Canadian Payroll Reporter

Published 12 times a year by Thomson Reuters Canada Ltd. Subscription rate: $179 per year Customer Service Tel: (416) 609-3800 (Toronto) (800) 387-5164 (outside Toronto) Fax: (416) 298-5106 E-mail: customersupport.legaltaxcanada @tr.com Website: www.carswell.com One Corporate Plaza 2075 Kennedy Road Toronto, Ontario, Canada M1T 3V4 Director, Media Solutions, Canada Karen Lorimer Publisher/Editor-in-Chief Todd Humber Editor Sheila Brawn sbrawn@rogers.com Editor/Supervisor Sarah Dobson News Editor Marcel Vander Wier Sales Manager Paul Burton paul.burton@thomsonreuters.com (416) 649-9928 Marketing Manager Robert Symes rob.symes@thomsonreuters.com (416) 649-9551 Circulation Co-ordinator Keith Fulford keith.fulford@thomsonreuters.com (416) 649-9585 Payroll Reporter Can R Can R adian adian a www.payroll-reporter.com ©2017 Thomson Reuters Canada Ltd ISBN/ISSN: 978-0-7798-2810-4 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, photocopying, recording or otherwise without the written permission of the publisher (Thomson Reuters, Media Solutions, Canada). Return Mail Registration # 1522825 | Return Postage Guaranteed Paid News Revenue Toronto Canadian Payroll Reporter is part of the Canadian HR Reporter group of publications: • Canadian HR Reporter — www.hrreporter.com • Canadian Occupational Safety magazine — www.cos-mag.com • Canadian Payroll Reporter — www.payroll-reporter.com • Canadian Employment Law Today — www.employmentlawtoday.com • Canadian Labour Reporter — www.labour-reporter.com See carswell.com for information True or false: Parking passes are taxable benefi ts premiums. Whether or not em- ployers have to deduct EI and QPIP premiums depends on whether the employment is cov- ered under EI/QPIP and wheth- er the benefit is in the form of cash, near-cash or non-cash. If the employment is not insurable, do not deduct EI or QPIP from the benefit. If the benefit is a cash benefit, it is subject to EI and QPIP de- ductions. The CRA says "cash" includes things such as money, cheques and direct deposit. Near-cash and non-cash tax- able benefits are generally not included when calculating EI and QPIP premiums. Near-cash refers to items that function as cash or that can be easily con- verted to cash, such as gift cards, stocks and securities. Non-cash benefits are actual goods, services or property that an employer provides to an em- ployee. Another term for non- cash benefits is benefits in kind. There are two exceptions to the non-taxability of non-cash benefits: the value of board and lodging benefits provided to an employee during a period in which the employer pays the employee cash earnings, and the value of employer-paid contributions to an RRSP when the employee can withdraw amounts from the plan. When calculating the taxable benefit for employer-paid group term life insurance premiums, do not include the GST/HST/QST in the value of the benefit. True or False? True. Insurance is an exempt sup- ply under the GST/HST/QST. Employers should always wait until they are preparing T4s at year-end before adding the value of taxable benefits to employees' earnings. True or False? False. The CRA requires em- ployers to calculate and include the value of taxable benefits in employees' income on a pay-pe- riod basis. Employers who wait until the end of the year to assess an entire year's taxable benefit could be penalized for failing to withhold and remit the appro- priate source deductions. If the exact value of the ben- efit is unknown during the year, payroll may use a reasonable es- timate. At year-end, the payroll department will have to make any necessary adjustments. Employer-paid premiums for an employee's coverage under a group sickness or accident insurance plan, such as accidental death and dismemberment or critical insurance, are a taxable benefit. True or False? True, although an exception ap- plies for employer premiums or contributions for a wage-loss replacement plan that pays ben- efits on a periodic basis rather than in a lump sum. When calculating the value of taxable benefits to include in an employee's income, always use the actual amount that it cost the employer to provide the benefit. True or False? False. The value of the benefit is its fair market value, not what it cost the employer to provide it (unless it paid the fair market val- ue). The CRA says the fair market value is the highest price obtain- able for a good or a service in an open market between two parties who deal with each other at arm's length. When determining the fair market value, include any ap- plicable provincial retail sales tax and the GST/HST/QST. If an employer provides free or subsidized parking for an employee, there is no taxable benefit if the employer owns the parking lot. True or False? False. It does not matter if the employer owns the parking lot. Employer-provided free or subsidized parking is a taxable benefit unless the employee has a disability or the employer pro- vides the parking for business purposes and the employees regularly use their automobile or an employer vehicle to carry out their work duties. There is no taxable benefit if employers provide free meals or reimburse employees for their meal costs when employees work overtime. True or False? True, if certain conditions ap- ply. The CRA says the cost of the meal must be reasonable (gen- erally up to $17), the employees must work at least two hours of overtime right before or right af- ter their scheduled work hours, and the overtime must be infre- quent or occasional (generally less than three times per week, with some exceptions). Employees may use an employer's gym or recreation facilities free of charge without incurring a taxable benefit. True or False. True, as long as the employer al- lows all of its employees to use the facilities and not just a select group. This applies whether the facilities are in-house or the em- ployer pays for the use of an out- side facility. If using an outside facility, the membership must be with the employer and not the employees for there to be no tax- able benefit. All loyalty points that employees collect and redeem from using their credit card or a company credit card to pay for business expenses are a taxable benefit. True or False? False. If employees use their personal credit card to pay for the cost of work-related travel or other business expenses (for which the employer reimburses them) and that generates loyalty points, there is no taxable bene- fit unless the employees convert the points to cash, or the CRA (or Revenu Québec) determines that the arrangement is a form of additional remuneration or a way to avoid paying tax. If you got all or most of the questions correct, congratula- tions! You know your taxable benefit rules. from TEST on page 3 News October 2017 | CPR

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