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The employer provides a discount to all of their employees of 35% ($52.50) per laptop. The price paid by an employee per laptop is $97.50. The cost to the employer for each laptop is $40. The discount received by the employee is not a taxable benefit because the price paid by the employee for the laptop is at least the cost of the employer.
Oct 11, 2017 · and if an employer arranges with another employer for a reciprocal employee discount on merchandise. The requirement will be on employers to report taxable income on employees' T4s. However, there ...
- General information. Do you need to register for a payroll program account. You need to register for a payroll program account if you meet any of the following conditions
- Canada Pension Plan contributions. For Canada Pension Plan (CPP), contributions are not calculated from the first dollar of pensionable earnings.
- Employment insurance premiums. You have to deduct employment insurance (EI) premiums from each dollar of insurable earnings up to the yearly maximum.
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Oct 11, 2017 · In 2016, the CRA published an updated technical document on “Benefits and Allowances Received from Employment” (Income Tax Folio S2-F3-C2*), which provides that employee discounts on merchandise for less than fair market value are considered taxable benefits under the Income Tax Act. As revised, the CRA’s stated position is that these employee discounts, which are common in the retail ...
The employee must report the value of the benefit on their T1 return. If the benefit is taxable, you must withhold the following deductions. The amounts must be included in the pay period they were received or enjoyed. The withholding and remitting requirement depends on the type of remuneration: cash , non-cash , or near-cash .
Oct 12, 2017 · The new position can be found in the folio: 2.28 When an employee receives a discount on merchandise because of their employment, the value of the discount is generally included in the employee’s income under paragraph 6(1)(a). The discount may be provided by the employer or by a third-party.
People also ask
Are discounts taxable?
Is a discount taxable if I sell merchandise to my employees?
Are general employee discounts taxable?
Will new tax laws affect employee discounts?
Is a laptop discount taxable?
Does a reciprocal employee discount count as income?
The earlier policy is in the CRA’s T4130 Employer’s Guide: Taxable Benefits (the “Guide”), which outlines the tax treatment of a wide range of benefits that an employee might receive. Of note, the Guide states (on page 18): “If you sell merchandise to your employee at a discount, the benefit he or she gets from this is not usually considered a taxable benefit”.
