November 10th, 2023
a) There must be a taxable benefit for the employee or shareholder for the purposes of the Income Tax Act.
Here are some examples:
- General employment benefits
- Right to use an automobile
- Automobile operating costs
- Shareholder benefits
b) The employer must be a “registrant” as defined in section 123 of the ETA, i.e. a person registered for GST/HST/QST or required to be registered;
c) The registered employer must make a “supply” of property or services under section 123 of the ETA (including a supply by way of sale, gift, lease, or licence);
d) The supply must be made to an individual who is either an employee or a shareholder, or to a person related to such an individual (spouse or other family member);
e) The supply must be a GST/QST taxable supply. This does not include zero-rated and exempt supplies.
The most common taxable benefits for which employers must remit GST/HST/QST are as follows:
- personal use of an automobile acquired or leased by the employer;
- board and lodging (short-term);
- premiums that are not paid in cash;
- the plan for frequent air travel;
- gifts over $500;
- the provision of a parking space.
The most common taxable benefits for which employers are not required to remit GST/HST/QST (exempt supplies) are as follows:
- group term life insurance policies;
- medical expense insurance;
- interest-free or low-interest loans;
- stock options.
