Automobile expense allowance
A reasonable allowance calculated exclusively on the basis of the number of kilometres traveled as part of the employment functions is not taxable. The allowance will be considered reasonable, even if the employer reimburses certain expenses 10 to the employee, to the extent that it is determined without taking these expenses into account.
Tax administrations tend to assert that an allowance is reasonable if the rate does not exceed $ 0.58 / km for the first 5,000 kilometers and $ 0.52 / km for all other kilometers 11. The allowance must take into account the mileage rate change actually occurred. It is therefore essential to keep a register of actual trips to ensure that the allowance is not taxable. If the employee considers the allowance received unreasonable because it is insufficient to cover his travel expenses, he can add this allowance to his income and deduct his actual expenses as such.
When an employer pays its employees an allowance consisting of a fixed amount and an amount calculated at a rate per kilometer, the total of the allowance is taxable when the two parts of the allowance are for the same use of a vehicle. The employee may however deduct eligible expenses relating to the use of his automobile.
Allowance for a director
At the federal level, an allowance for automobile expenses or a reimbursement of expenses incurred to attend a meeting of the board of directors of a registered charity is not taxable. In Quebec, allowances or reimbursements for travel expenses paid to a representative of a company, association or organization for the purpose of attending meetings of the board of directors or of a committee members are not taxable if the following conditions are met:
The sums are reasonable;
It does not deal at arm’s length with the entity;
The meetings take place in a place at least 80 kilometers from his place of residence: This place is linked to the territory in which the non-profit organization operates; in other cases, this place is located inside the local municipal territory or the metropolitan region where the establishment of the entity is located.
Member of a municipal body
An expense allowance paid to a member of a municipal body is not taxable insofar as it does not exceed one third (half in Quebec) of the allowance and salary received in the course of duties. However, since 2019, such an allowance is taxable at the federal level if it is not subject to justification.
Professional and union dues
At the federal level, there is no taxable benefit when the employer pays or reimburses contributions to a professional association if this membership is beneficial to the employer. In addition, the payment or reimbursement of the initial fees paid for admission to a professional order constitutes a taxable benefit. In Quebec, the contributions paid by the employer to associations covered by the Office des professions du Québec, to a recognized artistic association as well as to the Professional Association of Taxi Drivers of Quebec constitute a taxable benefit for employees.
Tuition and training fees
There is no taxable benefit for the employee when training activities primarily benefit the employer. These activities include: Training (including related costs such as books, meals, travel, etc.) leading to a diploma, license or certificate 12 and used to maintain or improve skills related to the employer’s activities, in the extent to which the employee is expected to return to work for a relatively long period of time after the course ends;
Training on business-related topics, such as stress management, even if this training does not directly concern the employer’s business. On the other hand, if the training is followed mainly for the benefit of the employee, the cost of this training paid by the employer constitutes a taxable benefit. Finally, amounts paid by an employer for the studies of an employee’s family member can benefit from advantageous tax treatment.
There is a taxable benefit when the employer provides free parking, or at a cost lower than the FMV, to his employee. This advantage corresponds to the FMV of the parking space, taking into account taxes less any amount paid by the employee. There is no taxable benefit when it is impossible to determine the FMV, for example in the case of a place in the parking lot of a shopping center offered to everyone, or a parking lot where it There are fewer places than users and where the places are occupied by the employees who arrive first.
When an employee must use an automobile regularly in the course of his employment (three days or more per week), the value of the parking is not a taxable benefit. In addition, when the employee uses his automobile improperly, the advantage can be reduced to take into account the number of days the employee must use his automobile compared to the number of days when parking is provided.