Taxable benefits

Although salaries, wages, commissions, tips and other types of remuneration are not subject to GST and QST, other forms of compensation provided to employees may constitute taxable benefits for which registrants may be required to remit the two taxes.

As a rule, registrants are required to remit GST and QST on certain taxable benefits they grant, for nominal or no consideration, to individuals who are employees or shareholders, or to persons related to the individuals. They must remit GST and QST if the benefits are taxable (excluding zero-rated) property or services made available to employees and if all or a portion of the value of the benefits must be included in the calculation of the employees' taxable income.

Registrants are not required to remit the taxes if they are not eligible for an input tax credit (ITC) or input tax refund (ITR) respecting the property or services. Under the QST system, this exemption also covers property and services that are subject to the ITR restrictions for large businesses (This link will open a new window).

Taxable employee benefits on which registrants must remit GST and QST include

• personal use of an automobile owned or leased by the employer
• board and lodging
• non-monetary bonuses
• gifts valued at more than $500