Tax wiki
s. 6

PART I — Income Tax · DIVISION B — Computation of Income · SUBDIVISION A — Income or Loss from an Office or Employment · Inclusions

Amounts to be included as income from office or employment

Annotation in draft, not yet reviewed · Text current to 2026-06-21 · section last amended 2024-06-20

Section 6 lists what an employee or office-holder must add to salary and wages in computing income from an office or employment. Section 5 taxes the pay actually received; section 6 reaches everything else the employment produces. Paragraph 6(1)(a) includes the value of board, lodging and other benefits of any kind whatever received or enjoyed in respect of the office or employment, with six exclusions for registered and insured plans, automobile benefits, counselling, salary deferral arrangements and certain education programs. The rest of subsection 6(1) adds allowances, directors' fees, profit-sharing allocations, the automobile standby charge and operating benefit, employer contributions to some insurance plans, periodic wage-loss benefits, veterans' benefits, and receipts from employee benefit plans, employee trusts and salary deferral arrangements. The later subsections supply the formulas and deeming rules: the standby charge, payments before and after employment, group term life insurance, special work sites, employee loans, forgiven debts, insolvent disability insurers, and housing losses on relocation. This page sets out how the section developed from the 1948 benefits rule, the definitions and case law on each element, the leading decisions on what is a benefit and how it is valued, the CRA's current guidance (chiefly Guide T4130, since the benefits folio is under review), the regulations, slips and penalties that come with it, and the provincial and treaty provisions that build on it.

Pending or proposed amendment
The Department of Finance's Legislative Proposals Relating to the Income Tax Act and the Income Tax Regulations (Technical Amendments), released for consultation on 23 July 2026 with comments invited by 4 September 2026 (https://www.canada.ca/en/department-finance/corporate/laws-regulations/draft-legislation/2026/07-ita-lir.html), would by clause 1 replace subparagraph (iv) of the description of A and the description of B in paragraph 6(1)(k), replace paragraph 6(1)(l), and amend the description of A in the English version and the descriptions of A, C and E in the French version of subsection 6(2), for the 2026 and later taxation years; the explanatory notes (https://www.canada.ca/en/department-finance/corporate/laws-regulations/draft-legislation/2026/07-ita-lir/note.html) say the purpose is to extend the operating benefit and the residual rule to benefits provided to a person who does not deal at arm's length with the taxpayer, consistent with paragraphs 6(1)(a) and (e). They are not enacted. The Department's draft proposals published in September 2026 (immediate expensing and capital cost allowance for liquefied natural gas facilities) do not amend section 6. The Justice Laws consolidation (current to 21 September 2026, last amended 18 June 2026) records no later amendment, the last entry in the history note being 2024, c. 17, s. 2(F), which changed the French text of subsection 6(2) only. Administrative points: Folio S2-F3-C2, Benefits and Allowances Received from Employment, which replaced IT-470R on 7 July 2016, was removed from canada.ca in October 2017 at the Minister's request for review of its wording on employee merchandise discounts and is still posted only as "under review", so Guide T4130 (T4130(E) Rev. 25, online version modified 17 August 2026; no 2026 edition) is the CRA's operative statement; IT-470R and IT-196R2 are cancelled; and Guide RC4110, Employee or Self-employed?, was cancelled on 30 January 2026.

Current text

(1)

There shall be included in computing the income of a taxpayer for a taxation year as income from an office or employment such of the following amounts as are applicable

Value of benefits

(a)

the value of board, lodging and other benefits of any kind whatever received or enjoyed by the taxpayer, or by a person who does not deal at arm’s length with the taxpayer, in the year in respect of, in the course of, or by virtue of the taxpayer’s office or employment, except any benefit

(i)

derived from the contributions of the taxpayer’s employer to or under a deferred profit sharing plan, an employee life and health trust, a group sickness or accident insurance plan, a group term life insurance policy, a pooled registered pension plan, a private health services plan, a registered pension plan or a supplementary unemployment benefit plan,

(ii)

under a retirement compensation arrangement, an employee benefit plan or an employee trust,

(iii)

that was a benefit in respect of the use of an automobile,

(iv)

derived from counselling services in respect of

(A)

the mental or physical health of the taxpayer or an individual related to the taxpayer, other than a benefit attributable to an outlay or expense to which paragraph 18(1)(l) applies, or

(B)

the re-employment or retirement of the taxpayer,

(v)

under a salary deferral arrangement, except to the extent that the benefit is included under this paragraph because of subsection (11), or

(vi)

that is received or enjoyed by an individual other than the taxpayer under a program provided by the taxpayer’s employer that is designed to assist individuals to further their education, if the taxpayer deals with the employer at arm’s length and it is reasonable to conclude that the benefit is not a substitute for salary, wages or other remuneration of the taxpayer;

Personal or living expenses

(b)

all amounts received by the taxpayer in the year as an allowance for personal or living expenses or as an allowance for any other purpose, except

(i)

travel, personal or living expense allowances

(A)

expressly fixed in an Act of Parliament, or

(B)

paid under the authority of the Treasury Board to a person who was appointed or whose services were engaged pursuant to the Inquiries Act, in respect of the discharge of the person’s duties relating to the appointment or engagement,

(ii)

travel and separation allowances received under service regulations as a member of the Canadian Forces,

(iii)

representation or other special allowances received in respect of a period of absence from Canada as a person described in paragraph 250(1)(b), (c), (d) or (d.1),

(iv)

representation or other special allowances received by a person who is an agent-general of a province in respect of a period while the person was in Ottawa as the agent-general of the province,

(v)

reasonable allowances for travel expenses received by an employee from the employee’s employer in respect of a period when the employee was employed in connection with the selling of property or negotiating of contracts for the employee’s employer,

(v.1)

allowances for board and lodging of the taxpayer, to a maximum total of $300 for each month of the year, if

(A)

the taxpayer is, in that month, a registered participant with, or member of, a sports team or recreation program of the employer in respect of which membership or participation is restricted to persons under 21 years of age,

(B)

the allowance is in respect of the taxpayer’s participation or membership and is not attributable to services of the taxpayer as a coach, instructor trainer, referee, administrator or other similar occupation,

(C)

the employer is a registered charity or a non-profit organization described in paragraph 149(1)(l), and

(D)

the allowance is reasonably attributable to the cost to the taxpayer of living away from the place where the employee would, but for the employment, ordinarily reside,

(vi)

reasonable allowances received by a minister or clergyman in charge of or ministering to a diocese, parish or congregation for expenses for transportation incident to the discharge of the duties of that office or employment,

(vii)

reasonable allowances for travel expenses (other than allowances for the use of a motor vehicle) received by an employee (other than an employee employed in connection with the selling of property or the negotiating of contracts for the employer) from the employer for travelling away from

(A)

the municipality where the employer’s establishment at which the employee ordinarily worked or to which the employee ordinarily reported was located, and

(B)

the metropolitan area, if there is one, where that establishment was located,

in the performance of the duties of the employee’s office or employment,

(vii.1)

reasonable allowances for the use of a motor vehicle received by an employee (other than an employee employed in connection with the selling of property or the negotiating of contracts for the employer) from the employer for travelling in the performance of the duties of the office or employment,

