Overview
Non-cash or near-cash benefits
A non-cash (or “in kind”) benefit is the actual good, service, or property that you give to your employee. This includes a payment you make to a third party for the particular good or service if you are responsible for the expense.
A near-cash benefit is one that functions as cash, or something that can easily be converted to cash, such as a security, stock, or gold nugget. For more information on near-cash benefits, see Gifts, awards, and long-service awards.
CPP – When a non-cash or near-cash benefit is taxable, it is also pensionable. This means you have to deduct CPP contributions from the employee's pay. It also means that you have to pay your employer's share of CPP to the CRA.
Notes
Except for security options, if a non-cash taxable benefit is the only form of remuneration you provide to your employee in the year, there is no remuneration from which to withhold deductions. You do not have to withhold CPP contributions on the amount of the benefit, even if the value of the benefit is pensionable. Also, you do not have to remit your share of the CPP amounts.
EI – A taxable non-cash or near-cash benefit is generally not insurable. Do not deduct EI premiums.
CPP Employers Guide -Taxable Benefits/Allowances
Related Articles:
- Transaction Type - Add / Edit Transaction Types
- Admin Tools: Transaction Type
- Admin Tools: Employee Benefit Plans
How to Configure a Non-Cash Benefit
- To have this Employer Contribution be a non-cash, non-insurable taxable benefit, Transaction Type Option of Is Non-Cash Benefit would need to be checked.
This configuration will:
- Add the Employer Contribution taxable benefit amount to:
- Federal Withholding Taxable Gross for tax calculation purposes.
- CPP Taxable Gross for tax calculation purposes.
- Where applicable the Employer Health taxable gross for calculation purposes.
- Where applicable the Workers Compensation accessible earnings [WC Wage seen on Time Entry > Card View] [Excluding BC and NL].
- To have the Employer Contribution-Taxable Benefit display on the employee pay statement, Transaction Type Option of Show ER Contribution on Paycheck would need to be checked.
- To have this Employer Contribution-Taxable Benefit to pass to Box 14 and Box 40 on the T4, the user will need to configure 40 in the W2Box field.
- The user will have the ability to configure this Employer Contribution - Taxable Benefit like any other Contribution under Employee > Payroll > Contribution.
Third-party link Disclaimer: These links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by [The author] of any of the products, services, or opinions of the corporation or organization, or individual. [The author] bears no responsibility for the accuracy, legality, or content of the external site or for that of subsequent links. Contact the external site for answers to questions regarding its content.
Comments
0 commentsPlease sign in to leave a comment.