Employers could face a fresh tax headache – or have to put an end to employee discounts – if the Canadian Revenue Agency enforces tax on workplace freebies.
While CRA’s employer guide on tax has previously said employee discounts are "not usually considered a taxable benefit," an updated version says: "The value of the discount is generally included in the employee's income."
Retail Council of Canada vice-president Karl Littler recently told a parliamentary committee the change could create an "administrative nightmare" for employers who would normally offer retail staffers discounts on goods, or give hospitality workers a free meal.
Those organizations might look to scrap those discounts rather than face the challenge of tracking who owes what.
CRA told The Globe and Mail it didn’t believe there would be a great increase in discounts reported on tax returns, adding that if the discount was available to the public, it needn’t be treated as taxable income.
Conservative MPs accused the government of targeting low-income workers, while lobby groups said they expected the policy change might swiftly be abandoned, following the backlash.
Legal experts reveal what employers must learn