-rate allowance that is not based on the 
number of kilometres driven, it is not considered to be a reasonable allowance 
and it is taxable. Enter the yearly total of the flat-rate allowance under 
code 40 and in box 14 of the T4 slip.

Flat-rate allowance and reasonable per-kilometre allowance

If you paid your employee a flat-rate allowance and a reasonable per-kilometre 
allowance that cover the same use for the vehicle, the total is taxable. 
Include both the flat-rate allowance and the reasonable per-kilometre 
allowance in income.

Enter the yearly total of the employee's flat-rate allowance and reasonable 
per-kilometre allowance under code 40 and in box 14 of the T4 slip.

Chapter 2 - Other Benefits and Allowances

General information

There are many types of benefits and allowances that you may have to include 
in an employee's income. Whether or not they are taxable depends on the type 
of benefit or allowance and the reason an employee or officer receives it. Add 
the taxable benefits and allowances to the employee's income each pay period 
to determine the total amount subject to source deductions.

Where no cash remuneration is paid at any time during the year and the only 
amounts on the employee's T4 slip are for non-cash benefits, you are not 
required to withhold CPP contributions or income tax.


PAGE 13

Pensionable earnings

Taxable benefits and allowances are generally pensionable and therefore 
subject to Canada Pension Plan (CPP) contributions, regardless of whether they 
are in cash or non-cash benefits.

Insurable earnings

Taxable benefits in cash and taxable allowances are generally insurable 
earnings and therefore subject to Employment Insurance (EI) premiums.

However, non-cash taxable benefits are not insurable for EI purposes, except 
for the value of board and lodging enjoyed by an employee in a period during 
which you pay the employee cash earnings.

If the employment is not insurable employment under the Employment Insurance 
Act, taxable allowances as well as taxable benefits in cash and non-cash are 
not insurable earnings and therefore not subject to EI premiums.

Reporting benefits and allowances

You must report taxable benefits and allowances on a T4 slip in box 14, 
"Employment income," and under code 40 in the "Other information" area, unless 
we tell you to use a different code.

If you are a third party payer providing taxable benefits to employees of 
another employer, you must report them on a T4A slip in box 28, "Other 
income."

If a benefit or allowance described in this chapter is non-pensionable, non-
insurable, and non-taxable, do not report it.

Goods and services tax/harmonized sales tax (GST/HST)

You may have to include goods and services tax (GST) or harmonized sales tax 
(HST) in the value of many of the taxable benefits you add to employment 
income for income tax purposes. See the sections in this chapter to find out 
if GST/HST applies to the allowances and benefits you provide to your 
employees.

The GST is 7% and the HST is 15% of the amount used to calculate the taxable 
benefit. However, this does not apply to:

- cash remuneration (such as salary, wages, and allowances); and

- a taxable benefit that is an exempt supply or a zero-rated supply as defined 
in the Excise Tax Act.

Benefits Chart

The Benefits Chart at the end of the guide indicates if you should deduct CPP 
contributions and EI premiums on the taxable amounts, which codes to use to 
report the taxable amounts, and whether to include GST/HST in the value of the 
benefit for income tax purposes.

2.1 Board and lodging

If you give free board and lodging to an employee, the employee receives a 
taxable benefit. As a result, you must add to the employee's remuneration the 
fair market value of the meals and accommodation you provide. Report this 
amount under code 30 and in box 14 on the employee's T4 slip.

If you provide subsidized board and lodging to an employee, determine the 
value of the benefit's board portion as described in section 2.22, "Subsidized 
meals." The benefit's lodging part is the fair market value of the 
accommodation minus any amount the employee paid. Report the benefits under 
code 30 and in box 14 on the employee's T4 slip.

Payroll deductions
The taxable board and lodging benefit is pensionable. Deduct CPP contributions 
and income tax.

Even though this is a non-cash benefit, it is insurable if it is received by 
the employee in addition to cash earnings in the pay period-in that case, 
deduct EI premiums. If no cash earnings are paid during the pay period, it is 
not insurable-do not deduct EI premiums.

Exception to the rules

There is an exception to these rules when you provide meals and accommodation 
to an employee who works at a remote location or a special work site. For more 
information, see section 2.2 below.

2.2 Board, lodging, and transportation at special work sites and remote work 
locations

Special work sites

Generally, a special work site is an area where temporary duties are performed 
by an employee who maintains a self-contained domestic establishment at 
another location as his or her principal place of residence. Because of the 
distance between the two areas, the employee is not expected to return daily 
from the work site to his or her place of residence.

Board and lodging

You can exclude from income the value of board and lodging that you provided 
to an employee who works at a special work site, or the allowance the employee 
received, if he or she worked away from home under all these conditions:

a) the employee must have worked at a special work site where the duties 
performed were of a temporary nature;

b) the employee maintained at another location a self-contained domestic 
establishment as his or her principal place of residence:

- that, throughout the period, was available for the employee's occupancy and 
the employee did not rent it to any other person; and

- to which, because of distance, we could not reasonably expect the employee 
to have returned daily from the special work site; and


PAGE 14

c) the board and lodging you provided or the allowance the employee received 
must be for a period of at least 36 hours. This period can include time spent 
travelling between the employee's principal place of residence and a special 
work site. Also, the employee's duties required him or her to be away from the 
employee's principal place of residence or to be at the special work site.

Transportation

An employee can exclude from income the value of free or subsidized 
transportation between the special work site and the employee's principal 
place of residence, or a reasonable allowance received for his or her 
transportation expenses, for a period described in c) above. This only applies 
if the employee received board and lodging, or a reasonable allowance for 
board and lodging, from you for that period.

Form TD4, Declaration of Exemption - Employment at Special Work Site

If an employee meets all of the conditions in a), b), and c) above, you and 
the employee should complete Form TD4, Declaration of Exemption - Employment 
at Special Work Site. This allows you to exclude the benefit or allowance from 
the employee's income. As long as you complete Form TD4, do not include the 
amounts in box 14 or under code 30 on the employee's T4 slip. After you 
complete Form TD4 with the employee, keep it with your payroll records.

You should not complete Form TD4 if the employee does not meet all the above 
conditions. Treat the amounts as the employee's income. Make the necessary 
deductions and report the amounts on the employee's T4 slip. This also applies 
to any part of an allowance for meals, accommodation, and transportation that 
is more than a reasonable amount.

Note
If the special work site is in a prescribed zone, see section 3.2, "Board, 
lodging, and transportation at a special work site."

Fishers

If you provide board, lodging, or transportation allowances to fishers, see 
Interpretation Bulletin IT-254, Fishermen - Employees and Seafarers - Value of 
Rations and Quarters.

Remote work locations

We usually consider a work location to be remote when it is 80 kilometres or 
more from the nearest established community with a population of at least 
1,000 people.

A location is not considered an established community if it lacks essential 
services or such services are not available within a reasonable commuting 
distance (for example, basic food store, basic clothing store with merchandise 
in stock (not mail-order outlet), access to housing, certain medical help, and 
certain educational facilities).

Board and lodging

You can exclude from income the value of board and lodging you provide an 
employee who works at a remote work location, or the allowance the employee 
receives, if the following conditions are met:

- the employee has to be located where we could not reasonably expect him or 
her to set up and maintain a self-contained domestic establishment because of 
the remoteness of the location and the distance from any established 
community;

- you have not provided a self-contained establishment for the employee; and

- the allowances have to be for a period of at least 36 hours when:

- the employee's duties require the employee to be away from the principal 
place of residence; or

- the employee has to be at the remote work location.

Transportation

An employee can exclude from income the value of free or subsidized 
transportation, or a reasonable allowance received for transportation 
expenses, when he or she received an allowance or the value of board and 
lodging during that period. However, to qualify for the exemption, the 
transportation allowances you pay to an employee must be for a period of at 
least 36 hours when:
- the employee had to be away from his or her principal place of residence; or
- the employee had to be at the remote work location.

You must have paid the allowance for transportation between the remote work 
location and any location in Canada. If the remote work location is outside 
Canada, the allowance for transportation between that location and any 
location in Canada also qualifies for exemption.

When you provide board, lodging, and transportation under the above 
conditions, you do not have to report the equivalent value or any GST/HST that 
applies as remuneration to the employee on the T4 slip.

We do not need Form TD4, Declaration of Exemption - Employment at Special Work 
Site, when there is an exemption for board, lodging, or transportation 
allowances you pay to employees who work at a remote work location. If you 
need help determining whether a location qualifies as remote, contact any tax 
services office or tax centre.

An individual can meet the requirements of both a remote work location and a 
special work site. However, this benefit can be excluded from income only 
once.

Payroll deductions
If you exclude from income a benefit for board, lodging, and transportation at 
a special work site or remote work location, it is not pensionable and not 
insurable. Do not deduct CPP contributions, EI premiums or income tax.

Benefits that a third party supplies

It is possible that a third party may supply benefits for board, lodging, or 
transportation to the employees of another employer.

If this happens, and the allowance is taxable, the third party has to report 
the benefits in box 28 of a T4A slip.


PAGE 15

If the allowance is not taxable, a T4A slip is usually not required.

If the benefits are paid in a prescribed zone, see section 3.2, "Board, 
lodging, and transportation at a special work site."

For more information, see Interpretation Bulletin IT-91, Employment at Special 
Work Sites or Remote Work Locations.

2.3 Counselling services

The fees you pay to provide services such as financial counselling or income 
tax preparation for an employee are usually considered a taxable benefit. This 
applies whether you pay the fees directly or indirectly.

You have to include any applicable GST/HST in the value of such a benefit.

Employee counselling services are not taxable if they relate to:

- the mental or physical health (for example, tobacco, drug, and alcohol 
abuse, stress management, and employee assistance programs) of an employee or 
a person related to an employee (this does not include amounts for using 
recreational or sporting facilities and club dues);

- an employee's re-employment; and

- an employee's retirement.

Payroll deductions
Where the benefit is taxable, it is also pensionable. Deduct CPP contributions 
and income tax.

If the taxable benefit is paid in cash, it is insurable. Deduct EI premiums. 
If it is a non-cash benefit, it is not insurable-do not deduct EI premiums.

2.4 Disability-related employment benefits

Benefits you provide to employees who have a disability are generally not 
taxable.

Reasonable transportation costs between an employee's home and work location 
(including parking near that location) are not taxable if you pay them to or 
for an employee who:

- is legally blind; or

- has a severe and prolonged mobility impairment, which markedly restricts the 
individual's ability to perform a basic activity of daily living.

These transportation costs can include an allowance for taxis or specially 
designed public transit and parking that you provide or subsidize for these 
employees.

You may have employees with severe and prolonged mental or physical 
impairments. If you provide reasonable benefits for attendants to help these 
employees perform their duties of employment, these benefits are not taxable 
to the employee. The benefits can include readers for persons who are blind, 
signers for persons who are deaf, and coaches for persons who are 
intellectually impaired.

Payroll deductions
Do not deduct CPP contributions, EI premiums, or income tax on these benefits.

2.5 Discounts on merchandise and commissions on sales

If you sell merchandise to your employees at a discount, the benefit they get 
from this is not usually considered a taxable benefit. However, this does not 
apply:

- to a special arrangement you make with an employee or a group of employees 
to buy merchandise at a discount;

- to an arrangement that allows an employee to buy merchandise (other than old 
or soiled merchandise) for less than your cost; or

- when there is a reciprocal arrangement between two or more employers so that 
employees of one employer can buy merchandise at a discount from another 
employer.

If you sell merchandise to employees at below cost, the taxable benefit is the 
difference between the fair market value of the goods and the price the 
employees pay.

If a taxable benefit arises under any discount arrangement, and is not an 
exempt or zero-rated supply, include GST/HST in the value of the benefit.

Commissions that sales employees receive on merchandise they buy for personal 
use are not taxable. Similarly, when life insurance salespeople acquire life 
insurance policies, the commissions they receive are not taxable as long as 
they own the policies and have to make the required premium payments.

