Employment Income

Question 1

Scope of Employment Income

Answer 1

• Generally, all income or benefits received as a result of or related to employment must be taxed as employment.
• That would include salaries, wages, employment benefits, tips, director’s fees or even rewards offered by a supplier of your employer.
• signing bonuses on hireing and non-compete payments on termination

Question 2

Allowances not included in income

Answer 2

Any allowance received that is not specifically excepted is regarded as an allowance in respect of a personal or living expense and must be included in income. The nine exceptions are:

1. travel, personal, or living allowances fixed by an Act of ZParliament or paid uner the Inquiries Act;
2. travel and separation allowances received under regulation by a member of the Canadian Forces;
3. representation or special allowances received in a period of absence by
   
   • a Canadian Forces member,
   • servants of Canada or a province,
   • those providing services under an international development assistance program,
   • and Canadian Forces school staff;
4. representation or special allowances received by an agent-general of a province while in Ottawa;
5. reasonable travel expense allowances received in selling property or negotiating contracts for an employer;
6. reasonable allowances received by a Minister or clergy for transportation expenses;
7. reasonable allowances received by employees (other than one negotiating contracts or selling property) for travel away from the municipality or metropolitan area where they normally reported for work;
8. reasonable allowances received by employees (other than one negotiating contracts or selling property) for use of a motor vehicle in performing their employment duties;
9. allowances (not in excess of a reasonable amount) for an employee’s child to attend and live at the closest school away from home at which the instruction language is an official Canadian language because there is no school using that language where the employee is required to live.

Certain allowances, reimbursements, and other payments in respect of disabled persons for transportation to and from the workplace and for the services of an attendant to assist the employee to perform his or her employment duties are excluded from employment income. In order for these exemptions to apply the disabled person must be eligible for a disabiility tax credit.