(viii)

[Repealed, 1999, c. 22, s. 2]

(ix)

allowances (not in excess of reasonable amounts) received by an employee from the employee’s employer in respect of any child of the employee living away from the employee’s domestic establishment in the place where the employee is required by reason of the employee’s employment to live and in full-time attendance at a school in which the language primarily used for instruction is the official language of Canada primarily used by the employee if

(A)

a school suitable for that child primarily using that language of instruction is not available in the place where the employee is so required to live, and

(B)

the school the child attends primarily uses that language for instruction and is not farther from that place than the community nearest to that place in which there is such a school having suitable boarding facilities,

and, for the purposes of subparagraphs (v), (vi) and (vii.1), an allowance received in a taxation year by a taxpayer for the use of a motor vehicle in connection with or in the course of the taxpayer’s office or employment shall be deemed not to be a reasonable allowance

(x)

where the measurement of the use of the vehicle for the purpose of the allowance is not based solely on the number of kilometres for which the vehicle is used in connection with or in the course of the office or employment, or

(xi)

where the taxpayer both receives an allowance in respect of that use and is reimbursed in whole or in part for expenses in respect of that use (except where the reimbursement is in respect of supplementary business insurance or toll or ferry charges and the amount of the allowance was determined without reference to those reimbursed expenses);

Director’s or other fees

(c)

director’s or other fees received by the taxpayer in the year in respect of, in the course of, or by virtue of an office or employment;

Allocations, etc., under profit sharing plan

(d)

amounts allocated to the taxpayer in the year by a trustee under an employees profit sharing plan as provided by section 144 except subsection 144(4), and amounts required by subsection 144(7) to be included in computing the taxpayer’s income for the year;

Standby charge for automobile

(e)

if at any time in the year an automobile is made available to the taxpayer, or to a particular person who does not deal at arm’s length with the taxpayer, by another person (referred to in this paragraph as “the employer”) because of or as a consequence of a previous, the current or an intended office or employment of the taxpayer, the amount, if any, by which

(i)

an amount that is a reasonable standby charge for the automobile for the total number of days in the year during which it was made so available

exceeds

(ii)

the total of all amounts, each of which is an amount (other than an expense related to the operation of the automobile) paid in the year by the taxpayer, or the particular person who does not deal at arm’s length with the taxpayer, to the employer for the use of the automobile;

Group sickness or accident insurance plans

(e.1)

the total of all amounts contributed in the year in respect of the taxpayer by the taxpayer’s employer to a group sickness or accident insurance plan, except to the extent that the contributions are attributable to benefits under the plan that, if received by the taxpayer, would be included in the taxpayer’s income under paragraph (f) in the year the benefits are received if that paragraph were read without regard to its subparagraph (v);

Employment insurance benefits

(f)

the total of all amounts received by the taxpayer in the year that were payable to the taxpayer on a periodic basis in respect of the loss of all or any part of the taxpayer’s income from an office or employment, pursuant to

(i)

a sickness or accident insurance plan,

(ii)

a disability insurance plan,

(iii)

an income maintenance insurance plan, or

(iii.1)

a plan described in any of subparagraphs (i) to (iii) that is administered or provided by an employee life and health trust,

to or under which the taxpayer’s employer has made a contribution, not exceeding the amount, if any, by which

(iv)

the total of all such amounts received by the taxpayer pursuant to the plan before the end of the year and

(A)

where there was a preceding taxation year ending after 1971 in which any such amount was, by virtue of this paragraph, included in computing the taxpayer’s income, after the last such year, and

(B)

in any other case, after 1971,

exceeds

(v)

the total of the contributions made by the taxpayer under the plan before the end of the year and

(A)

where there was a preceding taxation year described in clause (iv)(A), after the last such year, and

(B)

in any other case, after 1967;

Canadian Forces members and veterans amounts

(f.1)

the total of all amounts received by the taxpayer in the year on account of

(i)

an earnings loss benefit, an income replacement benefit (other than an amount determined under subsection 19.1(1), paragraph 23(1)(b) or subsection 26.1(1) of the Veterans Well-being Act, as modified, where applicable, under Part 5 of that Act), a supplementary retirement benefit or a career impact allowance payable to the taxpayer under Part 2 of the Veterans Well-being Act, or

(ii)

an amount payable under any of subsections 99(6), 109(1) and 115(5) and sections 124 to 126 of the Veterans Well-being Act;

Employee benefit plan benefits

(g)

the total of all amounts each of which is an amount received by the taxpayer in the year out of or under an employee benefit plan or from the disposition of any interest in any such plan, other than the portion thereof that is

(i)

a death benefit or an amount that would, but for the deduction provided in the definition of that term in subsection 248(1), be a death benefit,

(ii)

a return of amounts contributed to the plan by the taxpayer or a deceased employee of whom the taxpayer is an heir or legal representative, to the extent that the amounts were not deducted in computing the taxable income of the taxpayer or the deceased employee for any taxation year,

(iii)

a superannuation or pension benefit attributable to services rendered by a person in a period throughout which the person was not resident in Canada, or

(iv)

a designated employee benefit (as defined in subsection 144.1(1));

Employee trust

(h)

amounts allocated to the taxpayer for the year by a trustee under an employee trust;

Salary deferral arrangement payments

(i)

the amount, if any, by which the total of all amounts received by any person as benefits (other than amounts received by or from a trust governed by a salary deferral arrangement) in the year out of or under a salary deferral arrangement in respect of the taxpayer exceeds the amount, if any, by which

(i)

the total of all deferred amounts under the arrangement that were included under paragraph 6(1)(a) as benefits in computing the taxpayer’s income for preceding taxation years

exceeds

(ii)

the total of

(A)

all deferred amounts received by any person in preceding taxation years out of or under the arrangement, and

(B)

all deferred amounts under the arrangement that were deducted under paragraph 8(1)(o) in computing the taxpayer’s income for the year or preceding taxation years;

Reimbursements and awards

(j)

amounts received by the taxpayer in the year as an award or reimbursement in respect of an amount that would, if the taxpayer were entitled to no reimbursements or awards, be deductible under subsection 8(1) in computing the income of the taxpayer, except to the extent that the amounts so received

(i)

are otherwise included in computing the income of the taxpayer for the year, or

(ii)

are taken into account in computing the amount that is claimed under subsection 8(1) by the taxpayer for the year or a preceding taxation year;

Automobile operating expense benefit

(k)

where

(i)

an amount is determined under subparagraph 6(1)(e)(i) in respect of an automobile in computing the taxpayer’s income for the year,

(ii)

amounts related to the operation (otherwise than in connection with or in the course of the taxpayer’s office or employment) of the automobile for the period or periods in the year during which the automobile was made available to the taxpayer, or a person who does not deal at arm’s length with the taxpayer, are paid or payable by the employer within the meaning of paragraph (e) that made the automobile available (in this paragraph referred to as the “payor”), and

(iii)

the total of the amounts so paid or payable is not paid in the year or within 45 days after the end of the year to the payor by the taxpayer or by the person related to the taxpayer,

the amount in respect of the operation of the automobile determined by the formula