Payroll deductions
Where the benefit is taxable, it is also pensionable. However, it is not 
insurable since it is a non-cash benefit. Deduct CPP contributions and income 
tax, but do not deduct EI premiums.

2.6 Educational allowances for children

If you pay any amounts to an employee as an educational allowance for the 
employee's child, you have to include these amounts in the employee's income 
for the year.

However, the educational allowance may not be taxable when employees have to 
live in a specific location because of their employment and educational 
instruction is not available in the employees' official language. The language 
of educational instruction mainly used in the school must be one of the two 
official languages of Canada.

Other conditions are also related to this exemption. For more information, 
contact any tax services office or tax centre.

There is no GST/HST on educational allowances.

Payroll deductions
Where the allowance is taxable, it is also pensionable and insurable. Deduct 
CPP contributions, EI premiums, and income tax.


PAGE 16

2.7 Gifts, awards, and social events

A gift or award that you give an employee is considered to be a taxable 
benefit from employment, whether it is cash, near-cash or non-cash. However, 
under our policy, a non-cash gift or award that you give an employee may not 
be considered a taxable benefit under certain circumstances.

The policy allows you to give each employee up to two non-cash gifts per year, 
tax free, for a special occasion such as Christmas, Hanukkah, a birthday, a 
wedding, or the birth of a child.

It also allows you to give each employee up to two non-cash awards per year, 
tax free. An award is given for an employment-related accomplishment such as 
long or outstanding service, employees' suggestions, meeting or exceeding 
safety standards.

The policy limits the cost of the gifts to $500, including taxes, and the cost 
of the awards to $500, including taxes. If one non-cash gift costs you more 
than $500, you have to include the full fair market value of the gift in the 
employee's income. As well, if one non-cash award costs you more than $500, 
you have to include the full fair market value of the award in the employee's 
income.

If you give more than one non-cash gift per year and the total cost is more 
than $500, we allow you to exclude the cost of up to two gifts from the 
employee's income, as long as the total cost of the excluded gift or gifts is 
not more than $500. You have to include the fair market value of the remaining 
gift(s) in the employee's income. The same limits apply for non-cash awards 
given to an employee.

If you give more than one non-cash gift per year and the total cost is $500 or 
less, we allow you to exclude the cost of any two of the gifts from the 
employee's income. You have to include the fair market value of the remaining 
gift(s) in the employee's income. The same limits apply for non-cash awards 
given to an employee.

This policy does not apply to cash or near-cash gifts or awards. A near-cash 
item could be a gift certificate, gold nuggets, securities, stocks, or any 
other item that can be easily converted to cash.

If the benefit is all in cash, do not include GST/HST. However, if all or part 
of the taxable benefit is non-cash, and is not an exempt or zero-rated supply, 
GST/HST applies on that part.

For more information, visit our Web site at 
www.ccra.gc.ca/tax/business/payroll/gifts/menu-e.html

Payroll deductions
Where the benefit is taxable, it is also pensionable. Deduct CPP contributions 
and income tax.

If the taxable benefit is paid in cash, it is insurable. Deduct EI premiums. 
If it is a non-cash benefit, it is not insurable-do not deduct EI premiums.

Awards from a manufacturer

If a manufacturer of items or goods gives cash awards or non-cash awards to 
the dealer of the items or goods, the manufacturer does not have to report the 
awards on an information slip. However, if the dealer passes on cash awards to 
an employee, the dealer has to report the cash payment in box 14 and under 
code 40 on the employee's T4 slip. If the dealer passes on non-cash awards to 
an employee, the above-noted policy will apply.

If a manufacturer gives a cash award or a non-cash award directly to the 
employee of a dealer or other sales organization, the manufacturer has to 
report the value of the award as a benefit in box 28, "Other income," on a T4A 
slip.

Social events

If you provide a free party or other social event to all your employees and 
the cost is not more than $100 per person, we do not consider it to be a 
taxable benefit. Ancillary costs such as transportation home would increase 
the $100 per person amount. If the cost of the party is greater than $100, the 
entire amount, including the ancillary cost, is a taxable benefit.

If the benefit is all cash, do not include GST/HST in it. However, if all or 
part of the taxable benefit is non-cash and is not an exempt or zero-rated 
supply, GST/HST applies on that part.

For more information, see our Technical News No. 15 and Interpretation 
Bulletin IT-470, Employees' Fringe Benefits, and its Special Release.

Payroll deductions
Where the benefit is taxable, it is also pensionable. Deduct CPP contributions 
and income tax.

If the taxable benefit is paid in cash, it is insurable. Deduct EI premiums. 
If it is a non-cash benefit, it is not insurable-do not deduct EI premiums.

2.8 Group term life insurance policies - Employer-paid premiums

This section applies to both current and former employees (retirees) who 
receive group term life insurance benefits from their employer or former 
employer.

Definitions

Group term life insurance policy means a group life insurance policy where the 
only amounts payable by the insurer are policy dividends, experience rating 
refunds, and amounts payable on the death or disability of an employee or 
former employee.

Term insurance is any life insurance under a group term life insurance policy 
other than insurance for which a lump-sum premium has become payable or has 
been paid. Life insurance for active employees would usually be term 
insurance, although it is sometimes provided for retired employees as well.

Lump-sum premium is a premium for insurance on an individual's life where all 
or part of the premium is for insurance for a period that extends more than 13 
months after the payment of the premium (or more than 13 months after the time 
the premium became payable, if it is paid after it became payable).


PAGE 17

Calculation

If the premiums are paid regularly and the premium rate for each individual is 
not dependent on age or sex, the taxable benefit is the total of:

- the premiums payable for term insurance on the individual's life; and

- the total of all sales taxes and excise taxes that apply to the individual's 
insurance coverage;
less

- the premiums and any taxes the employee paid either directly or through 
reimbursements to you.

In any other situation, a detailed calculation is required. For more 
information, contact your tax services office.

Note
Policy premiums for accidental death and dismemberment coverage are not 
included in calculating the taxable benefit.

You have to report this benefit for current employees on a T4 slip and former 
employees on a T4A slip. The $500 reporting threshold for T4A slips, which is 
described in the employers' guide called Deducting Income Tax on Pension and 
Other Income, and Filing the T4A Slip and Summary Form, will not apply.

Multi-employer plan administrators or trustees who provide taxable benefits 
from group term life insurance to employees or former employees under such a 
plan have to prepare a T4A slip only if the benefit is more than $25. They 
have to enter the group term life insurance benefits under code 19 and in box 
28, "Other income," of the T4A slip.

Premiums paid by an employer for employees' group life insurance (that is not 
group term insurance) are also a taxable benefit. For more information, 
contact your tax services office.

There is no GST/HST on this benefit.

Notes
In Ontario, the 8% provincial sales tax affects the taxable benefit for some 
insurance premiums that employers pay.

Quebec employers have to calculate a taxable benefit on the total amount of 
group life insurance premiums that they pay for their employees.

Payroll deductions
This taxable benefit is pensionable. However, it is not insurable since it is 
a non-cash benefit. Deduct CPP contributions and income tax, but do not deduct 
EI premiums.

2.9 Housing - Rent-free and low-rent

If you provide an employee, including an apartment block superintendent, with 
a house, apartment, or similar accommodation rent-free or for less than the 
fair market value of such accommodation, the employee is considered to be 
receiving a taxable benefit.

Amounts that you pay for your employees for utilities (such as phone, hydro, 
and natural gas) are also a taxable benefit.

You have to estimate a reasonable amount for the benefit. It is usually the 
fair market value for the same type of accommodation minus any rent the 
employee paid.

If you give your employee cash for rent or utilities, the value of the housing 
benefit is the amount of the cash payment. This is the amount that you include 
in the employee's income.

The value of the accommodation is usually not subject to GST/HST if the 
employee occupies it for at least one month.

Report the taxable benefit under code 30 and in box 14 on the employee's T4 
slip.

Note
If the dwelling you provide to the employee is in a prescribed zone, see 
section 3.1, "Accommodation or utilities provided by the employer."

Payroll deductions
The taxable housing benefit is pensionable. Deduct CPP contributions and 
income tax.

If the taxable benefit is paid in cash, it is insurable. Deduct EI premiums. 
If it is a non-cash benefit, it is insurable if it is received by the employee 
in addition to cash earnings in a pay period-in that case, deduct EI premiums. 
If no cash earnings are paid during the pay period, it is not insurable-do not 
deduct EI premiums.

Clergy residence deduction

If by virtue of his or her employment, an employee receives an amount in 
respect of his or her living accommodation such as rent-free, low-rent 
residence or other accommodation or amounts received for his or her own 
residence, you have to estimate the value of the benefit and report it on the 
employee's T4 slip. An employee is a member of the clergy, a regular minister 
or a member of a religious order who is in charge of, or ministers to, a 
diocese, parish, or congregation. This also applies to an employee who 
exclusively occupies a full-time administrative position by appointment of a 
religious order or denomination.

To claim a deduction from income for his or her residence, an employee has to 
complete Parts A and C of the Form T1223, Clergy Residence Deduction. You have 
to complete Part B and sign the form to certify that this employee has met the 
required conditions. The employee does not have to file the form with his or 
her return, but must keep it in case we ask to see it later.

If the employee tells you in writing that he or she will claim a deduction 
from income for the residence or other accommodation, do not include the rent 
and utilities portion of the benefit in income when you calculate the income 
tax deductions required. For information about CPP and EI, see chapters 2 and 
3 of the employers' guide called Payroll Deductions (Basic Information). 
Although the rent and utilities portion can be excluded from income for the 
purposes of tax deductions, you still have to report it on the T4 slip.


PAGE 18

For more information, see Interpretation Bulletin IT-141, Clergy Residence 
Deduction.

Special circumstances that reduce the value of a housing benefit

The following two factors may reduce the value of a housing benefit you 
provide to your employee:

- Suitability of size
Your employee may have to occupy a dwelling larger than he or she needs (for 
example, a single person in a three-bedroom house). To determine the taxable 
housing benefit, you can reduce the value of the accommodation to equal the 
value of accommodation that is appropriate to your employee's needs (in this 
case, a one or two-bedroom apartment or house).

Note
If the dwelling you provide is smaller than your employee needs, we cannot 
allow any reduction in value.

- Loss of privacy and quiet enjoyment
If the dwelling you provide to your employee contains things like equipment, 
public access, or storage facilities that infringe on your employee's privacy 
or quiet enjoyment of the dwelling, you can reduce the value of the housing 
benefit. The reduction has to reasonably relate to the degree of disturbance 
that affects your employee. For more information, contact your tax services 
office.

These two factors apply in the above order. If both circumstances apply to a 
dwelling, you should first reduce the value of the dwelling to equal the value 
of accommodation that suits your employee's needs. Then, you should apply any 
reduction for loss of privacy and quiet enjoyment to that reduced value.

2.10 Interest-free and low-interest loans

You have to include in the income any benefit that an individual receives as a 
result of an interest-free or low-interest loan because of an office, 
employment, or shareholding. The benefit is the amount of interest that the 
individual would have paid on the loan for the year at the prescribed rates 
(see the section called "Prescribed rates of interest" on page 20) minus the 
amount of interest that he or she actually paid on the loan in the year, or no 
later than 30 days after the end of the year. Special rules apply to certain 
loans and to home-relocation loans. See the sections called "Home-relocation 
loan" and "Exceptions" on the next page.

Include the benefit for employees under code 36 and in box 14 on the T4 slip. 
If you file a T4A for a shareholder, enter the benefit in box 28, "Other 
income."

There is no GST/HST on these benefits.

Payroll deductions
The taxable benefit for interest-free or low-interest loans is also 
pensionable. However, it is not insurable since it is a non-cash benefit. 
Deduct CPP contributions and income tax, but do not deduct EI premiums.

