Most Canadians are unaware that company holiday parties could be considered a taxable benefit, according to the results of an H&R Block survey released November 20.
Fewer than 10% of respondents were aware that if an employer spends more than $100 per employee on a party, not including transportation and accommodation, then the event is considered a taxable benefit and as such should be included on the employee's T4 slip.
This is not the only benefit that could hit Canadians' income tax filings. Any non-cash benefits that exceed $500 per person are considered taxable.
"Most Canadians don't realize that any gift from an employer over a certain value, whether it's tickets to a hockey game, a vacation, or a big holiday party could be a taxable benefit," said Cleo Hamel, senior tax analyst, H&R Block Canada.
"Once you exceed the $500 non-cash limit, everything above that is reported on your T4, so if your employer offers a gift of expensive tickets that you know you won't use, you might want to politely decline."
Other survey findings included:
- 59% of respondents incorrectly believed that company-sponsored prize draws were not taxable; and
- 48% were not aware that gift cards or other cash-equivalents were taxable.
The survey did not ask employers whether or not they were aware of these taxable benefits.
