You may deduct a salary or wages paid to your spouse or child, provided:

• the work carried out was necessary to the business (that is, if you had not hired your spouse or child to do it, you would have had to hire someone else);
• the salary or wages were reasonable, and were equivalent to the amount you would have paid to a person who was not your spouse or child; and
• you actually paid the salary or wages.

You must keep all documents substantiating the salary or wages paid.

If, in lieu of monetary remuneration, your spouse or child is paid with a product from your business, you may deduct the value of the product as an operating expense.

Your spouse or child must include the remuneration (or the value of the product given in lieu of remuneration) in his or her income. In the case of a product given in lieu of remuneration, you must include the value of the product in your gross sales.

A spouse or child who receives a salary or wages is considered to be your employee, and you must therefore make source deductions and employer contributions, just as you would for any other employee.