Loans received because of employment

An employee receives a taxable benefit if he or she receives a loan because of 
an office or employment or intended office or employment. We consider a loan 
received after February 23, 1998 to be received because of employment if it is 
reasonable to conclude that the loan would not have been received, or the 
conditions of the loan would have been different, had there been no employment 
or intended employment.

The loan can be received by the employee or by another person. A loan includes 
any other indebtedness such as the unpaid purchase price of goods or services.

The taxable benefit the employee receives in the taxation year is the total of 
the following two amounts:

a) the interest on each loan and debt calculated at the prescribed rate for 
the periods in the year during which it was outstanding; and

b) the interest on the loan or debt that was paid or payable for the year by 
you, the employer (for this purpose, an employer is a person or partnership 
that employed or intended to employ the individual and also includes a person 
related to the person or partnership);

minus the total of the following two amounts:

c) the interest for the year that any person or partnership paid on each loan 
or debt no later than 30 days after the end of the year; and

d) any part of the amount in b) that the employee pays back to the employer no 
later than 30 days after the end of the year.

Note
Sometimes these rules do not apply. For more information, see the section 
called "Exceptions" on the next page.

For information about similar taxable benefits resulting from loans received 
because of services performed by a corporation that carries on a personal 
services business, see Interpretation Bulletin IT-421, Benefits to 
Individuals, Corporations and Shareholders From Loans or Debt.

Example of calculating the taxable benefit
Joshua is your employee. He borrowed $150,000 from you on January 2, 2002. The 
prescribed rate of interest for the loan for 2002 is 3% for the first, third 
and fourth quarters and 2% for the second quarter. Joshua paid you $2,000 
interest on the loan no later than 30 days after the end of the year. During 
the year, a company related to you paid $1,000 interest on the loan for 
Joshua. Before the end of the same year, Joshua repaid the $1,000 to the 
company.


PAGE 19

Calculate the benefit to include in his income as follows:

a) Prescribed rate multiplied by loan amount for the year:
3% multiplied by $150,000 multiplied by three-quarters = $3,375
2% multiplied by $150,000 multiplied by one-quarter = $750
Total ($3,375 + $750) = $4,125
plus
b) Amount paid by a third party $1,000
($4,125 + $1,000) = $5,125
minus
c) Interest paid ($2,000 + $1,000) = $3,000
d) Amount Joshua repaid ($3,000 + $1,000) = $4,000
Joshua's taxable benefit ($5,125 minus $4,000) = $1,125

Loans received because of shareholdings

Loans received because of shareholdings are considered taxable benefits when 
the following three conditions are met:

- the loan is received by a person or partnership (except when the person is a 
corporation resident in Canada or the partnership is one in which each partner 
is a corporation resident in Canada);

- this person or partnership is:
- a shareholder of a corporation;
- connected with a shareholder of a corporation; or
- a member of a partnership or beneficiary of a trust that was a shareholder 
of a corporation; and

- because of these shareholdings, the person or partnership receives a loan 
from or incurs a debt to that corporation, a related corporation, or a 
partnership of which that corporation or any related corporation was a member.

If these conditions are met, the person or partnership (meaning, shareholder) 
received a benefit in the taxation year that is equal to:

- the interest on each loan and debt calculated at the prescribed rate for the 
period in the year during which it was outstanding;
minus
- the interest for the year that any party (for example, the person or 
partnership) paid on each loan or debt in the year, or no later than 30 days 
after the end of the year.

Note
A person includes an individual, a corporation, or a trust.

Home-purchase loan

A loan for a home purchase is any part of a loan to an employee that was used 
to get or repay another loan to get a dwelling to house that employee or a 
person related to that employee. This also applies to a shareholder or a 
person related to a shareholder.

To calculate the benefit for home-purchase loan, see the section called "Loans 
received because of employment" on page 18.

The amount of interest you calculate as a benefit should not be more than the 
interest that would have been charged at the prescribed rate in effect when 
the employee made the loan or incurred the debt.

If the term of repayment for a home-purchase loan is more than five years, the 
balance owing at the end of five years (from the day the loan was made) is 
considered a new loan. Treat the outstanding balance as a new loan on that 
date. To determine the benefit, use the prescribed rate in effect at that 
time.

Home-relocation loan

If you provided an employee or an employee's spouse or common-law partner with 
an interest-free or low-interest loan because the employee relocated to take 
up employment, see the section called "Home-relocation loans" on page 21.

Exceptions

There is no benefit to borrowers for loans they received because of an office, 
employment, or shareholding when one of the following occurs:

- The interest rate on the loan or debt equals, or is more than, the rate that 
two parties who deal with each other at arm's length would have agreed on when 
the debt arose. This is the rate that would apply on a commercial loan 
received other than through an office, employment, or shareholding. This 
exception does not apply if someone other than the borrower pays any part of 
the interest from the loan or debt.

- You include all or part of the loan (for example, a loan or debt forgiven in 
whole or in part) in the income of a person or partnership.

How do you report benefits on interest-free and low-interest loans?

If an employee receives a loan or incurs a debt because of employment, report 
the benefit under code 36 and in box 14 on a T4 slip.

If a person or partnership that was a shareholder (or was related to a 
shareholder) receives a loan or incurs a debt, you generally have to report 
the benefit on a T4A slip. Enter the amount in box 28, "Other income," on the 
borrower's T4A slip. In the footnotes area, enter: "Box 28, Benefit under 
subsection 80.4(2) $XXXX." In box 38, enter code 17.

Deductibility of deemed interest benefit

The taxable benefit you include in an individual's income is the borrower's 
interest expense for the year. If the borrower uses the funds to earn income 
from business, property, or employment, the borrower may be able to deduct 
this interest from income. You still have to include the full benefit in the 
earnings you report on the T4 or T4A slips.


PAGE 20

Prescribed rates of interest

The following chart shows the prescribed rates of interest for 2001 and 2002:

+++ Quarterly rates
First Quarter 2001 6%; 2002 3%
Second Quarter 2001 6%; 2002 2%
Third Quarter 2001 5%; 2002 3%
Fourth Quarter 2001 5%; 2002 3% +++

2.11 Medical expenses

If you pay for or provide an amount to pay for an employee's medical expenses 
in a taxation year, these amounts are considered to be a taxable benefit to 
the employee.

Generally, there is no GST/HST on this benefit. However, some medical expenses 
that qualify for the medical expense tax credit may be subject to GST/HST. In 
such a case, include the GST/HST in the value of the benefit. If you have any 
questions about how GST/HST applies in this case, contact any tax services 
office or tax centre.

For more information on qualifying medical expenses, see Interpretation 
Bulletin IT-519, Medical Expenses and Disability Tax Credits and Attendant 
Care Expense Deduction.

Payroll deductions
The taxable benefit for medical expenses is pensionable. Deduct CPP 
contributions and income tax.

If the taxable benefit is paid in cash, it is insurable. Deduct EI premiums. 
If it is a non-cash benefit, it is not insurable-do not deduct EI premiums.

2.12 Moving expenses and relocation benefits

When you transfer employees from one of your places of business to another, 
the amount you pay or reimburse employees for certain moving expenses is not a 
taxable benefit. This includes any amounts you incurred to move employees, the 
employees' families, and their household effects. This also applies when 
employees accept employment at different locations from the locations of their 
former residences.

Also, if you pay certain expenses to move employees, their families, and their 
household effects out of a remote work location when they have completed their 
employment duties there, the amount you pay is not a taxable benefit.

If you paid your employees allowances for incidental moving expenses that they 
do not have to account for, see the section called "Non-accountable 
allowances" on page 21.

Moving expenses paid by employer that are not a taxable benefit

The following expenses are not a taxable benefit to your employees if you paid 
or reimbursed them:

- the cost of house-hunting trips to the new location, which includes child 
and pet-care expenses while the employee is away;

- travelling costs (including a reasonable amount spent for meals and lodging) 
while the employee and members of the employee's household were moving from 
the old residence to the new residence;

- the cost to the employee of transporting or storing household effects while 
moving from the old residence to the new residence;

- costs to move personal items such as automobiles, boats, or trailers;

- charges and fees to disconnect telephones, television aerials, water, space 
heaters, air conditioners, gas barbecues, automatic garage doors, and water 
heaters;

- fees to cancel leases;

- the cost to the employee of selling the old residence (including 
advertising, notarial or legal fees, real estate commission, and mortgage 
discharge penalties);

- charges to connect and install utilities, appliances, and fixtures that 
existed at the old residence;

- adjustments and alterations to existing furniture and fixtures to arrange 
them in the new residence, which include plumbing and electrical changes in 
the new residence;

- automobile licences, inspections, and drivers' permit fees, if the employee 
owned these items at the former location;

- legal fees and land transfer tax to buy the new residence;

- the cost to revise legal documents to reflect the new address;

- reasonable temporary living expenses (up to 15 days) while waiting to occupy 
the new, permanent accommodation;

- long-distance telephone charges that relate to selling the old residence;

- amounts you paid or reimbursed for property taxes, heat, hydro, insurance, 
and grounds maintenance costs to keep up the old residence after the move, 
when all reasonable efforts to sell have not been successful;

- amounts you paid or reimbursed after February 23, 1998, and before January 
1, 2001, in respect of financing (such as higher mortgage interest payments at 
the new residence, bridge financing, and mortgage interest costs to keep up 
the old residence after the move) if:

- the assistance is paid in respect of an eligible relocation (when the 
employee moves to start employment in a new location and the new home is at 
least 40 kilometres closer to the new work location than the old home was); 
and


PAGE 21

- the employee started to work at the new work location before October 1998; 
and

- amounts you paid or reimbursed after February 23, 1998, and before January 
1, 2001, in respect of a housing loss (such as a loss on sale of the former 
residence or a decrease in its value) if:

- the loss was an eligible housing loss (a loss resulting from an eligible 
relocation); and

- the employee started to work at the new work location before October 1998.

Moving expenses paid by employer that are a taxable benefit

If you pay or reimburse moving costs that we do not list above, the amounts 
are generally considered a taxable benefit to the employee.

However, there is an exception for amounts paid after February 23, 1998, in 
respect of an eligible housing loss, if the employee started to work at the 
new work location after September 1998. Generally, in these situations, only 
one-half of the amount that is more than $15,000 is taxable.

If you compensated your employee with more than one payment spread over two 
years, you will need to include an amount on his or her T4 slips for both 
years. See the examples below to determine how to calculate the taxable part 
of the benefit.

Example 1
In March 2002, you compensated Clara, your employee, for a $40,000 loss she 
incurred on the sale of her house. The loss was an eligible housing loss. 
Clara started to work at her new workplace in June 2002. The taxable benefit 
you will report on Clara's 2002 T4 slip will be $12,500, calculated as 
follows:
One-half multiplied by ($40,000 minus $15,000)

Example 2
In June 2001, you agreed to compensate Paul, your employee, for any eligible 
housing loss that he incurred on the sale of his house. Paul started to work 
at his new work location on December 1, 2001.

Paul's eligible housing loss amounted to $65,000. You paid out the 
compensation in two payments: $30,000 in September 2001 and $35,000 in 
February 2002.

Paul's taxable benefit in 2001 was $7,500 (one-half of the amount paid in 2001 
that is more than $15,000).

Paul's taxable benefit in 2002 is $17,500. This is calculated as follows:

- one-half of the total of amounts paid in 2001 and 2002 that is more than 
$15,000 (one-half multiplied by [$65,000 minus $15,000] = $25,000);
minus
- the amount included in income in 2001 ($7,500).

If you do not reimburse, or only partly reimburse, employees for moving 
expenses, the employees may be able to claim some of the moving expenses as a 
deduction from income when filing their returns. For more information on the 
deduction for moving expenses that is available to your employees, see 
Interpretation Bulletin IT-178, Moving Expenses, and Form T1-M, Moving 
Expenses Deduction.

If a taxable benefit arises for moving expenses, include any applicable 
GST/HST in the value of this benefit.

Payroll deductions
Where the benefit is taxable, it is also pensionable. Deduct CPP contributions 
and income tax.

