Employment Income

Question 1

Employment income includes:

Answer 1

• salary, wages, gratuities, director’s or other fees received
• value of benefits received or enjoyed
• allowances received
• less deductions specifically allowed by the ITA

Question 2

Standby charge

Answer 2

• 2% x (original cost (including GST) x # of months available,) OR
• 2/3 of the monthly lease cost (excluding insurance)

reduced by payments made by the individual to the employer

reduced standby charge applicable where personal use less than 50%

Question 3

Standby charge - employer owned vehicle

Answer 3

2% \* (original cost of car incl hst \* # of months available in year)
# of months avail: days/30

Question 4

standby charge - leased vehicle

Answer 4

2/3 * ( lease payments made in year - portion of lease payments made for loss)

Question 5

standby charge can be reduced if ALL apply:

Answer 5

• employee is required to use the car for employment duties
• car is used primarily (more than 50%) for employment purposes
• personal use km is less than 20,004

personal km / (1667 * total avail days) = reduction.

reduction * standby charge

Question 6

Operating cost benefit results when

Answer 6

employer pays for employees car AND operating costs

employee benefits to the extent the car is used for personal purposes

Question 7

operating cost benefit: car is not used more than 50% for employment

Answer 7

personal km * prescribed rate

Question 8

operating cost benefit: car is used more than 50% for employment

Answer 8

Lesser of:

• personal km x prescribed rate
• 1/2 of standby charge

Question 9

Operating cost benefit on employee owned car

Answer 9

(Personal km / total km) * actual operating costs paid by employer

Question 10

Taxable benefit:

employer owns car

Employee owns car, employer pays operating costs

Answer 10

Employer owns car

• standby charge + operating cost benefit - reimbursements by employee

Employee owns car, employer pays operating costs

• operating cost benefit - reimbursements by employee

Question 11

Employee loan

=Imputed interest benefit

calculated each quarter

Answer 11

= (quarterly prescribed rate * amt o/s) - int paid.

when loan relates to home purchase, relocation:

prescribed rate lesser of:

• prescribed rate
• prescribed rate when loan was entered into.

Question 12

SOB:

Public company

Answer 12

When exercised, employment benefit:

(FMV on ED - EP) * # of shares

Taxable gain
(selling price - FMV on ED) * # shares sold )) * 50%

Question 13

SOB:
CCPC

Answer 13

Employment benefit:
(FMV on ED - EP) * #shares sold
Taxable gain
(Selling price - FMV on ED) * # shares sold )) * 50%

Question 14

Home office expenses are deductible if one of the two tests are met:

8(13)

Answer 14

1. Work from home more than 50% of the time, or
2. Meet clients, and so on, at home on a regular basis.

Question 15

Home office expenses for employees

Answer 15

Can claim electricity, cost of long distance calls, maintenance, supplies only

Cannot claim

• internet/home phone
• CCA on the home

Ceiling on claimable expenses is the amount of employment income earned.

Can carryforward any amount that cannot be claimed.

Question 16

Moving expenses

Answer 16

Deductible if new residence is at least 40km closer to new work/study location

Deductible limited to income earned at new work location.

• Excess CF and deducted in following year to extent of income earned at new work location.