Canada Revenue Agency wants to start taxing employee discounts

Oct 11 2017, 9:06 pm

Discount perks for retail workers will soon come with a cost.

The Canada Revenue Agency could soon be taxing employees on their discounts if they are not available to the public.

According to a document posted on the CRA website, employee discounts on merchandise should be considered a taxable benefit.

The agency said that if an employee receives a discount on merchandise the amount of the discount should be included in the employee’s income tax.

“The discount may be provided by the employer or by a third-party. The value of the benefit is equal to the fair market value of the merchandise purchased, less the amount paid by the employee. However, no amount is included in the employee’s income if the discount is also available to the general public or to specific public groups,” stated the CRA.

The CRA also posted an example of what this interpretation would look like:


There has been some confusion around the CRA’s update on employee discounts and if it is a new law for retail workers. According to National Revenue Minister Diane Lebouthillier, there have been no official changes to the law.

“Our Government recognizes the important role that our retail sector and those working in it play in our communities and in our economy. There have been no changes to the laws governing taxable benefits to retail employees. We are not targetting individuals working in retail,” Lebouthillier said in a statement on Twitter.

“The Agency issued a guidance document to mainly provide assistance for employers and is committed to further clarifying the word of the guidance to reflect this.”

Hopefully that clarification continues heading into the 2018 tax season.

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