In general, amounts you pay or reimburse to cover the moving expenses of an employee, their family and their household effects do not constitute a taxable benefit for the employee in the following situations:

• The employee is transferred from one of your establishments to another.
• The employee accepts employment in a locality other than the one in which they reside.
• The employee moves from a remote area to another area at the end of the employment contract.
• The employee returns to the establishment from which they were transferred, after the employment ends.
• The employee begins a new job in one of your other establishments.

If none of the situations listed above applies, the employee receives a taxable benefit, in which case you have to include the value of the benefit in boxes A, G, I and L of the employee's RL-1 slip (see courtesy translation RL-1-T).

Reasonable expenses

The following moving expenses you pay or reimburse are generally not a taxable benefit if they are reasonable expenses:

• the cost of reconnecting telephone and cable services, and of hooking up household appliances;
• the cost of modifications required to install drapes, blinds, carpets, and plumbing or electrical systems, provided the changes are needed to enable the employee to continue using their property in a new residence.

If the expenses are not reasonable, the employee receives a taxable benefit and you have to include the value of the benefit in boxes A, G, I and L of the employee's RL-1 slip.

Allowance to cover expenses related to relocation

An allowance you pay to an employee to cover expenses related to relocation is not taxable as long as it does not exceed an amount equivalent to the employee's salary or wages for two weeks. To determine the maximum allowance, use employee's salary or wages on the day they begin their new assignment.

If the allowance exceeds an amount equivalent to the employee's salary or wages for two weeks, the excess portion is taxable and must be included in boxes A, G, I and L of the employee's RL-1 slip.