TAXABLE BENEFIT GUIDANCE

The CRA recently provided additional guidance on the taxability of certain employment benefits that are provided by employers to their employees.

One issue that was discussed was related to happy hours and team lunches that are offered to all employees.

They advised that their policy regarding these types of social events is that as along as the cost per employee is less than $100, it would not be considered to be a taxable benefit. They did caution that the frequency of these events would have to be reasonable, although they did not provide any guidance as to what is considered reasonable.

For employers, these expenses may be deductible at 100%of the cost of the function, if the function is offered to all employees. Six functions per year would qualify for full deductibility. Only 50% of the costs of additional functions would be deductible to employers.