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The Christmas Perks of Benefits

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Wrap it up with a bow, group benefits are the best gift to give employees.

While every dollar an employer pays in salary is considered taxable, every dollar an employer contributes towards health and dental premiums is non-taxable (outside the province of Quebec). That’s the gift that can save employees anywhere from 26-44% on expenses in incurred tax depending on the individual tax bracket. How nice is that!

Although any life and disability premiums paid by an employer are reported on the T4 slip as taxable, there are some other perks companies can offer to staff that the tax man won’t be able to bite into.

An employer is allowed to give gifts and awards worth up to $500 a year without tax. Christmas parties are also tax-deductible as long as they cost less than $100 per person

How about those Frequent flyer points? Yes, job-related flying charged on a personal credit card, collecting frequent flyer or reward points are not considered a taxable benefit, even if reimbursed, so long as they are not converted to cash.

The non-taxable value of an Education is lost when the employer pays tuition for a course not benefiting the company. If however, the course is considered to develop or upgrade skills an employee needs in order to do their job or take on future assignments, then the money is tax-free.

If an employee moved due to a transfer, the expenses related to that move can be reimbursed by the employer without attracting a tax hit. Those expenses can include:

  • Moving costs and storage expenses.
  • Vehicle expenses, meals and accommodation associated with moving you and members of your household to your new residence.
  • Real estate commissions and legal fees to purchase the new residence when the old residence has been sold.
  • Mortgage prepayment and lease cancellation fees.
  • Costs of disconnecting and reconnecting utilities.

Keeping ahead of the curve means, home computers used for work are a non-taxable benefit as long as home computers are made available to all employees.

Wearing the logo such as T-shirts, and other swag like mugs, pens and trophies are not taxable.

In all things, consider what you had to earn this Christmas season to pay for gifts, parties, and other luxuries where receiving them tax-free would have meant so much more savings.

Happy New Year!


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Disclaimer: Please note that the information provided, while authoritative, is not guaranteed for accuracy and legality. The site is read by a world-wide audience and employment, taxation, legal vary accordingly. Please seek legal, accounting and human resources counsel from qualified professionals to make certain your legal/accounting/compliance interpretation and decisions are correct for your location. This information is for guidance, ideas, and assistance.