Gifts, awards and social events

A gift or award that you give an employee is considered to be a taxable benefit from employment, whether it is cash, near-cash, or non-cash. However, under our policy, a non-cash gift or award that you give an employee may not be considered a taxable benefit under certain circumstances. For more information, see Policy for gifts and awards.

An award from a manufacturer may be taxable, see Awards from a manufacturer for details.

Providing social events to your employees may also be a taxable benefit, see Social events.

If the benefit is all cash, do not include GST/HST in it. However, if all or part of the taxable benefit is non-cash and is not an exempt or zero-rated supply, include GST/HST in the value of that part of the benefit.

Payroll deductions
Where the benefit is taxable, it is also pensionable. Deduct CPP contributions and income tax. If the taxable benefit is paid in cash, it is insurable. Deduct EI premiums. If it is a non-cash benefit, it is not insurable—do not deduct EI premiums. For EI purposes only, near-cash taxable benefits are treated the same as non-cash taxable benefits. therefore, they are not insurable. Do not deduct EI premiums.

Reporting the benefit
Include the taxable gift, award or social event on a T4 slip in box 14, "Employment income" and in the "Other information" area under code 40 at the bottom of the employee's slip. For more information, see T4.

Forms and publications

• IT470, Employee's Fringe Benefits
• Technical News No. 15