When parking is (and isn’t) a taxable benefit

If employees are allowed to park at work for free, or at a reduced rate, is this a taxable benefit?
By Sheila Brawn
|Canadian Payroll Reporter|Last Updated: 08/07/2012

The answer to the parking question is not always as straightforward as one might think, which makes it one of the more challenging taxable benefits for payroll to administer.

To avoid fines and penalties from Canada Revenue Agency (CRA)/ Revenu Québec audits and unhappy employee reactions, it’s important for payroll practitioners to understand the rules around parking as a taxable benefit, clearly communicate those rules to employees and keep accurate records on how they treat employee parking.

According to the CRA and Revenu Québec, if an employer provides parking that is free of charge or is less than the fair market value for its employees, the value of the parking is a taxable benefit and must be included in the employees’ income.