If the taxable benefit is paid in cash, it is insurable. Deduct EI premiums. 
If it is a non-cash benefit, it is not insurable-do not deduct EI premiums.

Non-accountable allowances

Allowances that employees do not have to account for are called non-
accountable allowances. We consider a non-accountable allowance for incidental 
relocation or moving expenses of $650 or less to be a reimbursement of 
expenses that employees incurred because of the move. Therefore, this type of 
allowance is not taxable. For us to consider it as a reimbursement for 
incidental expenses, employees have to certify in writing that they incurred 
expenses for at least the amount of the allowance, up to a maximum of $650.

Do not report the amount of the reimbursement. Report any part of the non-
accountable allowance that is more than $650 under code 40 and in box 14 on 
the T4 slip.

There is no GST/HST on these allowances.

Examples
- If your employee received a non-accountable allowance of $625 and certifies 
that he or she incurred expenses for the amount of the allowance, the employee 
will not be taxed on the amount received.

- If your employee received a non-accountable allowance of $750, and he or she 
can certify the expenses, the employee will be taxed on $100 only, which is 
the part of the amount that is more than $650.

Home-relocation loans

A home-relocation loan is a loan you give to an employee or an employee's 
spouse or common-law partner when he or she meets all the following 
conditions:

- the employee or the employee's spouse or common-law partner moves to start 
work at a new location in Canada;

- the employee or the employee's spouse or common-law partner uses the loan to 
buy a new residence that is at least 40 kilometres closer to the new work 
location than the previous home;

- the employee or the employee's spouse or common-law partner receives the 
loan because of the employee's employment;

- the employee designates the loan as a home-relocation loan; and


PAGE 22

- the loan is used to acquire a dwelling or a share of the capital stock of a 
co-operative housing corporation acquired for the sole purpose of acquiring 
the right to inhabit a dwelling owned by the corporation. The dwelling must be 
for the habitation of the employee and be his or her new residence.

To calculate the benefit for the home-relocation loan, see the section called 
"Loans received because of employment" on page 18. Include the amount of the 
taxable benefit in box 14 of the T4 slip and enter it under code 36.

The amount of interest you calculate as a benefit should not be more than the 
interest that would have been charged at the prescribed rate in effect when 
the employee made the loan or incurred the debt.

If the term of repayment for the home-relocation loan is more than five years, 
the balance owing at the end of five years (from the day the loan was made) is 
considered a new loan. Treat the outstanding balance as a new loan on that 
date. To determine the benefit, use the prescribed rate in effect at that 
time.

Exceptions
An interest benefit from a home-relocation loan paid before February 24, 1998, 
is not a taxable benefit for an employee if the following three conditions 
were met when the loan was taken:

- The employee was transferred to an area with higher housing costs.

- The employee owned a house just before relocating and bought a house at the 
new location.

- The amount of the loan was based on the market differential between the two 
locations for comparable houses.

Benefits resulting from loans taken or renewed after February 23, 1998 do not 
have to be included in the employee's income before the taxation year 2001, 
if:

- the loan was for an eligible relocation (when the employee moves to start 
employment in a new location and the new home is at least 40 kilometres closer 
to the new work location than the old home was); and

- the employee started to work at the new work location before October 1998.

Calculating the employee home-relocation loan deduction

When you include in an employee's income a taxable benefit the employee 
received because of employment for a home-relocation loan, he or she can 
deduct whichever of the following amounts is less:

- the benefit calculated for the home-relocation loan using the formula found 
in the section called "Loans received because of employment" on page 18;

- the interest (calculated at the prescribed rates) as if the home-relocation 
loan were for $25,000; or

- the benefit that you included in the employee's income for loans received 
because of employment in the year.

Enter the result under code 37 in the "Other information" area of the T4. This 
is the amount the employees can deduct on their returns as "Employee home-
relocation loan deduction."

Note
The deduction for the home-relocation loan is only available for the first 
five years of the loan.

2.13 Municipal officer's expense allowance

A municipal corporation or board may pay an expense allowance to an elected 
officer to perform the duties of that office.

If the expense allowance is more than one-third of the officer's salary and 
allowances, the excess amount is a taxable benefit. Enter it in box 14 and 
under code 40 on the T4 slip.

If the expense allowance is not more than one-third of the officer's salary 
and allowances, do not include this amount in the officer's income in box 14 
or under code 40.

In either of the above situations, you have to identify the non-taxable 
portion of the allowance by entering the corresponding amount under code 70 in 
the "Other information" area of the slip.

There is no GST/HST on this type of allowance.

For more information, see Interpretation Bulletin IT-292, Taxation of Elected 
Officers of Incorporated Municipalities, School Boards, Municipal Commissions 
and Similar Bodies.

Payroll deductions
Where the allowance is taxable, it is also pensionable. Deduct CPP 
contributions and income tax. An elected municipal officer's expense allowance 
is not insurable-do not deduct EI premiums.

2.14 Parking

Employer-provided parking generally constitutes a taxable benefit to the 
employee, whether or not the employer owns the lot. The amount of the benefit 
is based on the fair market value of the parking minus any payment the 
employee makes to use the space.

Include the GST/HST in the value of this type of benefit.

If you cannot determine the fair market value, do not add a benefit to the 
employee's remuneration. This could happen in the following situations:

- a business operates from a shopping centre or industrial park where parking 
is available to both employees and non-employees; or

- an employer provides scramble parking (meaning, there are fewer spaces than 
there are employees who require parking and the spaces are available on a 
first-come, first-served basis).

To determine if an employee has received a benefit, each case must be examined 
based on the facts. If the employee has a disability, the parking benefit is 
generally not taxable. See section 2.4, "Disability-related employment 
benefits."


PAGE 23

There is no taxable benefit for employees when the two following conditions 
are met:

- you provide parking to your employees for business purposes; and

- employees regularly have to use their own automobiles or ones you usually 
supply to perform their duties.

If you are not sure if employer-provided parking is a taxable benefit, contact 
your tax services office.

Payroll deductions
Where the benefit is taxable, it is also pensionable. Deduct CPP contributions 
and income tax.

If the taxable benefit is paid in cash, it is insurable. Deduct EI premiums. 
If it is a non-cash benefit, it is not insurable-do not deduct EI premiums.

2.15 Premiums under a private health services plan

If you make contributions to private health services plans (such as medical or 
dental plans) for employees, there is no taxable benefit to the employees.

For more information, see Interpretation Bulletin IT-339, Meaning of "Private 
Health Services Plan."

Payroll deductions
Do not deduct CPP contributions, EI premiums, or income tax from benefits you 
provide to employees under private health services plans.

2.16 Premiums under provincial hospitalization, medical care insurance, and 
certain Government of Canada plans

You may be paying premiums or contributing to a provincial hospital or medical 
care insurance plan for an employee. If this is the case, the amount you pay 
is considered a taxable benefit to the employee.

Also, if you are the former employer of an employee who has retired, any 
amount you pay as a contribution to a provincial health services insurance 
plan for the retired employee is a taxable benefit. Report this benefit in box 
28 of a T4A slip. In the footnotes area, enter: "Box 28, Medical premium 
benefit: $XXXX." In box 38, enter code 18. For more information, see 
Interpretation Bulletin IT-247, Employer's Contribution to Pensioners' 
Premiums Under Provincial Medical and Hospital Services Plans.

Any amount that the federal government pays for premiums under a hospital or 
medical care insurance plan for its employees and their dependants serving 
outside Canada is a taxable benefit. This also applies to dependants of 
members of the RCMP and the Canadian Forces serving outside Canada.

There is no GST/HST on this type of benefit.

As an employer, if you have to pay amounts (other than for the contribution or 
premiums that an employee has to make under the plan) to a provincial or 
territorial authority that administers a hospital or medical insurance plan, 
the payments you make are not considered to be a taxable benefit to employees.

Payroll deductions
Where the benefit is taxable, it is also pensionable. Deduct CPP contributions 
and income tax.

If the taxable benefit is paid in cash, it is insurable. Deduct EI premiums. 
If it is a non-cash benefit, it is not insurable-do not deduct EI premiums.

2.17 Professional membership dues

If you pay professional membership fees on behalf of your employees, there is 
no benefit to the employees if you are the primary beneficiary of the payment. 
A taxable benefit arises when the employee is the primary beneficiary of the 
payment.

Whether you or the employee is the primary beneficiary is a question of fact. 
If you pay or reimburse professional membership dues because membership in the 
organization or association is a condition of employment, we consider you to 
be the primary beneficiary-as a result, there is no taxable benefit to the 
employee.

When membership is not a condition of employment, the question of primary 
beneficiary still has to be resolved. As the employer, you are responsible for 
making this determination. You must be prepared to justify your position if we 
ask you to do so.

In all situations where you pay or reimburse an employee's professional 
membership dues and the primary beneficiary is the employee, there is a 
taxable benefit to the employee.

You have to include any applicable GST/HST in the value of such a benefit.

For more information, see our Technical News No. 15 and Interpretation 
Bulletin IT-158, Employees' Professional Membership Dues.

Note
You should advise your employees that they cannot deduct from their employment 
income professional fees paid or reimbursed by you.

Payroll deductions
Where the benefit is taxable, it is also pensionable. Deduct CPP contributions 
and income tax.

If the taxable benefit is paid in cash, it is insurable. Deduct EI premiums. 
If it is a non-cash benefit, it is not insurable-do not deduct EI premiums.

2.18 Recreational facilities

If you supply recreational facilities such as exercise rooms, swimming pools, 
and gymnasiums for all your employees' general use, the value of any benefit 
the employees receive when they use the facilities is not taxable. This 
applies whether you provide the facilities free of charge or for a fee, and 
whether you own the facilities or not.

If you supply recreational facilities to select groups or categories of 
employees for free or for a minimal fee while other employees have to pay the 
full fee, we consider that a


PAGE 24

taxable benefit is conferred to the employees who do not have to pay the full 
fee.

You usually have to include the value of meals, lodging, or both, as a taxable 
benefit in your employees' remuneration if you provided it at a property you 
own (for example, at a summer hotel, or hunting or fishing lodge you 
maintain).

Include the GST/HST in the value of this type of benefit.

Club dues

If you pay fees for your employees to be members of a social or athletic club 
and it is clear that these memberships are mainly to your advantage, the fees 
you pay are not taxable benefits for the employees.

There is no GST/HST on club dues.

For more information, see interpretation bulletins IT-470, Employees' Fringe 
Benefits, and its Special Release, and IT-148, Recreational Properties and 
Club Dues.

Payroll deductions
Where the benefit is taxable, it is also pensionable. Deduct CPP contributions 
and income tax.

If the taxable benefit is paid in cash, it is insurable. Deduct EI premiums. 
If it is a non-cash benefit, it is not insurable-do not deduct EI premiums.

2.19 Registered retirement savings plans (RRSPs)

Contributions you make to an employee's RRSP and RRSP administration fees that 
you pay on behalf of your employee are considered to be a taxable benefit to 
the employee. This does not include an amount you withheld from the employee's 
remuneration and contributed for the employee.

GST/HST may apply to the administration fees.

Payroll deductions
RRSP taxable benefits are pensionable and insurable. Deduct CPP contributions 
and EI premiums. Although the benefit is taxable and has to be reported on the 
T4 slip, you do not have to deduct income tax at source on the contributions 
you make to employees' RRSPs. However, you must have reasonable grounds to 
believe that the employee can deduct the contribution for the year.

2.20 Spouse or common-law partner's travelling expenses

If a spouse or common-law partner accompanies an employee on a business trip, 
the amount you reimburse the employee for the spouse or common-law partner's 
travelling expenses is a taxable benefit to the employee.

If GST/HST applies to the travelling expenses, you have to include it in the 
value of the benefit.

The reimbursement is not considered a taxable benefit if the spouse or common-
law partner went at your request and was mostly engaged in business activities 
during the trip.

For more information, see Interpretation Bulletin IT-131, Convention Expenses.

