Understanding which benefits are taxable and which are exempt from taxes is essential for both Canadian employees and employers. The CRA Taxable & Non-Taxable Benefits for 2025 clarify how different kinds of allowances and perks affect your tax obligations. According to section 6 of the Income Tax Act (ITA), most employee benefits are taxable unless specifically excluded. This guide helps Canadians quickly identify taxable benefits, determine if they owe taxes, and advise when to seek professional help for calculations or reporting.
CRA Taxable & Non-Taxable Benefits Overview 2025
| Topic | Details |
|---|---|
| Year | 2025 |
| Country | Canada |
| Managed By | Canada Revenue Agency (CRA) |
| Governing Law | Income Tax Act, Section 6 |
| Benefit Types Covered | Taxable & Non-Taxable Employment Benefits |
| How To Determine Taxable | Economic benefit to employee, primary beneficiary |
| Official Website | canada.ca |
| Category | Canada Finance |
Examples of CRA Taxable Benefits in 2025
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Gifts and awards above exempt limits
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Long service awards
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Cash or non-cash automobile/motor vehicle allowances
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Cell phone and internet allowances (cash or non-cash)
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Child care, counselling, and disability employment benefits
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Educational allowances for children
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EI premium rebates
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Housing and parking allowances
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Overtime meal allowances
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Medical and relocating expenses (cash/non-cash)
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Professional membership dues
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RRSP contributions and associated fees
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Scholarships and social event benefits
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Tool and transportation allowances
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Tuition fees and uniforms or special clothing
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Utilities allowances and benefits
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CPP/QPP, OAS, Employment Insurance, Worker’s Compensation benefits
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Investment and rental income
Examples of CRA Non-Taxable Benefits in 2025
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Most personal gifts under $500
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Lottery winnings not related to business or employment
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GST/HST credits
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Canada Child Benefit (CCB)
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Canada Carbon rebate
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Family allowance payments
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Reasonable employer-paid cell phone costs when used primarily for work
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Tuition and training related to maintaining or upgrading job skills
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Employer-paid premiums for group health or dental plans
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Counselling for re-employment, retirement, or physical/mental health
How to Determine If a Benefit Is Taxable
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Identify the benefit type using the CRA’s official lists.
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Calculate the fair market value (FMV) of the taxable benefit.
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Check if statutory deductions (CPP, EI) apply.
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Ensure the benefit is reported properly on T4 slips (Box 14, Box 26, and other relevant boxes).
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Add taxable benefits to other income when calculating total taxable earnings.
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Apply federal and provincial tax rates accordingly.
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Use eligible tax credits to reduce the total tax payable.
FAQs on CRA Taxable & Non-Taxable Benefits for 2025
Are all employer-provided benefits taxable?
No. Some benefits are non-taxable if they serve primarily business purposes or fall under specific CRA exemptions.
How can employees verify if a benefit is taxable?
Check the CRA’s official list or consult your employer’s payroll department.
Are non-taxable benefits reported on tax returns?
No, but any income generated from non-taxable benefits, such as interest, must be reported.
Does CRA withhold taxes on taxable benefits automatically?
Yes, taxable benefits are included in income and subject to tax withholdings, CPP, and EI contributions, as reported on the T4 slip.
Where can Canadians find the official CRA Taxable & Non-Taxable Benefits lists?
On the official CRA web portal at canada.ca.