A - B

where

(iv)

where the automobile is used primarily in the performance of the duties of the taxpayer’s office or employment during the period or periods referred to in subparagraph (ii) and the taxpayer notifies the employer in writing before the end of the year of the taxpayer’s intention to have this subparagraph apply, 1/2 of the amount determined under subparagraph 6(1)(e)(i) in respect of the automobile in computing the taxpayer’s income for the year, and

(v)

in any other case, the amount equal to the product obtained when the amount prescribed for the year is multiplied by the total number of kilometres that the automobile is driven (otherwise than in connection with or in the course of the taxpayer’s office or employment) during the period or periods referred to in subparagraph 6(1)(k)(ii), and

is the total of all amounts in respect of the operation of the automobile in the year paid in the year or within 45 days after the end of the year to the payor by the taxpayer or by the person related to the taxpayer; and

Where standby charge does not apply

(l)

the value of a benefit in respect of the operation of an automobile (other than a benefit to which paragraph (k) applies or would apply but for subparagraph (k)(iii)) received or enjoyed by the taxpayer, or by a person related to the taxpayer, in the year in respect of, in the course of or because of, the taxpayer’s office or employment.

Terms used in subsection (1) 47

taxpayer defined in the Act subsection 248(1)

“Taxpayer includes any person whether or not liable to pay tax.” The inclusions are computed for any holder of an office or employment, but because both “office” and “employment” are positions of an individual, section 6 operates in practice on individuals. None of the three further statutes adds anything.

taxation year; the year Act and Interpretation Act subsection 249(1)

For an individual a taxation year is, “in any other case, a calendar year” (paragraph 249(1)(c)), so “the year” in section 6 is the calendar year, matching T4 reporting. Subsection 37(1) of the Interpretation Act defines “year” as twelve consecutive months and a calendar year as one beginning on 1 January, which adds nothing to section 249. The Income Tax Application Rules and the Income Tax Conventions Interpretation Act add nothing.

office; officer defined in the Act subsection 248(1)

“Office means the position of an individual entitling the individual to a fixed or ascertainable stipend or remuneration”, expressly including judicial, ministerial and legislative offices, elected and representative offices, and “the position of a corporation director”, “and officer means a person holding such an office”. Section 6 treats an office and an employment alike, which is why directors’ fees under paragraph 6(1)(c) are employment income. None of the three further statutes adds anything.

employment; employee Act and Interpretation Act subsection 248(1)

“Employment means the position of an individual in the service of some other person (including Her Majesty or a foreign state or sovereign) and servant or employee means a person holding such a position”; “employee includes officer”, so the allowance exceptions stated for “an employee” reach office-holders. Section 144.1 has its own narrower definition. Subsection 35(1) of the Interpretation Act defines “Her Majesty”; under section 3 of the Income Tax Conventions Interpretation Act an undefined treaty term takes its meaning under the Act; the Income Tax Application Rules add nothing.

amount defined in the Act subsection 248(1)

“Amount means money, rights or things expressed in terms of the amount of money or the value in terms of money of the right or thing”; the remainder concerns stock dividends. The money-based inclusions in section 6 therefore reach rights and things measured at their money value. None of the three further statutes adds anything.

value; fair market value defined by the courts Schroter v. Canada, 2010 FCA 98, paras. 44 to 48

The Act defines neither word. A paragraph 6(1)(a) benefit is valued at fair market value, what the employee would pay at arm’s length, not at the employer’s cost or the employee’s “cost saved”; equal treatment of taxpayers “is facilitated by valuing their benefits at their fair market value” (Schroter, para. 47; Canada v. Spence, 2011 FCA 200, paras. 10 and 15 to 19). Paragraph 6(15)(b) displaces the rule for forgiven debts, and subsection 6(21) uses fair market value of a residence as a component of the housing loss. No general definition of fair market value was verified. None of the three further statutes adds anything.

benefit defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

The Act does not define “benefit”. “Benefits of whatever kind” is “clearly quite broad” and reaches any “material acquisition which confers an economic benefit on the taxpayer” that is not an exempt receipt (Savage, at 441). The purpose is to tax “all forms of compensation … whether in money or in money’s worth” (Smith v. Canada, 2019 FCA 173, para. 34), and where value flows both ways the “primary beneficiary” concept from Lowe v. Canada, 96 DTC 6226 (F.C.A.), not opened, is useful (Smith, para. 44). Subsections 6(11), (15), (19), (20) and (23) deem particular amounts to be benefits; paragraph 6(18)(a) deems a top-up payment not to be one. None of the three further statutes adds anything.

received or enjoyed defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 441

The phrase is undefined. The $300 award in Savage “was a benefit and was received or enjoyed by her in respect of, in the course of or by virtue of her employment within the meaning of s. 6(1)(a)” (at 441); the pairing covers both receipts and in-kind use. Paragraph 6(15)(a) deems a benefit “enjoyed” when a debt is settled or extinguished. None of the three further statutes adds anything.

person Act and Interpretation Act subsection 248(1)

“Person” includes any corporation, an entity exempt from Part I tax under subsection 149(1), and the heirs, executors, liquidators, administrators or other legal representatives of a person. Benefits conferred on a non-arm’s-length corporation, and employers that are corporations, are therefore within the section. Subsection 35(1) of the Interpretation Act also makes “person” include a corporation, which the Act already covers; the other two statutes add nothing.

arm’s length defined in the Act subsection 251(1)

“Related persons shall be deemed not to deal with each other at arm’s length” (paragraph 251(1)(a)); for unrelated persons it is “a question of fact” (paragraph 251(1)(c)). Section 6 uses the test to stop benefits being diverted to family members or controlled entities (paragraphs 6(1)(a), (e) and (k), and subsections 6(1.2), 6(2) and 6(19) to (22)) and as a condition of the education exception in subparagraph 6(1)(a)(vi). None of the three further statutes adds anything.

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

The Court applied to paragraph 6(1)(a) its statement in Nowegijick v. The Queen, [1983] 1 S.C.R. 29, at 39, that “in respect of” are “words of the widest possible scope”, importing “in relation to”, “with reference to” or “in connection with”; the award had no element of gift, personal bounty or considerations extraneous to the employment (at 441). The Nowegijick passage, read on the Supreme Court’s site, adds that the phrase “is probably the widest of any expression intended to convey some connection between two related subject matters” (at 39). None of the three further statutes adds anything.

employer defined in the Act subsection 248(1); subsection 6(17)

In subsection 248(1), “employer, in relation to an officer, means the person from whom the officer receives the officer’s remuneration”. Subsection 6(17) adds, for subsections 6(17) and (18), that an employer “includes a former employer”. Paragraph 6(1)(e) and subsection 6(2) call the person who makes the automobile available “the employer”, and paragraph 6(1)(k) adopts that meaning. Section 19 of the Income Tax Application Rules keeps paragraph 6(1)(f) from applying to amounts payable for a loss from an event before 1974 under a plan established before 19 June 1971; the other two statutes add nothing.

employee life and health trust defined in the Act subsection 144.1(2)