Payroll deductions
Where the benefit is taxable, it is also pensionable. Deduct CPP contributions 
and income tax.

If the taxable benefit is paid in cash, it is insurable. Deduct EI premiums. 
If it is a non-cash benefit, it is not insurable-do not deduct EI premiums.

2.21 Stock options

When a corporation agrees to sell or issue its shares to employees, or when a 
mutual fund trust grants options to employees to acquire trust units, the 
employees may receive a taxable benefit. The taxable benefit is the difference 
between the fair market value of the shares or units when the employees 
acquire them and the amount paid, or to be paid, for them, including any 
amount paid for the rights to acquire the shares or units. In addition, a 
benefit can accrue to the employees if their rights under the agreement become 
vested in another person, or if they transfer or sell the rights.

There is no GST/HST on this benefit.

Include this benefit in box 14 and report it under code 38 on the T4 slip. 
Also, make sure to indicate the deductions the employee is entitled to in the 
"Other information" area of the T4 slip, as explained in the rest of this 
section. If the employee is allowed, and chooses, to defer the taxable benefit 
until he or she disposes of the eligible security, follow the instructions 
under "Deferred stock option benefit" below.

For more information on stock options and shares, see Interpretation Bulletin 
IT-113, Benefits to Employees - Stock Options.

Payroll deductions
The stock option taxable benefit is pensionable. Deduct CPP contributions and 
income tax.

Since this is a non-cash benefit, it is not insurable-do not deduct EI 
premiums.

Deferred stock option benefit

After February 27, 2000, an eligible employee who exercises stock options can 
defer the taxable benefit to be included in income until whichever of the 
following comes first:
- the year in which he or she disposes of the shares;
- the year in which he or she dies; or
- the year in which he or she becomes a non-resident.

To be considered a qualifying acquisition, the following conditions must be 
met:

- the stock options must be to get eligible publicly-listed shares or units of 
mutual fund trust;

- the conditions under paragraph 110(1)(d) for the shares deduction must be 
met. See "Paragraph 110(1)(d)" on page 25; and

- the employee is not, immediately after the option is granted, a specified 
shareholder of the employer, the


PAGE 25

entity granting the option, or the entity whose securities could be acquired 
under the option.

A specified shareholder is generally a person who directly or indirectly owns 
10% or more of the issued shares of any class of the capital stock of the 
corporation or any related corporation.

To be eligible to defer the amount of the benefit, the employee must meet the 
following conditions:

- he or she must file an election, in the form of a letter, with the person 
who would be required to file an information return for the acquisition before 
January 16 of the year following the year in which the options are exercised;

- he or she must be a resident of Canada at the time the options are 
exercised; and

- the specified value of the security must not be more than the $100,000 
annual vesting limit.

The $100,000 limit applies to the value of the stock options that first become 
exercisable by the employee each year and across all stock options offered by 
the employer. The value of the stock options is the fair market value of the 
share at the time the option is granted.

The employee can revoke his or her election before January 16 of the year 
following the year in which the options are exercised by filing a written 
revocation to the election with the person with whom the election was filed. 
If the election is revoked, the election is deemed never to have been made.

The employee also has to complete and file Form T1212, Statement of Deferred 
Stock Option Benefits, with his or her income tax return for each year he or 
she has a balance of deferred stock option benefits outstanding.

You have to accept the employee election to defer the benefit and accept the 
revocation.

Report the amount of the deferred benefit in the "Other information" area of 
the T4 slip under code 53. Do not include this amount in box 14 or under code 
38 on the T4 slip.

Payroll deductions
The stock option benefit that is deferred for income tax purposes is 
pensionable. Deduct CPP contributions.

Since this is a non-cash benefit, it is not insurable-do not deduct EI 
premiums.

Paragraph 110(1)(d)

Generally, the employee receives the benefit in the same year he or she 
acquired the shares or units. The employee can claim a deduction under 
paragraph 110(1)(d) of the Income Tax Act if the following conditions are met:

- a corporation agreed to sell or issue to the employee a share of its capital 
stock or the capital stock of another corporation that it does not deal with 
at arm's length, or agreed to sell or issue units of a mutual fund trust;

- the employee dealt at arm's length with these corporations right after the 
agreement was made;

- the share was a prescribed share (as defined in the Income Tax Regulations) 
when issued or sold; and

- the price of the share or unit is not less than its fair market value when 
the agreement was made.

The deduction the employee can claim is one-half of the amount of the benefit 
that arises because shares were acquired or when rights for shares were 
transferred or otherwise disposed of. Identify the amount of the deduction by 
entering it under code 39 on the T4 slip.

Note
The effect of foreign exchange gains and losses is irrelevant when determining 
if an individual is eligible for the stock option and shares deduction.

Paragraph 110(1)(d.1)

The employee receives the benefit in the year the employee disposes of the 
shares, and not in the year the employee acquires them if:

- when the agreement to sell or issue shares to the employee was concluded, 
the issuing or selling corporation was a Canadian-controlled private 
corporation;

- the employee acquired shares after May 22, 1985; and

- the employee dealt at arm's length with the corporation or any other 
corporation involved right after the agreement was concluded.

In this case, the employee can claim a deduction under paragraph 110(1)(d.1) 
of the Income Tax Act if:

- the shares are disposed of in the year;

- the employee did not dispose of the shares within two years of acquiring 
them; and

- the employee did not deduct an amount under paragraph 110(1)(d) for the 
benefit.

The deduction the employee can claim is one-half of the amount of the benefit 
for shares disposed of. Identify the amount of the deduction by entering it 
under code 41 on the T4 slip.

Note
Arm's length refers to parties that are not related in any way, other than as 
employer and employee.

2.22 Subsidized meals

If you provide subsidized meals to an employee (for example, in an employee 
dining room or cafeteria), these meals are not considered a taxable benefit if 
the employee pays a reasonable charge. A reasonable charge is one that covers 
the cost of the food, its preparation, and service.

If the charge is not reasonable, the value of the benefit is the cost of the 
meals minus any payment the employee makes. Include the taxable benefit in box 
14 and under code 30 on the employee's T4 slip.

If GST/HST applies on subsidized meals, include it in the value of the 
benefit. You have to include that amount in the employee's income without 
considering any amounts he or she reimbursed you.


PAGE 26

Payroll deductions
Where the subsidized meals benefit is taxable, it is also pensionable. 
However, since it is a non-cash benefit, it is not insurable. Deduct CPP 
contributions and income tax, but do not deduct EI premiums.

Overtime meal allowances

If you provide overtime meals, or a reasonable allowance for overtime meals, 
we consider that there is no taxable benefit in the following circumstances:

- the employee works three or more hours of overtime right after his or her 
scheduled hours of work; and

- the overtime is infrequent and occasional in nature (less than three times a 
week).

If overtime occurs on a frequent basis (more than twice a week), we consider 
the overtime meal allowances to be a taxable benefit since they start to take 
the character of additional remuneration. Include the taxable benefit in box 
14 and under code 40 on the employee's T4 slip.

Payroll deductions
Where the allowance is taxable, it is also pensionable and insurable. Deduct 
CPP contributions, EI premiums, and income tax.

2.23 Subsidized school services

In remote areas, employers are often responsible for essential community 
services that municipalities usually provide. If you provide free or 
subsidized school services for your employees' children, the employees do not 
receive a taxable benefit. Do not deduct CPP contributions, EI premiums, or 
income tax on these amounts.

This does not include an educational allowance you pay directly to your 
employees, as we explained in section 2.6, "Educational allowances for 
children."

2.24 Transportation to the job

For security or other reasons, there are times when public and private 
vehicles are neither allowed nor practical at an employment location. As a 
result, you may need to provide your employees with transportation from pick-
up points to that location. This transportation is not a taxable benefit. Do 
not deduct CPP contributions, EI premiums, or income tax from these amounts. 
For more information, see section 2.2, "Board, lodging, and transportation at 
special work sites and remote work locations."

2.25 Travelling allowances

Part-time employee

If you give a part-time employee a reasonable allowance or reimburse the 
employee for travelling expenses to and from a part-time job, you do not have 
to include the amount in the employee's income. This applies as long as:

- you and the part-time employee are dealing at arm's length;

- during the period the part-time employee incurred the expenses, he or she 
had other employment or carried on a business; and

- the part-time employee did the duties at a location no less than 80 
kilometres from both the employee's home and principal place of employment or 
business.

For more information, see paragraph 54 in Interpretation Bulletin IT-522, 
Vehicle, Travel and Sales Expenses of Employees.

Payroll deductions
Where the allowance is taxable, it is also pensionable and insurable. Deduct 
CPP contributions, EI premiums, and income tax.

\\\ Other employee

A travel allowance for expenses other than for the use of a motor vehicle (for 
example, meals, lodging, per diem allowance), has to be included in the 
employee's income if the employee is neither:

- an agent selling property or negotiating contracts on behalf of the 
employer; or

- a member of the clergy.

You have to include the travelling allowances in the employee's income unless 
it is a reasonable allowance received by the employee for:

- travelling away from the municipality and the metropolitan area where the 
employer's establishment is located and where the employee ordinarily works or 
reports; and

- travelling in the performance of the duties of the office or employment.

For more information, see paragraph 48 in Interpretation Bulletin IT-522, 
Vehicle, Travel and Sales Expenses of Employees.

Payroll deductions
Where the allowance is taxable, it is also pensionable and insurable. Deduct 
CPP contributions, EI premiums, and income tax. \\\

2.26 Tuition fees, scholarships, and bursaries

We have developed guidelines on employer-paid educational costs to help you 
determine if there is a taxable benefit for your employees.

When the training is mainly for your benefit, there is no taxable benefit 
whether or not the training leads to a degree, diploma, or certificate. A 
taxable benefit arises when the training is mainly for the employee's benefit.

The guidelines consider three broad categories of training:

- Specific employment-related training
We generally consider that courses taken to maintain or upgrade employment-
related skills are mainly for your benefit when it is reasonable to assume 
that the employee will resume his or her employment for a reasonable period of 
time after he or she completes the course.

For example, tuition fees and other associated costs such as books, meals, 
travel, and accommodation that you pay for courses leading to a degree, 
diploma, or certificate in


PAGE 27

a field related to your employee's current or future responsibilities in your 
business are not a taxable benefit.

- General employment-related training
We generally consider that other business-related courses, although not 
directly related to your own business, are taken mainly for your benefit.

For example, fees you pay for stress management, employment equity, first-aid, 
and language courses are not a taxable benefit.

- Personal interest training
We consider that courses for personal interest or technical skills not related 
to your business are taken mainly for the employee's benefit and therefore are 
a taxable benefit.

If the tuition fees you paid (or reimbursed) your employee are a taxable 
benefit according to the guidelines above, you have to include the amount in 
the employee's income for the year you made the payment.

If you paid (or reimbursed) tuition fees to employees and there is no taxable 
benefit according to the guidelines above, the employees are not entitled to 
claim the non-refundable tuition credit on their return for those fees. They 
cannot claim the education amount either. You should inform them of this.

Tuition fees, books, and supplies you paid or reimbursed for a person related 
to your employee may also be a taxable benefit for the employee for the year 
you made the payment.

A student, during or right after employment with you, may arrange with you to 
receive a scholarship or bursary from you on condition that the student 
returns to your employment. In this situation, the amount of the scholarship 
or bursary is the student's employment income.

If, as part of an educational institution, you provide free tuition to 
employees or their spouses or common-law partners or children, include the 
benefit's fair market value in the employees' income.

Certain tuition fees may be subject to GST/HST. If paying or providing tuition 
fees results in a taxable benefit for an employee and the fees are subject to 
GST/HST, include GST/HST in the value of the benefit.

For more information, see our Technical News Number 13 and interpretation 
bulletins IT-75, Scholarships, Fellowships, Bursaries, Prizes, and Research 
Grants, IT-470, Employees' Fringe Benefits, and its Special Release, IT-516, 
Tuition Tax Credit, and Information Circular 75-23, Tuition Fees and 
Charitable Donations Paid to Privately Supported Secular and Religious 
Schools.

