Feds Blame CRA for Employee Discount Kerfuffle

For a while last week many employees were concerned that their employee discount was going to end up being added to their T4. The reason for this was due to Canada Revenue Agency (CRA) communications which said that employee discounts are a taxable benefit and are required to be added to the employee’s T4.

Of course any amount added to a T4 results in the employee paying income tax on that amount. We saw lots of comments about how unfair this would be, as well as, how difficult it would be for employers to calculate the amounts and all the record keeping involved.

The federal government has since announced that CRA was acting without the direction of the government and that there would be no change to the tax treatment of employee discounts. Who knows if this is true or not! Maybe the feds decided that they did not need to fight any more tax battles and are simply throwing CRA under the bus. Either way the effect is the same, employee discounts are back to being not taxable.

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