A trust for employees of participating employers whose “only purpose … is to provide benefits” to specified persons and “all or substantially all” of whose cost relates to designated employee benefits. Employer contributions are excluded from paragraph 6(1)(a), and wage-loss plans it administers are brought within paragraph 6(1)(f) by subparagraph (iii.1). None of the three further statutes adds anything.

group term life insurance policy Act and Regulations subsection 248(1)

A group life policy under which the only amounts payable are amounts on the death or disability of individuals insured “in respect of, in the course of or because of, their office or employment or former office or employment”, and policy dividends or experience rating refunds. Contributions are excluded from paragraph 6(1)(a); subsection 6(4) instead includes the amount prescribed by section 2701 of the Regulations. None of the three further statutes adds anything.

pooled registered pension plan defined in the Act subsection 147.5(1)

“A pooled pension plan that has been accepted for registration by the Minister for the purposes of this Act, which registration has not been revoked.” Employer contributions are excluded from paragraph 6(1)(a). The “superannuation, pension or retirement plan” limb of “pension” in section 5 of the Income Tax Conventions Interpretation Act may reach PRPP payments, an inference since PRPPs are not named; the other two statutes add nothing.

private health services plan defined in the Act subsection 248(1)

“(a) a contract of insurance in respect of hospital expenses, medical expenses or any combination of such expenses, or (b) a medical care insurance plan or hospital care insurance plan or any combination of such plans”, excluding provincial health insurance plans and certain federal plans. Employer contributions are excluded from paragraph 6(1)(a); the CRA requires an element of insurance risk (IT-339R2, para. 3; IT-529, para. 16; technical interpretation 2017-0703871C6). None of the three further statutes adds anything.

registered pension plan Act and Income Tax Conventions Interpretation Act subsection 248(1)

“A pension plan (other than a pooled pension plan) that has been registered by the Minister for the purposes of this Act and whose registration has not been revoked.” Employer contributions are excluded from paragraph 6(1)(a) because the pension is taxed on receipt under section 56. Section 5 of the Income Tax Conventions Interpretation Act lists RPP payments as a “pension”; the other two statutes add nothing.

supplementary unemployment benefit plan defined in the Act subsection 145(1)

An arrangement under which an employer pays a trustee “exclusively for the payment of periodic amounts to employees or former employees of the employer who are or may be laid off for any temporary or indefinite period”. Employer contributions are excluded from paragraph 6(1)(a). None of the three further statutes adds anything.

retirement compensation arrangement Act and Income Tax Conventions Interpretation Act subsection 248(1)

A plan under which an employer or former employer contributes to a custodian in connection with benefits on, after or in contemplation of retirement, loss of office or employment or a substantial change in services, with a long list of exclusions, including salary deferral arrangements. Benefits under an RCA are excluded from paragraph 6(1)(a) because Part XI.3 and section 56 govern them. Section 5 of the Income Tax Conventions Interpretation Act includes RCA payments in “pension”; the other two statutes add nothing.

employee benefit plan defined in the Act subsection 248(1)

An arrangement under which an employer or non-arm’s-length person contributes to a custodian and payments are made to or for employees, former employees or persons not at arm’s length with them, excluding the plans in subparagraph 6(1)(a)(i) and paragraphs 6(1)(d) and (f), employee trusts, employee ownership trusts, certain salary deferral arrangements, RCAs and prescribed arrangements. None of the three further statutes adds anything.

employee trust defined in the Act subsection 248(1)

An arrangement established after 1979 under which employers pay a trustee solely to provide employees with benefits that vest at each payment and do not depend on “the individual’s position, performance or compensation as an employee”, with annual allocation of receipts and income and an election in the trust’s first return. Paragraph 6(1)(h) taxes allocations; subsection 6(10) deals with a plan that was formerly an employee trust. None of the three further statutes adds anything.

automobile defined in the Act subsection 248(1)

“A motor vehicle that is designed or adapted primarily to carry individuals on highways and streets and that has a seating capacity for not more than the driver and 8 passengers”, excluding emergency vehicles, taxis, buses and hearses used in those businesses, and certain vans and pick-up trucks used to transport goods, equipment or passengers in earning income. Paragraph (d) excludes dealer inventory “except for the purposes of sections 6 and 15”, which keeps demonstrators within the standby charge. None of the three further statutes adds anything.

individual defined in the Act subsection 248(1)

“Individual means a person other than a corporation.” In section 6 it denotes human persons: relatives, employees, disabled employees and the borrower under subsection 6(9). None of the three further statutes adds anything.

salary deferral arrangement defined in the Act subsection 248(1)

“A plan or arrangement, whether funded or not, under which any person has a right in a taxation year to receive an amount after the year” where “one of the main purposes” is to postpone tax on salary or wages, conditional rights included unless there is a substantial risk a condition will fail; registered plans, bonuses paid within three years, prescribed plans and other arrangements are excluded. Subsection 6(11) taxes the deferred amount annually through paragraph 6(1)(a). None of the three further statutes adds anything.

reasonable defined by the courts Ville de Beauport v. Canada (Minister of National Revenue), 2001 FCA 198, paras. 16 to 21

“Reasonable” is undefined. A motor-vehicle allowance not based solely on kilometres actually driven is deemed unreasonable by subparagraph 6(1)(b)(x), estimates from a prior period not sufficing (paras. 16 to 18), and reasonableness is tested for the allowance paid to each employee, not by arm’s-length negotiation of the policy (para. 21). In subsection 6(2) the “reasonable standby charge” is a deemed formula amount (Gill v. The Queen, 2005 TCC 244, para. 7). None of the three further statutes adds anything.

salary or wages defined in the Act subsection 248(1)

“Except in sections 5 and 63 and the definition death benefit”, salary or wages “means the income of a taxpayer from an office or employment as computed under Subdivision A of Division B of Part I”. Subparagraph 6(1)(a)(vi) uses the related phrase “salary, wages or other remuneration” to test whether an education benefit for a family member substitutes for pay, and the defined term is embedded in the salary deferral arrangement definition. None of the three further statutes adds anything.

remuneration defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440

The Act does not define “remuneration”. Savage rejected the narrower English test that a receipt must “partake of the character of remuneration for services” (at 440), and Smith, 2019 FCA 173, para. 33, notes that subsection 5(1) includes “other remuneration”. Subsection 6(3) deems certain payments to be “remuneration for the payee’s services” for the purposes of section 5 unless the taxpayer establishes otherwise. None of the three further statutes adds anything.

allowance defined by the courts Canada (Attorney General) v. MacDonald, [1994] 2 C.T.C. 48, 94 DTC 6262 (F.C.A.), not opened, as applied in Bériault v. Canada, 2003 FCA 430, paras. 3 to 7; Ransom v. M.N.R., [1968] 1 Ex. C.R. 293

“Allowance” is undefined. Ransom held that a reimbursement of an expense or loss actually incurred is not an allowance, because “an allowance implies an amount paid in respect of some possible expense without any obligation to account” (at 309); it is “an arbitrary amount usually paid in lieu of reimbursement”, which the employee may use as he wishes, and so can serve as “a concealed increase in remuneration” (at 310). Bériault applied “the three tests laid down by this Court in MacDonald”: an arbitrary amount not corresponding to an actual expense (para. 4), paid for a specific purpose (para. 6), which the recipient may use at his or her discretion without accounting (para. 7). A documented reimbursement is not an allowance. Subparagraphs 6(1)(b)(i) to (ix) and subsections 6(6) and 6(16) exclude particular allowances. None of the three further statutes adds anything.

