We have changed how we treat benefits related to social events to reflect the changes the Canada Revenue Agency (CRA) made to its policy. These changes took effect on January 1, 2022. 

We have not changed the rules specific to gift certificates and gift cards.

To determine the value of the benefit respecting a social event, we must distinguish between an in-person event (or combined in-person and virtual event) and a virtual event.

In-person (or combined in-person and virtual) social event

If you offer your employees a free in-person (or combined in-person and virtual) social event, such as a retirement party or seasonal activity, the benefit for the employee and their spouse's attendance is not taxable if all the following conditions are met:

• You offer the activity to all your employees in one of your business locations.
• The cost of the activity is not more than $150 (including taxes) per person. This amount includes venue rental, food and entertainment, but excludes ancillary costs (e.g. transportation and lodging), gifts and rewards.
• The activity is one of no more than six social events you pay for in the year. These events can be in-person, virtual or a combination of the two.

If an activity is offered to all your employees and their spouses, the cost must be calculated on the total number of participants, not just the number of employees.

If the above conditions are not met, the total value of the benefit for the employee and their spouse's attendance and the value of the benefit respecting ancillary costs must be included in the employee's income.

You must include the total value of the benefit in boxes A and L and, where applicable, in box G of the employee's RL-1 slip (see courtesy translation RL-1-T). See Benefit Provided to an Employee.

Ancillary costs

Ancillary costs for in-person participants in a social event, such as transportation and lodging fees, are not included in cost of the social event. If such costs are considered reasonable in the circumstances, they are not taxable benefits for the employee. If such costs are not considered reasonable, the value of the related benefit must be included in the employee's income, even if the benefit for the employee and their spouse's attendance is not taxable. In addition, the value of the benefit respecting ancillary costs incurred only for the spouse must always be included in the employee's income.

Gift certificates and gift cards

If you give a gift certificate or gift card (including a chip card) for food, beverages and delivery service to an employee (or their spouse) virtually attending an event that is a combined in-person and virtual event, the cost of the gift certificate or gift card must be included in the cost of the social event if the gift certificate or gift card is not considered easily convertible into cash. A gift certificate or gift card is not considered easily convertible into cash if it must be used to purchase a good or service from one or more designated merchants.

If the gift certificate or gift card is considered easily converted to cash, its value must be included in the employee's income and excluded from the cost of the social event.

Virtual social events

If you offer your employees a free social event, such as a retirement party or seasonal activity, or if you reimburse them for the cost of such an event, the benefit for the employee's attendance is not taxable if all the following conditions are met:

• You offer the activity to all your employees in one of your business locations.
• The cost of the event is not more than:
  • $50 (including taxes) per employee, if the amount includes only the cost of food, beverages and delivery service;
  • $100 (including taxes) per employee, if the amount includes the cost of food, beverages, delivery service and entertainment.
• If you reimburse your employee for this activity, the employee gives you receipts.
• The activity is one of no more than six social events you pay for in the year. These events can be in-person, virtual or a combination of the two.

The cost of the event does not not include the cost of gifts and rewards.

If the above conditions are not met, the total value of the benefit for the employee's attendance must be included in their income.

You must include the total value of the benefit in boxes A and L and, where applicable, in box G or I of the employee's RL-1 slip (see courtesy translation RL‑1‑T). See Benefit Provided to an Employee.

Gift certificates and gift cards

If you give a gift certificate or gift card (including a chip card) for food, beverages and delivery service to an employee attending a virtual event, the cost of the gift certificate or gift card must be included in the cost of the social event if the gift certificate or gift card is not considered easily convertible into cash. A gift certificate or gift card is not considered easily convertible into cash if it must be used to purchase a good or service from one or more designated merchants.

If the gift certificate or gift card is considered easily convertible into cash, its value must be included in the employee's income and excluded from the cost of the social event.

Note that if you provide your employee's spouse with a gift certificate or gift card, its value must always be included in your employee's income.

For more information, see document CTF-2003, Directive fiscale concernant l'avantage relatif aux activités mondaines (in French only).