Uniforms and Special Clothing
As a rule, the value of any clothing you provide to an employee that must be worn by the employee in the performance of his or her duties is not considered a taxable benefit.
For example, if you provide a distinctive uniform that must be worn by the employee in the performance of his or her duties, or special clothing or equipment designed to protect the employee from work hazards, there is no taxable benefit for the employee.
The distinctive nature of the clothing must be determined on the basis of its intrinsic characteristics and not on the basis of the employee's usual attire. In other words, clothing is distinctive if it is not suitable to be worn elsewhere than at work.
For example, the safety equipment worn by construction workers is distinctive. Consequently, an allowance for such equipment does not constitute a taxable benefit.
With respect to police officers, we are willing to take a more liberal view of what constitutes distinctive clothing. This applies, for example, in the case of a police officer who, as a plain-clothes investigator, is required to wear street clothes that meet the employer's requirements (a tailored suit, overcoat and jacket).
Allowance or reimbursement for the acquisition and care of clothing
An allowance for the acquisition and care of clothing is also tax-exempt, provided:
- the amount of the allowance does not exceed a reasonable amount; and
- the allowance is for the acquisition and care of distinctive clothing that the employee is required, under the employment contract, to wear in the performance of his or her duties.
Reimbursements made to an employee for expenses related to the acquisition and care (for example, laundry or dry-cleaning costs) of distinctive clothing are tax-exempt, provided the employee submits the appropriate supporting documents and is required, under the employment contract, to wear such clothing in the performance of his or her duties.