Emergency Services Volunteers
Financial compensation that does not exceed $1,420 is tax-exempt if paid by a government, municipality or other public authority to a person who is:
- a volunteer firefighter
- a volunteer ambulance technician
- a volunteer assisting in the search and rescue of individuals or in other emergency operations
The exemption does not apply if, during the year, an individual worked for the same organization that paid the financial compensation and carried out duties that were similar or identical to those performed as a volunteer. For example, the exemption cannot be claimed by a volunteer firefighter who works for a municipality if that individual also has full-time or part-time employment with the municipality as a firefighter (whether the employment is permanent or the individual has temporary employment as a replacement for a firefighter).
Source deductions of income tax
If the individual meets the above-mentioned requirements, the portion of the financial compensation that exceeds $1,420 is subject to source deductions of income tax. Otherwise, the full amount of the financial compensation is subject to source deductions of income tax.
Québec Pension Plan contributions
If the individual meets the above-mentioned requirements, the portion of the financial compensation that exceeds $1,420 is subject to Québec Pension Plan (QPP) contributions. Otherwise, the full amount of the financial compensation is subject to QPP contributions.
However, if the individual participates in a rescue operation and they are not regularly employed by the employer, the work is considered to be excepted employment, and none of the amounts the individual is paid (including financial compensation) are subject to QPP contributions.
Québec parental insurance plan premiums
All amounts paid to an individual participating in emergency services (including financial compensation) are subject to Québec parental insurance plan (QPIP) premiums.
However, if the individual participates in a rescue operation and they are not regularly employed by the employer and are employed for fewer than seven days in the year, the work is considered to be excluded employment, and none of the amounts the individual is paid (including financial compensation) are subject to QPIP premiums.
Other employer contributions
If the individual meets the above-mentioned requirements, the portion of the financial compensation that exceeds $1,420 is subject to the contribution to the health services fund and, if applicable, the contribution to the Workforce Skills Development and Recognition Fund (WSDRF). You must therefore include this portion in your total payroll used to calculate your health services fund contribution rate and your participation in workforce skills development.
The portion that exceeds $1,420 is not subject to the contribution related to labour standards.
Individuals who elect to claim in their income tax return either the non-refundable tax credit for volunteer firefighters or the non-refundable tax credit for volunteers participating in search and rescue activities must include the full amount received (including the financial compensation) in their employment income. Despite this, the financial compensation is not subject to source deductions of income tax, QPP contributions, the contribution to the health services fund, the contribution related to labour standards, and, where applicable, the contribution to the WSDRF.