Benefits Provided to an Employee Working at a Special Work Site or a Remote Location

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This page details the special rules that apply to certain benefits provided to employees working at a special work site or remote location.

Board and lodging

A reimbursement or reasonable allowance you provide to an employee for expenses incurred for board and lodging, or board and lodging you provide to the employee, does not constitute a taxable benefit for the employee where the employee's duties require the employee to be away from his or her principal place of residence or to be at a special work site or a remote location for a period of at least 36 hours, and the board and lodging are provided:

  • at a special work site, where the employee performs temporary duties, and the dwelling that is the employee's principal place of residence is:
    • available throughout the period for occupancy by the employee and is not rented to another person, and
    • far enough from the work site that the employee could not reasonably be expected to return home every day; or
  • at a location so remote from any established community that the employee could not reasonably be expected to establish or maintain a dwelling there.

If these conditions are not met, the value of the benefit provided to the employee is taxable and must be included in boxes A and V and in box G or box I of the employee's RL-1 slip (see courtesy translation RL-1-T). See Benefit Provided to an Employee to find out how a benefit in kind should be treated.

Tax-exempt benefit for board and lodging

The value of a tax-exempt benefit may reduce the amount of the deduction for residents of designated remote areas that an employee can claim in his or her income tax return.

You must enter “V-1”, followed by the amount of the tax-exempt benefit for board and lodging in a blank box on the RL-1 slip (see courtesy translation RL-1-T) if:

  • you provide a benefit (including an allowance or reimbursement fixed by a government order, by a decision of the Conseil du trésor or by a collective agreement made pursuant to the Act respecting labour relations, vocational training and workforce management in the construction industry) to the employee for board and lodging at a special work site; and
  • the work site is in a northern zone or an intermediate zone prescribed by regulation and is situated within a radius of 30 kilometres of a population centre of at least 40,000 inhabitants.
Transportation

The value of a benefit related to a reimbursement or reasonable allowance you provide to an employee for expenses incurred for transportation, or transportation you provide to the employee, is not taxable for the employee if the following conditions are met:

  • The employee's duties require the employee to be away from his or her principal place of residence or at a special work site or a remote location for a period of at least 36 hours.
  • The employee received a reimbursement or an allowance for his or her board and lodging during the period, or received board and lodging during the period.
  • Transportation is provided:
    • between the employee's principal place of residence and the special work site, or
    • between the remote location and a location in Canada or in the country in which the employee is employed.

If these conditions are not met, the value of the benefit is taxable and must be included in boxes A, G and L of the employee's RL-1 slip (see courtesy translation RL-1-T).

Check-out allowance

Under some employment contracts, an employee who leaves a special work site or a remote location for the weekend receives a check-out allowance. This allowance usually corresponds to the value of board and lodging during the employee's absence.

Such an allowance is taxable and must be included in boxes A, G, I and L of the employee's RL-1 slip (see courtesy translation RL-1-T).

Compensation allowance

Under some employment contracts, an employee can leave a special work site or a remote location for a vacation after a specified work period. If the cost of the employee's round trip is paid entirely by the employer, the value of the benefit must not be included in the employee's income (see Transportation above).

However, if the employee elects to remain at the special work site or the remote location and be paid a compensation allowance for having elected to forgo the right to leave, the allowance is taxable and must be included in boxes A, G, I and L of the employee's RL-1 slip (see courtesy translation RL-1-T).

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