Canada Act, Interpretation Act and Income Tax Conventions Interpretation Act section 255

For the Act, Canada includes the seabed and subsoil of adjacent submarine areas, with the seas and airspace above, in respect of mineral and hydrocarbon rights. Subsection 35(1) of the Interpretation Act adds Canada’s internal waters and territorial sea and defines “province” to include the three territories, which bears on the agent-general exception in subparagraph 6(1)(b)(iv). Section 5 of the Income Tax Conventions Interpretation Act has its own definition for convention purposes; the Income Tax Application Rules add nothing.

property defined in the Act subsection 248(1)

“Property means property of any kind whatever whether real or personal, immovable or movable, tangible or intangible, or corporeal or incorporeal”, including rights, shares, choses in action and money. It matters for the selling-of-property travel exception, the cost rule in subsection 6(7), the GST rebate rule in subsection 6(8) and the cost amount in subsection 6(10). None of the three further statutes adds anything.

registered charity defined in the Act subsection 248(1)

A charitable organization, private foundation or public foundation resident and created in Canada, registered at the relevant time. An employer that is a registered charity or a paragraph 149(1)(l) non-profit organization may pay the youth sports and recreation board-and-lodging allowance excluded by subparagraph 6(1)(b)(v.1). None of the three further statutes adds anything.

motor vehicle defined in the Act subsection 248(1)

“Motor vehicle means an automotive vehicle designed or adapted to be used on highways and streets”, excluding trolley buses and rail vehicles. The allowance rules in paragraph 6(1)(b) and the parking rule in subsection 6(1.1) use this wider term; the standby charge uses “automobile” (Servais v. The Queen, 2003 FCA 329, para. 11). None of the three further statutes adds anything.

business defined in the Act subsection 248(1)

“Business includes a profession, calling, trade, manufacture or undertaking of any kind whatever” and generally an adventure in the nature of trade, “but does not include an office or employment”. It appears in “supplementary business insurance” in subparagraph 6(1)(b)(xi) and in the automobiles acquired “in the course of the employer’s business” in subsection 6(2.1). None of the three further statutes adds anything.

trust; trustee defined in the Act subsection 248(1); subsection 104(1)

“Trust has the meaning assigned by subsection 104(1)”, under which a reference to a trust includes the trustee or other legal representative having ownership or control of the trust property. Section 6 refers to trustees’ allocations under EPSPs and employee trusts and to “a trust governed by a salary deferral arrangement” (paragraph 6(1)(i), subsection 6(12)). None of the three further statutes adds anything.

made available defined by the courts Canada v. Adams, [1998] 3 F.C. 365 (C.A.), as applied in Martin v. The Queen, 2009 TCC 3, para. 118

The words are undefined. Adams read the English text with the French “mis … à sa disposition” and “droit d’usage”: an automobile is made available to an employee “if it is at his or her disposal and there is a concomitant right of usage”, and “actual usage by an employee, for either personal or business purposes, is not expressly required” (reasons of Robertson J.A.). Restrictions imposed by the employer on use, such as keeping a dealership demonstrator on the lot during business hours, do not prevent the car from being made available, and a lease from the employer at a price the market would regard as fair does not displace the formula unless the lease is on the terms offered to arm’s length customers in the ordinary course of the employer’s business. Martin, 2009 TCC 3, para. 118, applies the same test. None of the three further statutes adds anything.

disposition defined in the Act subsection 248(1)

“Disposition of any property, except as expressly otherwise provided, includes” any transaction entitling the taxpayer to proceeds, redemptions, settlements and certain trust transfers. Paragraph 6(1)(g) includes amounts from “the disposition of any interest” in an employee benefit plan; paragraph 6(21)(c) turns on a disposition of the residence. None of the three further statutes adds anything.

death benefit defined in the Act subsection 248(1)

Amounts received “on or after the death of an employee in recognition of the employee’s service in an office or employment”, less up to $10,000. Subparagraph 6(1)(g)(i) excludes a death benefit, and the exempt portion, from EBP receipts because section 56 taxes it. None of the three further statutes adds anything.

legal representative defined in the Act subsection 248(1)

A trustee in bankruptcy, liquidator, receiver, trustee, heir, administrator, executor or like person acting “in a representative or fiduciary capacity” for the taxpayer’s property or estate. Subparagraph 6(1)(g)(ii) and subsection 6(10) let an heir or legal representative recover a deceased employee’s non-deducted contributions free of tax. None of the three further statutes adds anything.

taxable income defined in the Act subsection 248(1)

“Taxable income has the meaning assigned by subsection 2(2), except that in no case may a taxpayer’s taxable income be less than nil.” A return of contributions under subparagraph 6(1)(g)(ii) is excluded only to the extent the contributions “were not deducted in computing the taxable income”. None of the three further statutes adds anything.

superannuation or pension benefit Act and Income Tax Conventions Interpretation Act subsection 248(1)

“Includes any amount received out of or under a superannuation or pension fund or plan.” Subparagraph 6(1)(g)(iii) excludes from EBP receipts such a benefit attributable to services rendered while the person was not resident in Canada. Section 5 of the Income Tax Conventions Interpretation Act includes “a superannuation, pension or retirement plan” in “pension”; the other two statutes add nothing.

resident in Canada; non-resident Act and Income Tax Conventions Interpretation Act subsection 250(1); subsection 248(1)

“Non-resident means not resident in Canada”; subsection 250(1) deems certain persons resident, including Canadian Forces members and officers serving abroad, to whom subparagraph 6(1)(b)(iii) refers. Subsection 6(13) turns on non-resident employees and the “excluded period”. Section 3 of the Income Tax Conventions Interpretation Act gives an undefined convention term its meaning under the Act; the other two statutes add nothing. Common-law residence is not covered here.

designated employee benefit defined in the Act subsection 144.1(1)

A benefit from a group sickness or accident insurance plan, group term life insurance policy or private health services plan, a counselling benefit described in subparagraph 6(1)(a)(iv), or an amount that would be a death benefit if the $10,000 exclusion were nil. Such benefits paid out of an EBP are excluded from paragraph 6(1)(g) by subparagraph (iv). None of the three further statutes adds anything.

deferred amount defined in the Act subsection 248(1)

In general, “any amount that a person has a right under the arrangement at the end of the year to receive after the end of the year”, conditional rights counting unless there is a substantial risk a condition will not be satisfied. Subsection 6(11) deems it a paragraph 6(1)(a) benefit; subsection 6(12) adds accrued interest. None of the three further statutes adds anything.

prescribed Act and Regulations subsection 248(1)

For a form, authorized by the Minister; “in any other case, prescribed by regulation or determined in accordance with rules prescribed by regulation”. Section 7305.1 of the Regulations prescribes the per-kilometre amount for subparagraph 6(1)(k)(v), consolidated at 34 cents, or 31 cents for those employed principally in selling or leasing automobiles; section 2701 prescribes the subsection 6(4) amount. None of the three further statutes adds anything.

