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VOLUME 27, ISSUE 4, August 2013
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In This Issue:
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Sincerely,
Ronald Klayman
Klayman & Company Chartered Accountants |
Non-Taxable Employee Perks
Good employees are difficult to find, so it may be worthwhile to offer benefits that will encourage them to stay.
Many owner-managers would like to provide their employees with additional benefits but may be reluctant to do so because Canada Revenue Agency (CRA) requires that many benefits be included in employee compensation. Unfortunately, this may attract additional income tax for the employees and add costs to both the employee and employer for employment insurance and CPP.
Some benefits, however, are not taxable to the employee, yet may provide a deductible expense to the employer.
If you, the owner-manager, could design the ideal benefit for your employees, what features would it include? The following four factors may be worth considering:
1. a deductible expense to you;
2. no extra costs for you, such as employment insurance or CPP;
3. non-taxable in the hands of the employee; and
4. attractive enough to keep hard-to-replace employees working for you.
You may be surprised to discover that a few such benefits already exist - if they meet the right criteria.
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