Payroll deductions
Where the benefit is taxable, it is also pensionable. Deduct CPP contributions 
and income tax.

If the taxable benefit is paid in cash, it is insurable. Deduct EI premiums. 
If it is a non-cash benefit, it is not insurable-do not deduct EI premiums.

2.27 Uniforms and special clothing

Employees do not receive a taxable benefit when:

- you supply them with a distinctive uniform they have to wear while they 
carry out their employment duties; or

- you provide them with special clothing (including safety footwear) designed 
to protect them from hazards associated with the employment.

When you pay an accountable allowance (where receipts are required) to 
employees to buy uniforms or protective clothing, this amount is considered to 
be a reimbursement of expenses and not a taxable benefit.

If you reimburse your employees for the cost of protective clothing they 
bought and they did not have to support their purchases with receipts, the 
reimbursement is a non-taxable benefit if:
- the law requires employees to wear the protective clothing on the work site; 
- employees bought the protective clothing; and
- the amount of the reimbursement is reasonable.

If these three conditions are not met, the payments are a taxable benefit.

Include the GST/HST in the value of this type of benefit.

You may pay a laundry or dry cleaner to clean uniforms and clothing for your 
employees or you may pay a reasonable allowance to your employees (when they 
do not have to provide a receipt). You may also reimburse the employees for 
these expenses when they present a receipt. If you do either of these, the 
amounts you pay are not taxable benefits for the employees.

Payroll deductions
Where the benefit is taxable, it is also pensionable. Deduct CPP contributions 
and income tax.

If the taxable benefit is paid in cash, it is insurable. Deduct EI premiums. 
If it is a non-cash benefit, it is not insurable-do not deduct EI premiums.

2.28 Wage-loss replacement plans or income maintenance plans

If you pay a premium to a wage-loss replacement plan or an income maintenance 
plan for an employee, the premium is a taxable benefit if you pay it to a non-
group plan that is:
- a sickness or accident insurance plan;
- a disability insurance plan; or
- an income maintenance insurance plan.

However, if you pay a premium for an employee for such plans that are group 
plans, the premium is not a taxable benefit for the employee.

There is no GST/HST on this type of benefit.

For more information, see Interpretation Bulletin IT-428, Wage Loss 
Replacement Plans.


PAGE 28

Payroll deductions
Where the benefit is taxable, it is also pensionable. Deduct CPP contributions 
and income tax. Since this is a non-cash benefit, it is not insurable-do not 
deduct EI premiums.

Group disability benefits - Insolvent insurer

Under subsection 6(17) of the Income Tax Act, a top-up disability payment 
includes a payment made by an employer directly to an individual to replace 
all or part of the periodic payments that, because of an insurer's insolvency, 
are no longer being made to the individual under a disability policy for which 
the employer made contributions. This treatment allows the continued deduction 
of contributions made by the employee to be considered in determining the 
amount to be included in the employee's income from employment under paragraph 
6(1)(f). This applies to any top-up disability payment made after August 10, 
1994.

A disability policy is a group disability insurance policy that provides 
periodic payments to individuals for lost employment income.

For more information, contact your tax services office.

Chapter 3 - Housing and Travel Assistance Benefits Paid in a Prescribed Zone

This chapter applies to you if you meet both of the following conditions:

- you are an employer or a third-party payer who provides employment benefits 
for board, lodging, transportation, or travel assistance; and

- you provide these benefits to employees who work or live in locations that 
are in prescribed zones for purposes of the northern residents deductions.

The publication called Northern Residents Deductions - Places in Prescribed 
Zones (T4039) contains a list of places in prescribed northern zones and 
prescribed intermediate zones.

This chapter does not apply to you if your employees are at a special work 
site or a remote work location that is not in a prescribed zone. These 
situations are covered in section 2.2, "Board, lodging, and transportation at 
special work sites and remote work locations."

3.1 Accommodation or utilities provided by the employer

If you provide accommodation or utilities free of charge to your employees, 
the method you use to determine the value of the benefit depends on whether or 
not the place in a prescribed zone has a developed rental market.

Places with developed rental markets

Some cities and towns in prescribed zones have developed rental markets. When 
that is the case, you base the value of any rent or utility you provide on its 
fair market value.

The cities and towns in prescribed zones that have developed rental markets 
are:

Whitehorse
Yellowknife
Dawson Creek
Fort McMurray
Grande Prairie
Thompson
Labrador City
Wabush
Fort St. John

Places without developed rental markets

In places in prescribed zones without developed rental markets, you have to 
use other methods to set a value on the housing benefit. The method you use 
depends on whether you own the dwelling or rent it from a third party.

If you provide both rent and utilities, and can calculate their cost as 
separate items, you have to determine their value separately. Then add both 
items to get the value of the housing benefit. If your employee reimburses you 
for all or part of his or her rent or utilities, determine the benefit as 
explained below. Then subtract any amount reimbursed by your employee and 
include the amount that remains in his or her income.

Dwellings you own

If you own the dwelling that you provide rent-free to your employee, report as 
rent whichever of the following amounts is less:
- the fair market value of the rent; or
- the ceiling amount.

If you provide utilities using equipment that you own (for example, 
electricity from a generator), report as utilities whichever of the following 
amounts is less:
- the fair market value of the utilities; or
- the ceiling amount.

Dwellings you rent from a third party

If you rent a dwelling from a third party and provide it rent-free to your 
employee, report as rent whichever of the following amounts is less:
- the amount you pay the third party; or
- the ceiling amount.

Similarly, the amount you have to report for utilities is whichever of the 
following amounts is less:
- the amount you pay the third party; or
- the ceiling amount.

Allowable ceiling amounts

There are allowable ceiling amounts for different types of accommodation. 
These ceiling amounts can help determine the value of the housing benefit that 
you provide in places in prescribed zones that do not have developed rental 
markets.


PAGE 29

They are considered to include any applicable GST/HST, so you do not have to 
calculate this amount. If the amount of the housing benefit you report is 
based on the fair market value, you have to calculate and report any GST/HST 
that applies. If the total of the fair market value plus the applicable 
GST/HST is more than the allowable ceiling amount, report the allowable 
ceiling amount as the housing benefit.

The publication called Ceiling Amounts for Housing Benefits Paid in Prescribed 
Zones, which we update each year, lists the ceiling amounts for rent and 
utilities.

Note
If more than one employee occupies the same dwelling, prorate the housing 
benefit for the number of occupants in the dwelling.

3.2 Board, lodging, and transportation at a special work site

If an employee received a benefit or an allowance for working at a special 
work site that is excluded from income, this amount may affect his or her 
claim for the northern residency deduction.

You have to identify, on the employee's T4 or T4A slip, any portion of the 
excluded board and lodging benefit or allowance that the employee received for 
duties performed at a special work site that was within 30 kilometres of the 
nearest urban area with a population of at least 40,000 people (the 30-
kilometres portion), if the employee:

- worked at a special work site in a place in a prescribed zone; and

- maintained his or her principal place of residence in a place outside a 
prescribed zone.

Enter the 30-kilometres portion of the excluded amount under code 31 on the T4 
slip.

If you are a third-party payer and are completing a T4A slip for the employee 
of another employer, enter "Special work site in a prescribed zone" and the 
amount of the 30-kilometres portion of the excluded benefit in the footnotes 
area.

You have to do this even though you did not include the excluded amount in 
income. This way, the employee will have all the information required to 
correctly calculate his or her residency deduction.

Example
You paid your employee $4,000 for board and lodging at a special work site 
that is in a prescribed zone. You and the employee completed Form TD4, 
Declaration of Exemption - Employment at Special Work Site. Since the benefit 
is not included as income, you did not enter the amount of the benefit under 
code 30 or in box 14 of the T4 slip.

Of the $4,000 you paid, $1,200 relates to a special work site that was located 
27 kilometres from a town with a population of 43,000 people (the 30-
kilometres portion). You have to enter $1,200 under code 31 on the employee's 
T4 slip, even though it was not entered under code 30. The employee will then 
enter $1,200 on his or her form T2222, Northern Residents Deductions.

Note
An amount that is not included as income for allowances at a remote work 
location does not affect the employee's claim for the northern residency 
deduction.

3.3 Travel assistance benefits

If you provide an employee with travel assistance in a prescribed zone, the 
benefit is taxable unless it was for business travel. The travel assistance 
could be for such things as vacation, bereavement, medical, compassionate 
reasons, etc.

If employees travel using transportation that you own or charter, determine 
the value of the benefit by assigning a fair market value to the 
transportation.

When employees travel by some means other than air, the cost of travel may 
include automobile expenses, meals, hotel and motel accommodation, camping 
fees, taxi fares, and road and ferry tolls.

When you give employees travel assistance benefits other than cash or 
refundable tickets (for example, travel warrants, vouchers, or non-refundable 
tickets), the employees do not receive any benefit until they or members of 
their household take the trip. The benefit is income of the employees in the 
year the trip starts, and you should report it in that year.

There are many ways of providing travel assistance benefits. You can pay 
employees a travel allowance before the trip, such as a certain amount per 
hour, or on some other periodic basis. You can also make lump-sum payments to 
your employees before or after the trip is taken. You should report such 
payments in your employees' income in the year they receive them, no matter 
when your employees or members of their household travel.

You have to report these benefits in box 14 and under code 32 on the T4 slip.

If you are a third party who supplies travel benefits to the employee of 
another employer, report these benefits in box 28 of a T4A slip.

An employee who qualifies for the northern residents travel deduction will use 
this amount to calculate his or her claim. The number of trips an employee can 
claim is limited to two per year, unless the trips were for medical reasons. 
Therefore, you have to show the value of the medical travel benefits 
separately on the slip, as explained in the next section.

Medical travel assistance

Medical travel includes any trip employees or members of their household take 
to get medical services that are not available in the area where they live. 
Medical travel benefits are considered to be the cost of transportation from 
the place in a prescribed zone to the place where medical treatment is 
available. Medical travel includes the transportation cost of an attendant if 
the patient needs one while travelling.

You have to identify the value of medical travel benefits you provide to 
employees. Enter under code 33 on the


PAGE 30

T4 slip the medical portion of the travel assistance that you reported under 
code 32. In the footnotes area of the T4A slip, enter "Box 28, medical 
travel," and the medical portion of the travel assistance that you reported in 
box 28. In box 38, enter code 16.

This way, we will know which portion, if any, of the amount you reported under 
code 32 of a T4 slip or in box 28 of a T4A slip is for medical travel. If you 
do not identify which portion of the benefit was for medical travel, we will 
consider all travel assistance as vacation (or other) travel and the employee 
will not be entitled to claim a deduction for medical travel. In addition, we 
will limit the employee's deduction, as well as that of the members of the 
household, to two trips each.

Note
Amounts you pay or reimburse employees for medical travel or any associated 
cost under the terms of a private health services plan are not taxable 
benefits. You may have to make such payments because of an obligation you have 
under a collective agreement. If this is the case, you should not report them 
on employees' T4 slips.

3.4 Payroll deductions

Travel assistance benefits

When travel assistance benefits are in the form of non-refundable tickets or 
travel vouchers, you do not have to make payroll deductions. However, when you 
give travel assistance in the form of cash, we consider it to be a cash 
advance, and you have to make payroll deductions.

We may waive the requirement for you to deduct tax from the full payment 
received by an employee who lives in a prescribed northern zone (or from 50% 
of the payment received by an employee who lives in a prescribed intermediate 
zone) if the employee agrees in writing, when he or she receives the payment, 
to use it entirely for vacation or medical travel. If the employee does not 
agree, you have to deduct income tax. These cash payments are pensionable and 
insurable whether or not you make tax deductions. This means you have to 
deduct Canada Pension Plan contributions and Employment Insurance premiums 
whether or not we have waived the requirement to deduct tax.

