Be a Santa and not a Scrooge to your staff

T’is the time of year to thank your employees for their hard work and dedication.  You may do this with gifts and a holiday party.  As you want to be a Santa and not a Scrooge, it is important to plan the gifts and social event so that they are not considered taxable benefits according to the Income Tax Act and consequently included in your employees’ employment income for the year.

Here are some of the main points:
All cash or near-cash gifts (i.e. gift certificates or gift cards) are considered taxable benefits.
If an employee receives non-cash gifts during the year with a value of $500 or less, the non-cash gifts are not considered a taxable benefit. 
If the value of the non-cash gifts received by an employee during the year total $600, then the employee will be deemed to have received a taxable benefit of $100 ($600 less $500).
Holiday parties in which all employees are invited and cost $100 or less per person are not considered a taxable benefit. 
If the holiday party costs $200 per person, the entire cost of the holiday party is considered a taxable benefit.
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Posted on December 22, 2016, in Corporate Tax, Payroll, Who Knew? and tagged , . Bookmark the permalink. Leave a comment.

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