A taxable benefit is a payment from an employer to an employee that primarily benefits the employee. This includes gifts, awards / long-service awards and rewards. The benefit can be in the form of cash, near cash or non-cash. Deemed taxable benefits paid to employees are subject to statutory deductions. including Income tax (CIT), Canada Pension Plan (CPP) and Employment Insurance (EI).
On behalf of Queen’s University, Payroll Services is responsible for the following:
1) Determining if the item is a taxable benefit in accordance with CRA policies
2) Calculating and deducting applicable taxes
3) Remitting both employee and employer shares of taxes to the Canada Revenue Agency
(CRA), as well as, remitting employer premiums for Workplace Safety and Insurance Board
(WSIB) and Employer Health Tax (EHT)
4) Reporting the taxable benefits on the employee’s T4 tax slip
When an employee receives a benefit (taxable or non-taxable), the employee’s department is responsible to report this benefit to Payroll Services. To ensure timely processing, departments should refer to the payroll dates & cut off schedules found on the Financial Services website.
Payroll Services will determine the benefit to be taxable or non-taxable.
- If it is determined to be a taxable benefit, Payroll Services will upload and process these benefits with the regular pay process. Statutory deductions including CIT, CPP and EI will be calculated and deducted from the employee’s pay. Employer shares of CPP and EI, EHT and WSIB premiums, will be charged to the employee’s department who provided the taxable benefit. Taxable benefits are reported on an employee’s T4 tax slip in Box 14, Employment Income and a secondary box depending on the taxable benefit received.
- If it is determined to be a non-taxable benefit in accordance with the new Gift Cards Administrative Policy (2022), Payroll Services will save the required information for CRA audit purposes only. Payroll Services will not upload the information; will not make statutory deductions; will not charge the department for employer costs and will not update the T4 tax slip. As per CRA, the employer must keep a log of all gift card for auditing purposes.
- Employee Name
- Date the gift card was provided
- Reason the gift card was provided
- Amount of the gift card
- Type of gift card
- Name of the retailer
- Taxable and Non-Taxable Benefits For Employees Information (PDF, 704 KB)
- Link to CRA website T4130 (PDF, 384 KB)
- Link to CRA website New Gift Administrative Policy
- Benefits Worksheet Example (XLS, 56 KB)
- Benefits Worksheet (XLS, 13 KB)
For additional information please contact Michelle McFadzen or Christina Blanchard