‘Tis the season when employers hand out gifts to employees for a job well
done.
But have you ever wondered why most companies restrict the value of their gifts to under $100? That’s because any gifts valued at over $100 are considered taxable benefits and according to the CRA should be added to the income of the employee.
While this rule may seem unseasonably Scrooge-like, don’t dismiss it as unimportant.
It’s good to be aware of the guideline because the CRA tends to be more diligent than you might expect about it. And it’s not uncommon for the CRA to make adjustments in an employee’s income because of it.
To complicate matters further, the price paid for a gift may not always be the perceived value according to the CRA. For example, even though your employer may have gifted you with a rare bottle of wine purchased at a discounted price, the CRA could value it at the regular retail price. And that could result in a reassessment.
So the next time you think your employer isn’t being generous enough during the holidays, remember that they’re being compliant with CRA rules and also trying to save you from additional taxes.