Parking cost

(1.1)

For the purposes of this section, an amount or a benefit in respect of the use of a motor vehicle by a taxpayer does not include any amount or benefit related to the parking of the vehicle.

Terms used in subsection (1.1) 5

taxpayer defined in the Act subsection 248(1)

amount defined in the Act subsection 248(1)

benefit defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

motor vehicle defined in the Act subsection 248(1)

Deeming rule — amount received

(1.2)

For the purposes of paragraph (1)(g), an amount received by an individual out of or under an employee benefit plan is deemed to have been received by a taxpayer and not by the individual if

(a)

the individual does not deal at arm’s length with the taxpayer;

(b)

the amount is received in respect of an office or employment of the taxpayer; and

(c)

the taxpayer is living at the time the amount is received by the individual.

Terms used in subsection (1.2) 7

taxpayer defined in the Act subsection 248(1)

amount defined in the Act subsection 248(1)

benefit defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

arm’s length defined in the Act subsection 251(1)

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

employee benefit plan defined in the Act subsection 248(1)

individual defined in the Act subsection 248(1)

Reasonable standby charge

(2)

For the purposes of paragraph (1)(e), a reasonable standby charge for an automobile for the total number of days (in this subsection referred to as the “total available days”) in a taxation year during which the automobile is made available to a taxpayer, or to a person who does not deal at arm’s length with the taxpayer, by a person (referred to in this subsection as the “employer”) shall be deemed to be the amount determined by the formula

A/B × [2% × (C × D) + 2/3 × (E - F)]

where

(a)

the lesser of the total kilometres that the automobile is driven (otherwise than in connection with or in the course of the taxpayer’s office or employment) during the total available days and the value determined for the description of B for the year in respect of the standby charge for the automobile during the total available days, if

(i)

the taxpayer is required by the employer to use the automobile in connection with or in the course of the office or employment, and

(ii)

the distance travelled by the automobile in the total available days is primarily in connection with or in the course of the office or employment, and

(b)

the value determined for the description of B for the year in respect of the standby charge for the automobile during the total available days, in any other case;

is the product obtained when 1,667 is multiplied by the quotient obtained by dividing the total available days by 30 and, if the quotient so obtained is not a whole number and exceeds one, by rounding it to the nearest whole number or, where that quotient is equidistant from two consecutive whole numbers, by rounding it to the lower of those two numbers;

is the cost of the automobile to the employer where the employer owns the vehicle at any time in the year;

is the number obtained by dividing such of the total available days as are days when the employer owns the automobile by 30 and, if the quotient so obtained is not a whole number and exceeds one, by rounding it to the nearest whole number or, where that quotient is equidistant from two consecutive whole numbers, by rounding it to the lower of those two numbers;

is the total of all amounts that may reasonably be regarded as having been payable by the employer to a lessor for the purpose of leasing the automobile during such of the total available days as are days when the automobile is leased to the employer; and

is the part of the amount determined for E that may reasonably be regarded as having been payable to the lessor in respect of all or part of the cost to the lessor of insuring against

(a)

loss of, or damage to, the automobile, or

(b)

liability resulting from the use or operation of the automobile.

Terms used in subsection (2) 13

total available days defined in the Act subsection 6(2)

In subsection 6(2), the total number of days in a taxation year during which the automobile is made available to the taxpayer or a non-arm’s-length person is “referred to in this subsection as the ‘total available days’”. The figure drives elements B and D of the standby-charge formula, each computed by dividing by 30 and rounding. The formulation dates from S.C. 1988, c. 55, s. 1, applicable to 1988 and later years.

taxpayer defined in the Act subsection 248(1)

taxation year; the year Act and Interpretation Act subsection 249(1)

office; officer defined in the Act subsection 248(1)

employment; employee Act and Interpretation Act subsection 248(1)

amount defined in the Act subsection 248(1)

person Act and Interpretation Act subsection 248(1)

arm’s length defined in the Act subsection 251(1)

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

employer defined in the Act subsection 248(1); subsection 6(17)

automobile defined in the Act subsection 248(1)

reasonable defined by the courts Ville de Beauport v. Canada (Minister of National Revenue), 2001 FCA 198, paras. 16 to 21

made available defined by the courts Canada v. Adams, [1998] 3 F.C. 365 (C.A.), as applied in Martin v. The Queen, 2009 TCC 3, para. 118

Automobile salesperson

(2.1)

Where in a taxation year

(a)

a taxpayer was employed principally in selling or leasing automobiles,

(b)

an automobile owned by the taxpayer’s employer was made available by the employer to the taxpayer or to a person related to the taxpayer, and

(c)

the employer has acquired one or more automobiles,

the amount that would otherwise be determined under subsection 6(2) as a reasonable standby charge shall, at the option of the employer, be computed as if

(d)

the reference in the formula in subsection 6(2) to “2%” were read as a reference to “1 1/2%”, and

(e)

the cost to the employer of the automobile were the greater of

(i)

the quotient obtained by dividing

(A)

the cost to the employer of all new automobiles acquired by the employer in the year for sale or lease in the course of the employer’s business

(B)

the number of automobiles described in clause 6(2.1)(e)(i)(A), and

(ii)

the quotient obtained by dividing

(A)

the cost to the employer of all automobiles acquired by the employer in the year for sale or lease in the course of the employer’s business

(B)

the number of automobiles described in clause 6(2.1)(e)(ii)(A).

Terms used in subsection (2.1) 10

taxpayer defined in the Act subsection 248(1)

taxation year; the year Act and Interpretation Act subsection 249(1)

amount defined in the Act subsection 248(1)

person Act and Interpretation Act subsection 248(1)

employer defined in the Act subsection 248(1); subsection 6(17)

automobile defined in the Act subsection 248(1)

reasonable defined by the courts Ville de Beauport v. Canada (Minister of National Revenue), 2001 FCA 198, paras. 16 to 21

business defined in the Act subsection 248(1)

made available defined by the courts Canada v. Adams, [1998] 3 F.C. 365 (C.A.), as applied in Martin v. The Queen, 2009 TCC 3, para. 118

COVID-19 — automobile operating expense benefit

(2.2)

If a taxpayer met the condition in subparagraph (iv) of the description of A in paragraph (1)(k) for the 2019 taxation year in respect of the use of an automobile made available to the taxpayer, or to a person related to the taxpayer, by an employer (within the meaning assigned by subsection (2)), then for the purpose of applying paragraph (1)(k) in respect of an automobile provided by that employer in 2020 or 2021 (referred to in this subsection as the “relevant year”), the amount determined for A in paragraph (1)(k) in respect of the automobile for the relevant year is deemed to be the lesser of

(a)

½ of the amount determined under subparagraph (1)(e)(i) in respect of the automobile for the relevant year, and

(b)

the amount determined under subparagraph (v) of the description of A in paragraph (1)(k) in respect of the automobile for the relevant year.

