November 14th, 2023
It is the employer who is responsible for collecting and paying the applicable GST/HST/QST on the taxable benefits of employees and shareholders.
Employers usually remember that they are required to calculate the taxable benefits that must be declared on their employees’ T4 and Relevé 1 forms, but they do not always remember that they may have to pay taxes on these benefits.
These taxes must not be collected by the employer from its employees. On this subject, Chapter 5 of the Employer Guide T-4130 published by the CRA states:
“If the property or service giving rise to the taxable benefit is subject to GST/HST, you are considered to have collected GST/HST on that benefit. However, there are situations where you will not be considered to have collected GST/HST on employee benefits. These situations are found in the “Situations where you are not considered to have collected GST/HST” section on this page.
[…]
The employee does not pay the GST/HST that you must pay on taxable benefits. However, as mentioned in previous chapters, an amount for GST/HST is already included in the taxable benefits listed on the employee’s T4 slip.”