Form TD1, Personal Tax Credits Return

Employees who live in a prescribed zone during a continuous period of at least 
six months (that begins or ends in the taxation year) may be entitled to claim 
a residency deduction when filing their return. As a result, these employees 
may request a reduction in payroll deductions by completing the back of Form 
TD1, Personal Tax Credits Return.

The residency deduction is equal to whichever is less:
- one-fifth (or 20%) of their net income for the year; or
- the residency amount they can claim.

Note
Employees cannot claim a residency amount for both the principal place of 
residence and the special work site for the same period, even if they are both 
located in prescribed zones.

For 2002, employees living in a prescribed northern zone can claim the total 
of:

- a basic residency amount of $7.50 per day for each day they live in the 
prescribed northern zone; and

- an additional residency amount of $7.50 per day for each day they live in 
and maintain a dwelling in that area, if during that time no one else is 
claiming a basic residency amount for living in the same dwelling for the same 
period.

For 2002, employees living in a prescribed intermediate zone can claim 50% of 
the total of the above amounts.

Note
Employees who receive board and lodging benefits from employment at a special 
work site in a prescribed zone have to reduce their residency amount by the 
value of the 30-kilometres portion of the benefit they receive if they 
maintain a principal residence that is not in a prescribed zone. The 30-
kilometres portion of the excluded benefit will be shown under code 31 of the 
T4 slip. See section 3.2, "Board, lodging, and transportation at a special 
work site," for details.

To calculate the amount of tax you should deduct if an employee is claiming a 
residency deduction on Form TD1:

- reduce the residency amount by 50% if the employee lives in a prescribed 
intermediate zone (if the conditions in the above note apply, reduce the 
residency amount by the 30-kilometres portion of the excluded board and 
lodging benefits from employment at a special work site);

- divide the employee's net deduction for the year (amount on the back of the 
TD1 form minus the above adjustments) by the number of pay periods in the 
year;

- subtract the result from their gross earnings for each pay period; and

- refer to the tax tables that apply.

Chapter 4 - Remitting GST/HST on Employee Benefits

You should read this chapter if you are a GST/HST registrant. It will help you 
familiarize yourself with the GST/HST treatment of employee benefits.

If you are not a GST/HST registrant, you do not have to read this chapter.

The Canada Customs and Revenue Agency is responsible for administering 
GST/HST. However, as a result of an agreement between the governments of 
Canada and Quebec, the ministère du Revenu du Québec (MRQ) administers GST/HST 
in that province. If your business is located in Quebec, contact an MRQ office 
for information on the GST/HST treatment of employee benefits.


PAGE 31

4.1 Employee benefits

Salaries, wages, commissions, and other cash remuneration, including 
gratuities, you pay to employees are not subject to GST/HST. However, non-
monetary means of compensating employees, commonly referred to as fringe or 
employee taxable benefits, may be subject to GST/HST.

For the most part, the GST/HST treatment of these benefits is based on their 
treatment under the Income Tax Act. Generally, if a benefit is taxable for 
income tax purposes, you will be considered to have made a supply of a good or 
service to the employee. If the goods or service that gives rise to the 
taxable benefit is subject to GST/HST, you are considered to have collected 
GST/HST on that benefit. However, there are situations where you will not be 
considered to have collected GST/HST on taxable benefits given to employees. 
We explain these situations in the following section.

4.2 Situations where you are not considered to have collected GST/HST

You are not considered to have collected GST/HST on taxable benefits provided 
to employees in the following situations:

- when the goods or services that give rise to a taxable benefit are GST/HST-
exempt or zero-rated;

- when a taxable benefit results from an allowance included in the income of 
the employee under paragraph 6(1)(b) of the Income Tax Act, such as an 
unreasonable allowance for automobile expenses; and

- when you are restricted from claiming an input tax credit (ITC) for the 
GST/HST you paid or owe on the goods and services which give rise to the 
taxable benefit (see the section called "ITC restrictions" on page 32).

In addition, if the taxable benefit is for the standby charge of an automobile 
or aircraft, you are not considered to have collected GST/HST on this benefit 
in the following situations:

- you are an individual or partnership and the passenger vehicle or the 
aircraft that you have bought is used less than 90% in the commercial 
activities of the business;

- you are not an individual, a partnership, or a financial institution and the 
passenger vehicle or aircraft that you bought is used 50% or less in the 
commercial activities of the business;

- you are a financial institution and elect to treat the passenger vehicle or 
aircraft you lease or have bought as being used exclusively in non-commercial 
activities of the business*; or

- you are not a financial institution and you lease the passenger vehicle or 
aircraft which you use 50% or more in non-commercial activities of the 
business, and you elect to treat it as being used 90% or more in such non-
commercial activities.

Note*
To make this election, complete Form GST30, Election for Passenger Vehicles or 
Aircraft to be Deemed to be Used Exclusively in Non-Commercial Activities, or 
state in writing the information required on the form. You do not have to file 
this form or statement, but you must keep it with your records for audit 
purposes. For more information about this election, see GST Memorandum 400-3-
2-1, Automobile Benefits, or contact any tax services office or tax centre.

4.3 When are you considered to have collected GST/HST?

You are considered to have collected GST/HST on a taxable benefit subject to 
GST/HST at the end of February in the year following the year in which you 
provided the benefit to the employee. This corresponds with the deadline for 
calculating employee taxable benefits for income tax purposes and for issuing 
T4 slips. For example, for taxable benefits you provided to your employees 
during the 2002 taxation year, you are considered to have collected GST/HST at 
the end of February 2003. You have to include this amount in your GST/HST 
return for the reporting period that includes the last day of February 2003.

Example
You are a GST/HST registrant and have a monthly reporting period. At the end 
of February 2003, you calculated the total taxable benefits provided to your 
employees for 2002, including any GST and PST, or HST. You are considered to 
have collected GST/HST on the taxable benefits at the end of February 2003. In 
your February 2003 GST/HST return, you have to include the GST/HST relating to 
the taxable benefits provided to your employees in 2002. You have to file this 
return by the end of March 2003.

4.4 How do you calculate the amount of GST/HST you are considered to have 
collected?

The amount of GST/HST you are considered to have collected on a taxable 
benefit is calculated as a percentage of the value of the benefit for GST/HST 
purposes.

Value of the benefit for GST/HST purposes

The value of the benefit for GST/HST purposes is the total of the following 
two amounts:

- the amount reported on the T4 or T4A slip for the benefit; and

- if the taxable benefit is for a standby charge or operating cost of an 
automobile, the amount, if any, that the employee or the employee's relative 
reimbursed you for that benefit.

Notes
When an employee or an employee's relative has reimbursed an amount equal to 
the entire taxable benefit for a standby charge or operating cost of an 
automobile and, as a result, no benefit is reported on the T4 slip, the value 
of the benefit for GST/HST purposes is equal to the amount of the 
reimbursement.


PAGE 32

However, when an employee or an employee's relative has reimbursed an amount 
for a taxable benefit other than for a standby charge or operating cost of an 
automobile, you are considered to have collected an amount equal to 7 over 107 
of GST or 15 over 115 of HST on this reimbursement. In this situation, you 
have to include GST/HST relating to this reimbursement in your GST/HST return 
for the reporting period that includes the date of the reimbursement.

Amount of GST/HST considered to be collected

The amount of GST/HST considered to be collected depends on whether or not it 
is calculated for an automobile operating cost benefit.

Automobile operating cost benefits

If the last establishment where your employee ordinarily worked or to which he 
or she ordinarily reported in the year is located in a participating province 
(meaning, Newfoundland and Labrador, Nova Scotia, or New Brunswick), the 
amount of HST considered to be collected is equal to 11% of the value of the 
benefit for GST/HST purposes as calculated above.

If the last establishment where your employee ordinarily worked or to which he 
or she ordinarily reported in the year is located in a non-participating 
province (meaning, the rest of Canada), the amount of GST considered to be 
collected is equal to 5% of the value of the benefit for GST/HST purposes.

Benefits other than automobile operating cost

If the last establishment where your employee ordinarily worked or to which he 
or she ordinarily reported in the year is located in a participating province 
(meaning, Newfoundland and Labrador, Nova Scotia, or New Brunswick), the 
amount of HST considered to be collected is equal to 14 over 114 of the value 
of the benefit for GST/HST purposes as calculated above.

If the last establishment where your employee ordinarily worked or to which he 
or she ordinarily reported in the year is located in a non-participating 
province (meaning, the rest of Canada), this amount is equal to 6 over 106 of 
the value of the benefit for GST/HST purposes.

4.5 Input tax credits (ITCs)

As a registrant, you can claim an ITC to recover the GST/HST you paid or owe 
on the purchases and operating expenses related to your commercial activities. 
Generally, commercial activities include the supply of taxable goods and 
services. Taxable goods and services are those that are taxable at the rates 
of 15%, 7%, and 0%. For more information about what are considered to be 
commercial activities, see the guide called General Information for GST/HST 
Registrants.

For employee benefits, you can usually claim an ITC for the GST/HST you paid 
or owe on goods and services you supply to your employees or their relatives 
as a benefit related to your commercial activities. However, in some 
situations, you will not be able to claim an ITC for the GST/HST you paid or 
owe for benefits you gave to your employees. For information on these 
situations, read the rest of this section.

ITC restrictions

Remember, if you cannot claim an ITC for the GST/HST you paid or owe for a 
taxable benefit, you are not considered to have collected GST/HST and, as a 
result, you do not have to remit GST/HST on that benefit.

Club memberships

You may pay or reimburse membership fees or dues for an employee or an 
employee's relative, for any club whose main purpose is to provide dining, 
recreational, or sporting facilities. In such cases, you cannot claim an ITC 
for the GST/HST you paid or owe, regardless of whether the club membership 
fees or dues are a taxable benefit to the employee for income tax purposes.

Exclusive personal use

You cannot claim an ITC for the GST/HST you paid or owe on goods or services 
you acquire, import, or bring into a participating province for the exclusive 
personal consumption, use, or enjoyment (90% or more) of an employee or an 
employee's relative. However, you can claim an ITC in the following cases:

- The consumption, use, or enjoyment of the good or service by the employee or 
the employee's relative does not give rise to a taxable benefit for income tax 
purposes and no amounts were payable by the employee for this benefit. The 
most common type of non-taxable benefit is moving expenses paid by an 
employer. Moving expenses that are considered non-taxable benefits are 
discussed in section 2.12, "Moving expenses and relocation benefits," on page 
20.

- During the same GST/HST reporting period, you make a supply of the good or 
service to such a person for consideration that becomes due in that period and 
that is equal to its fair market value plus GST/HST.

Property supplied by way of lease, licence, or similar arrangement

You cannot claim an ITC for the GST/HST you paid or owe on property supplied 
by way of lease, licence, or similar arrangement that is more than 50% for the 
personal consumption, use, or enjoyment by one of the following individuals:

- if you are an individual, yourself or another individual related to you;

- if you are a partnership, an individual who is a partner or another 
individual who is an employee, officer, or shareholder of, or related to, a 
partner;

- if you are a corporation, an individual who is a shareholder or another 
individual related to the shareholder; or


PAGE 33

- if you are a trust, an individual who is a beneficiary or another individual 
related to the beneficiary.

However, you can claim an ITC if, during the same GST/HST reporting period, 
you make a taxable supply of the property to that individual for consideration 
that becomes due in that period and that is equal to its fair market value.

For more information on ITCs relating to employee benefits, see GST Memorandum 
400-3-2, Employee and Shareholder Benefits.

4.6 Property acquired before 1991 or from a non-registrant

If you acquired property before 1991, you did not pay GST/HST. Also, you do 
not generally pay GST/HST when you acquire property from a non-registrant. As 
a result, you cannot claim an ITC under these circumstances. However, if you 
make this property available to your employee and the benefit is taxable for 
income tax purposes, you may still be considered to have collected GST/HST on 
this benefit.