Terms used in subsection (2.2) 9

taxpayer defined in the Act subsection 248(1)

taxation year; the year Act and Interpretation Act subsection 249(1)

amount defined in the Act subsection 248(1)

person Act and Interpretation Act subsection 248(1)

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

employer defined in the Act subsection 248(1); subsection 6(17)

automobile defined in the Act subsection 248(1)

made available defined by the courts Canada v. Adams, [1998] 3 F.C. 365 (C.A.), as applied in Martin v. The Queen, 2009 TCC 3, para. 118

COVID-19 — reasonable standby charge

(2.3)

A taxpayer is deemed to meet the condition in subparagraph (a)(ii) of the description of A in subsection (2) in respect of an employer (within the meaning assigned by subsection (2)) for the 2020 or 2021 taxation year if the taxpayer met the conditions in subparagraphs (a)(i) and (ii) of the description of A in subsection (2) for the 2019 taxation year in respect of an automobile made available to the taxpayer, or to a person related to the taxpayer, by that employer.

Terms used in subsection (2.3) 8

taxpayer defined in the Act subsection 248(1)

taxation year; the year Act and Interpretation Act subsection 249(1)

person Act and Interpretation Act subsection 248(1)

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

employer defined in the Act subsection 248(1); subsection 6(17)

automobile defined in the Act subsection 248(1)

made available defined by the courts Canada v. Adams, [1998] 3 F.C. 365 (C.A.), as applied in Martin v. The Queen, 2009 TCC 3, para. 118

Payments by employer to employee

(3)

An amount received by one person from another

(a)

during a period while the payee was an officer of, or in the employment of, the payer, or

(b)

on account, in lieu of payment or in satisfaction of an obligation arising out of an agreement made by the payer with the payee immediately prior to, during or immediately after a period that the payee was an officer of, or in the employment of, the payer,

shall be deemed, for the purposes of section 5, to be remuneration for the payee’s services rendered as an officer or during the period of employment, unless it is established that, irrespective of when the agreement, if any, under which the amount was received was made or the form or legal effect thereof, it cannot reasonably be regarded as having been received

(c)

as consideration or partial consideration for accepting the office or entering into the contract of employment,

(d)

as remuneration or partial remuneration for services as an officer or under the contract of employment, or

(e)

in consideration or partial consideration for a covenant with reference to what the officer or employee is, or is not, to do before or after the termination of the employment.

Terms used in subsection (3) 6

office; officer defined in the Act subsection 248(1)

employment; employee Act and Interpretation Act subsection 248(1)

amount defined in the Act subsection 248(1)

person Act and Interpretation Act subsection 248(1)

reasonable defined by the courts Ville de Beauport v. Canada (Minister of National Revenue), 2001 FCA 198, paras. 16 to 21

remuneration defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440

Amount receivable for covenant

(3.1)

If an amount (other than an amount to which paragraph (1)(a) applies because of subsection (11)) is receivable at the end of a taxation year by a taxpayer in respect of a covenant, agreed to by the taxpayer more than 36 months before the end of that taxation year, with reference to what the taxpayer is, or is not, to do, and the amount would be included in the taxpayer’s income for the year under this Subdivision if it were received by the taxpayer in the year, the amount

(a)

is deemed to be received by the taxpayer at the end of the taxation year for services rendered as an officer or during the period of employment; and

(b)

is deemed not to be received at any other time.

Terms used in subsection (3.1) 6

taxpayer defined in the Act subsection 248(1)

taxation year; the year Act and Interpretation Act subsection 249(1)

office; officer defined in the Act subsection 248(1)

employment; employee Act and Interpretation Act subsection 248(1)

amount defined in the Act subsection 248(1)

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

Group term life insurance

(4)

Where at any time in a taxation year a taxpayer’s life is insured under a group term life insurance policy, there shall be included in computing the taxpayer’s income for the year from an office or employment the amount, if any, prescribed for the year in respect of the insurance.

Terms used in subsection (4) 8

taxpayer defined in the Act subsection 248(1)

taxation year; the year Act and Interpretation Act subsection 249(1)

office; officer defined in the Act subsection 248(1)

employment; employee Act and Interpretation Act subsection 248(1)

amount defined in the Act subsection 248(1)

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

group term life insurance policy Act and Regulations subsection 248(1)

prescribed Act and Regulations subsection 248(1)

(5)

[Repealed, 1995, c. 3, s. 1]

Employment at special work site or remote location

(6)

Notwithstanding subsection 6(1), in computing the income of a taxpayer for a taxation year from an office or employment, there shall not be included any amount received or enjoyed by the taxpayer in respect of, in the course or by virtue of the office or employment that is the value of, or an allowance (not in excess of a reasonable amount) in respect of expenses the taxpayer has incurred for,

(a)

the taxpayer’s board and lodging for a period at

(i)

a special work site, being a location at which the duties performed by the taxpayer were of a temporary nature, if the taxpayer maintained at another location a self-contained domestic establishment as the taxpayer’s principal place of residence

(A)

that was, throughout the period, available for the taxpayer’s occupancy and not rented by the taxpayer to any other person, and

(B)

to which, by reason of distance, the taxpayer could not reasonably be expected to have returned daily from the special work site, or

(ii)

a location at which, by virtue of its remoteness from any established community, the taxpayer could not reasonably be expected to establish and maintain a self-contained domestic establishment,

if the period during which the taxpayer was required by the taxpayer’s duties to be away from the taxpayer’s principal place of residence, or to be at the special work site or location, was not less than 36 hours; or

(b)

transportation between

(i)

the principal place of residence and the special work site referred to in subparagraph 6(6)(a)(i), or

(ii)

the location referred to in subparagraph 6(6)(a)(ii) and a location in Canada or a location in the country in which the taxpayer is employed,

in respect of a period described in paragraph 6(6)(a) during which the taxpayer received board and lodging, or a reasonable allowance in respect of board and lodging, from the taxpayer’s employer.

Terms used in subsection (6) 15

taxpayer defined in the Act subsection 248(1)

taxation year; the year Act and Interpretation Act subsection 249(1)

office; officer defined in the Act subsection 248(1)

employment; employee Act and Interpretation Act subsection 248(1)

amount defined in the Act subsection 248(1)

value; fair market value defined by the courts Schroter v. Canada, 2010 FCA 98, paras. 44 to 48

received or enjoyed defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 441

person Act and Interpretation Act subsection 248(1)

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

employer defined in the Act subsection 248(1); subsection 6(17)

reasonable defined by the courts Ville de Beauport v. Canada (Minister of National Revenue), 2001 FCA 198, paras. 16 to 21

Canada Act, Interpretation Act and Income Tax Conventions Interpretation Act section 255

self-contained domestic establishment defined in the Act subsection 248(1)

“A dwelling-house, apartment or other similar place of residence in which place a person as a general rule sleeps and eats.” “Maintained” means kept available, not paid for (Spannier v. The Queen, 2013 TCC 40, paras. 35 to 43). The undefined “domestic establishment” in subparagraph 6(1)(b)(ix) is a different expression. None of the three further statutes adds anything.

special work site defined in the Act subparagraph 6(6)(a)(i)