Example
You bought a passenger vehicle from a non-registrant and made it available to 
your employee throughout 2000. The passenger vehicle is used more than 90% in 
the commercial activities of your business. You report the value of the 
benefit, including GST and PST, or HST, on the employee's T4 slip. For GST/HST 
purposes, you will be considered to have collected GST/HST on this benefit 
even if you could not claim an ITC on the purchase of the passenger vehicle.

4.7 Summary

The following steps will help you determine whether you have to remit GST/HST 
on employee benefits.

Step 1 - Establish whether the benefit is taxable under the Income Tax Act and 
subject to GST/HST (see the previous chapters). If the benefit is not taxable 
or is not subject to GST/HST, you are not considered to have collected any 
GST/HST on the benefit and, as a result, you will not have to remit GST/HST on 
the benefit.

Step 2 - For each taxable benefit, establish whether one of the situations 
listed in section 4.2, "Situations where you are not considered to have 
collected GST/HST," applies. If one of these situations applies, you are not 
considered to have collected GST/HST on this benefit and, as a result, you 
will not have to remit any GST/HST on the benefit.

Step 3 - If you are considered to have collected GST/HST on a taxable benefit, 
you have to calculate the amount of GST/HST due (see section 4.4, "How do you 
calculate the amount of GST/HST you are considered to have collected?").

Step 4 - Enter the amount of GST/HST due on your GST/HST return and send your 
remittance, if applicable, with your GST/HST return for the reporting period 
that includes the last day of February 2003*.

Note*
The GST/HST amount may be due in a different reporting period if the GST/HST 
is for a reimbursement made by an employee or an employee's relative in 
certain circumstances. For more information, see the note in the section 
called "Value of the benefit for GST/HST purposes" on page 31.

Employee does not pay GST/HST on taxable benefits

The employee does not pay the GST/HST you have to remit on taxable benefits. 
As explained in previous chapters, an amount for GST/HST has already been 
added to the taxable benefit reported on the employee's T4 slip.

4.8 Examples

The following examples will help you apply the GST/HST rules on employee 
benefits.

Example 1: Automobile benefits in a non-participating province

As a corporation registered for GST/HST, you buy a vehicle that is used more 
than 50% in commercial activities and is made available to your employee 
during 2002. The last establishment where the employee ordinarily reported in 
the year for the corporation was located in Ontario. Using the work sheet on 
page 9, you calculated a taxable benefit (including GST and PST) of $4,800 on 
the standby charge and an operating cost benefit of $600. Your employee 
reimbursed you $1,800 for the automobile operating costs within 45 days 
following the end of 2002. You did not include this amount as a taxable 
benefit.

You claimed an ITC for the purchase of the automobile and also on the 
operating costs.

Since the benefit is taxable under the Income Tax Act, and no situations 
described on page 31 (where you are not considered to have collected GST on 
taxable benefits) apply, you calculate the GST remittance as follows:

Standby charge benefit
Taxable benefit reported on T4 $4,800

GST considered to have been collected on the benefit $4,800 multiplied by 6 
divided by 106 = $271.70

Operating cost benefit
Taxable benefit reported on T4 $600

Employee's partial reimbursement of operating costs $1,800

Total value of the benefit ($600 + $1,800) = $2,400

GST considered to have been collected on the benefit $2,400 multiplied by 5% = 
$120.00

Total GST to be remitted on the automobile benefit ($271.70 + $120.00) = 
$391.70


PAGE 34

You are considered to have collected GST in the amount of $391.70 at the end 
of February 2003. You have to include this amount on your GST/HST return for 
the reporting period that includes the last day of February 2003.

Example 2: Automobile benefits in a participating province
Using the same facts as in Example 1 above, assume that the last establishment 
to which the employee ordinarily reported in the year for the corporation was 
located in Nova Scotia. In this case, you would calculate the HST remittance 
as follows:

Standby charge benefit
Taxable benefit reported on T4 $4,800

HST considered to have been collected on the benefit $4,800 multiplied by 14 
divided by 114 = $589.47

Operating cost benefit
Taxable benefit reported on T4 $600

Employee's partial reimbursement of operating costs $1,800

Total value of the benefit ($600 + $1,800) = $2,400

HST considered to have been collected on the benefit $2,400 multiplied by 11% 
= $264.00

Total HST to be remitted on the automobile benefit ($589.47 + $264.00) = 
$853.47

You are considered to have collected HST in the amount of $853.47 at the end 
of February 2003. You have to include this amount on your GST/HST return for 
the reporting period that includes the last day of February 2003.

Example 3: Long service award
You bought a watch for $460 (including GST and PST, or HST) for your employee 
to mark the employee's 25 years of service. You reported a taxable benefit of 
$460 in box 14 and under code 40 on the employee's T4 slip. You could not 
claim an ITC because you bought the watch for the employee's exclusive 
personal use and enjoyment. Since you cannot claim an ITC, you are not 
considered to have collected GST/HST and, as a result, you will not have to 
remit GST/HST on the benefit.

Example 4: Special clothing
You have provided your employees with safety footwear designed to protect them 
from particular hazards associated with their employment. Since we do not 
consider the footwear to be a taxable benefit to the employees for income tax 
purposes, you are not considered to have collected GST/HST on the footwear and 
you do not have to remit GST/HST. However, you can claim an ITC for any 
GST/HST you paid on the footwear.


PAGE 35

Benefits Chart

This chart lists the taxable allowances and benefits discussed in the guide. 
It indicates whether they are subject to CPP and EI withholdings, and which 
codes you should use to report them on the employee's T4 slip.

The chart also indicates whether GST/HST must be included in the value of the 
taxable benefit for income tax purposes. Cash reimbursements and non-cash 
benefits are subject to GST/HST, unless they are for exempt or zero-rated 
supplies. Cash allowances are not subject to GST/HST.

+++ Taxable allowance or benefit

Automobile allowances, CPP yes, EI yes, Code 40, GST/HST no

Automobile standby charge and operating cost benefits, CPP yes, EI no, Code 
34, GST/HST yes

Board and lodging, if cash earnings also paid in the pay period, CPP yes, EI 
yes, Code 30, GST/HST (The rent portion of the lodging benefit is subject to 
GST/HST if the dwelling is occupied for less than one month; the utility 
portion is subject to GST/HST unless municipality-supplied.)

Board and lodging, if no cash earnings paid in the pay period, CPP yes, EI no, 
Code 30, GST/HST (The rent portion of the lodging benefit is subject to 
GST/HST if the dwelling is occupied for less than one month; the utility 
portion is subject to GST/HST unless municipality-supplied.)

Counselling services - in cash, CPP yes, EI yes, Code 40, GST/HST (Certain 
counselling services are subject to GST/HST. If the services you pay are 
subject to GST/HST, include it in the value of the benefit.)

Counselling services - non-cash, CPP yes, EI no, Code 40, GST/HST (Certain 
counselling services are subject to GST/HST. If the services you pay are 
subject to GST/HST, include it in the value of the benefit.

Discounts on merchandise and commissions on sales, CPP yes, EI no, Code 40, 
GST/HST yes

Educational allowances for children, CPP yes, EI yes, Code 40, GST/HST no

Gifts, awards, and social events - in cash, CPP yes, EI yes, Code 40, GST/HST 
no

Gifts, awards, and social events - non-cash, CPP yes, EI no, Code 40, GST/HST 
yes

Group term life insurance policies: Employer-paid premiums, CPP yes, EI no, 
Code 40, GST/HST no

Housing, rent-free or low-rent - in cash, CPP yes, EI yes, Code 30, GST/HST 
(The rent portion of the housing benefit is subject to GST/HST if the dwelling 
is occupied for less than one month; the utility portion is subject to GST/HST 
unless municipality-supplied.)

Housing, rent-free or low-rent - non-cash, CPP yes, EI (If it is a non-cash 
benefit, it is insurable if it is received by the employee in addition to cash 
earnings in a pay period. If no cash earnings are paid in the pay period, it 
is not insurable.) Code 30, GST/HST (The rent portion of the housing benefit 
is subject to GST/HST if the dwelling is occupied for less than one month; the 
utility portion is subject to GST/HST unless municipality-supplied.)

Interest-free and low-interest loans (Enter the home relocation loan deduction 
under code 37.) CPP yes, EI no, Code 36, GST/HST no

Medical expenses - in cash, CPP yes, EI yes, Code 40, GST/HST (Some medical 
expenses are subject to GST/HST. For more information, contact any tax 
services office or tax centre.)

Medical expenses - non-cash, CPP yes, EI no, Code 40, GST/HST (Some medical 
expenses are subject to GST/HST. For more information, contact any tax 
services office or tax centre.)

Chart continues on next page


PAGE 36

Taxable allowance or benefit continued

Moving expenses and relocation benefits - in cash, CPP yes, EI yes, Code 40, 
GST/HST yes

Moving expenses and relocation benefits - non-cash, CPP yes, EI no, Code 40, 
GST/HST yes

Moving expenses - non-accountable allowance over $650, CPP yes, EI yes, Code 
40, GST/HST no

Municipal officer's expense allowance (Enter the exempt amount under code 70.) 
CPP yes, EI no, Code 40, GST/HST no

Parking - in cash, CPP yes, EI yes, Code 40, GST/HST yes

Parking - non-cash, CPP yes, EI no, Code 40, GST/HST yes

Premiums under provincial hospitalization, medical care insurance, and certain 
federal government plans, CPP yes, EI no, Code 40, GST/HST no

Professional fees - in cash, CPP yes, EI yes, Code 40, GST/HST (Certain fees 
are subject to GST/HST. If the fees you pay are subject to GST/HST, include it 
in the value of the benefit.)

Professional fees - non-cash, CPP yes, EI no, Code 40, GST/HST (Certain fees 
are subject to GST/HST. If the fees you pay are subject to GST/HST, include it 
in the value of the benefit.)

Recreational facilities - in cash, CPP yes, EI yes, Code 40, GST/HST yes

Recreational facilities - non-cash, CPP yes, EI no, Code 40, GST/HST yes

Recreational facilities - club membership dues, CPP yes, EI no, Code 40, 
GST/HST no

Registered retirement savings plan (RRSP) premiums, CPP yes, EI yes, Code 40, 
GST/HST no

Registered retirement savings plan (RRSP) administration fees, CPP yes, EI 
yes, Code 40, GST/HST (Certain fees are subject to GST/HST. If the fees you 
pay are subject to GST/HST, include it in the value of the benefit.)

Scholarships and bursaries, CPP yes, EI yes, Code 40, GST/HST no

Spouse or common-law partner's travelling expenses - cash allowance, CPP yes, 
EI yes, Code 40, GST/HST no

Spouse or common-law partner's travelling expenses - non-cash, CPP yes, EI no, 
Code 40, GST/HST yes

Stock options (Enter the amount of the stock option and shares deduction under 
code 39 or 41, as applicable.) CPP yes, EI no, Code 38, GST/HST no

Subsidized meals, CPP yes, EI no, Code 30, GST/HST yes

Travel assistance in a prescribed zone (Enter the amount of medical travel 
assistance under code 33.) CPP yes, EI Yes, Code 32, GST/HST yes

Travelling allowances to a part-time employee and other employees, CPP yes, EI 
yes, Code 40, GST/HST no

Tuition fees - in cash, CPP yes, EI yes, Code 40, GST/HST (Certain fees are 
subject to GST/HST. If the fees you pay are subject to GST/HST, include it in 
the value of the benefit.)

Tuition fees - non-cash, CPP yes, EI no, Code 40, GST/HST (Certain fees are 
subject to GST/HST. If the fees you pay are subject to GST/HST, include it in 
the value of the benefit.)

Uniforms and special clothing - in cash, CPP yes, EI yes, Code 40, GST/HST yes

Uniforms and special clothing - non-cash, CPP yes, EI no, Code 40, GST/HST yes

Wage-loss replacement or income maintenance non-group plan premiums, CPP yes, 
EI no, Code 40, GST/HST no +++