Subparagraph 6(6)(a)(i) defines the term in place: “a special work site, being a location at which the duties performed by the taxpayer were of a temporary nature”. The exclusion for board, lodging and transportation at such a site also requires that the taxpayer maintained elsewhere a self-contained domestic establishment as principal place of residence, available throughout and not rented to others, to which the taxpayer could not by reason of distance be expected to return daily, and an absence of at least 36 hours. “Temporary nature” describes the duties at the location and “contemplates something like a defined project” (Gessner v. The King, 2023 TCC 87, paras. 25 to 31). A special work site is not any place of work: the words, “chantier particulier” in French, were chosen to restrict the exemption, and an employer’s head office is not one (Bourget v. The Queen, 2009 TCC 533, paras. 19 to 22, adopting Guilbert v. M.N.R., [1991] T.C.J. No. 127). The words date from the 1971 reform, where subsection 6(7) defined a “special work site” as a site at which the duties were of a temporary nature, or whose location was such that the taxpayer could not reasonably be expected to establish and maintain a self-contained domestic establishment (S.C. 1970-71-72, c. 63, s. 1, at 1320 to 1321); S.C. 1977-78, c. 32, s. 1 moved the temporary-duties test into subparagraph 6(6)(a)(i) for 1978 and later years, and S.C. 1985, c. 45, s. 2(2) enacted the present wording, with the principal-residence conditions, for 1985 and later years. None of the three further statutes adds anything.

Cost of property or service

(7)

To the extent that the cost to a person of purchasing a property or service or an amount payable by a person for the purpose of leasing property is taken into account in determining an amount required under this section to be included in computing a taxpayer’s income for a taxation year, that cost or amount payable, as the case may be, shall include any tax that was payable by the person in respect of the property or service or that would have been so payable if the person were not exempt from the payment of that tax because of the nature of the person or the use to which the property or service is to be put.

Terms used in subsection (7) 7

taxpayer defined in the Act subsection 248(1)

taxation year; the year Act and Interpretation Act subsection 249(1)

amount defined in the Act subsection 248(1)

person Act and Interpretation Act subsection 248(1)

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

property defined in the Act subsection 248(1)

goods and services tax defined in the Act subsection 248(1)

“The tax payable under Part IX of the Excise Tax Act.” Subsection 6(8) includes a GST rebate relating to deducted employment expenses, and subsection 6(7) includes sales taxes in any cost used to value a benefit. None of the three further statutes adds anything.

GST rebates re costs of property or service

(8)

(a)

an amount in respect of an outlay or expense is deducted under section 8 in computing the income of a taxpayer for a taxation year from an office or employment, or

(b)

an amount is included in the capital cost to a taxpayer of a property described in subparagraph 8(1)(j)(ii) or 8(1)(p)(ii),

and a particular amount is paid to the taxpayer in a particular taxation year as a rebate under the Excise Tax Act in respect of any goods and services tax included in the amount of the outlay or expense, or the capital cost of the property, as the case may be, the particular amount

(c)

to the extent that it relates to an outlay or expense referred to in paragraph (a), shall be included in computing the taxpayer’s income from an office or employment for the particular taxation year, and

(d)

to the extent that it relates to the capital cost of property referred to in paragraph (b), is deemed, for the purposes of subsection 13(7.1), to have been received by the taxpayer in the particular taxation year as assistance from a government for the acquisition of the property.

Terms used in subsection (8) 8

taxpayer defined in the Act subsection 248(1)

taxation year; the year Act and Interpretation Act subsection 249(1)

office; officer defined in the Act subsection 248(1)

employment; employee Act and Interpretation Act subsection 248(1)

amount defined in the Act subsection 248(1)

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

property defined in the Act subsection 248(1)

goods and services tax defined in the Act subsection 248(1)

Amount in respect of interest on employee debt

(9)

Where an amount in respect of a loan or debt is deemed by subsection 80.4(1) to be a benefit received in a taxation year by an individual, the amount of the benefit shall be included in computing the income of the individual for the year as income from an office or employment.

Terms used in subsection (9) 7

taxation year; the year Act and Interpretation Act subsection 249(1)

office; officer defined in the Act subsection 248(1)

employment; employee Act and Interpretation Act subsection 248(1)

amount defined in the Act subsection 248(1)

benefit defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

individual defined in the Act subsection 248(1)

Contributions to an employee benefit plan

(10)

For the purposes of subparagraph 6(1)(g)(ii),

(a)

an amount included in the income of an individual in respect of an employee benefit plan for a taxation year preceding the year in which it was paid out of the plan shall be deemed to be an amount contributed to the plan by the individual; and

(b)

where an amount is received in a taxation year by an individual from an employee benefit plan that was in a preceding year an employee trust, such portion of the amount so received by the individual as does not exceed the amount, if any, by which the lesser of

(i)

the amount, if any, by which

(A)

the total of all amounts allocated to the individual or a deceased person of whom the individual is an heir or legal representative by the trustee of the plan at a time when it was an employee trust

exceeds

(B)

the total of all amounts previously paid out of the plan to or for the benefit of the individual or the deceased person at a time when the plan was an employee trust, and

(ii)

the portion of the amount, if any, by which the cost amount to the plan of its property immediately before it ceased to be an employee trust exceeds its liabilities at that time that

(A)

the amount determined under subparagraph 6(10)(b)(i) in respect of the individual

is of

(B)

the total of amounts determined under subparagraph 6(10)(b)(i) in respect of all individuals who were beneficiaries under the plan immediately before it ceased to be an employee trust

exceeds

(iii)

the total of all amounts previously received out of the plan by the individual or a deceased person of whom the individual is an heir or legal representative at a time when the plan was an employee benefit plan to the extent that the amounts were deemed by this paragraph to be a return of amounts contributed to the plan

shall be deemed to be the return of an amount contributed to the plan by the individual.

Terms used in subsection (10) 13

taxation year; the year Act and Interpretation Act subsection 249(1)

employment; employee Act and Interpretation Act subsection 248(1)

amount defined in the Act subsection 248(1)

benefit defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

person Act and Interpretation Act subsection 248(1)

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

employee benefit plan defined in the Act subsection 248(1)

employee trust defined in the Act subsection 248(1)

individual defined in the Act subsection 248(1)

property defined in the Act subsection 248(1)

trust; trustee defined in the Act subsection 248(1); subsection 104(1)

legal representative defined in the Act subsection 248(1)

cost amount defined in the Act subsection 248(1)

Defined by type of property, for example adjusted cost base for capital property and the amount receivable for a right to receive an amount. Subparagraph 6(10)(b)(ii) uses the cost amount of a former employee trust’s property, net of liabilities, to measure the return of contributions. None of the three further statutes adds anything.

Salary deferral arrangement

(11)

Where at the end of a taxation year any person has a right under a salary deferral arrangement in respect of a taxpayer to receive a deferred amount, an amount equal to the deferred amount shall be deemed, for the purposes only of paragraph 6(1)(a), to have been received by the taxpayer as a benefit in the year, to the extent that the amount was not otherwise included in computing the taxpayer’s income for the year or any preceding taxation year.

Terms used in subsection (11) 8

taxpayer defined in the Act subsection 248(1)

taxation year; the year Act and Interpretation Act subsection 249(1)

amount defined in the Act subsection 248(1)

benefit defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

person Act and Interpretation Act subsection 248(1)

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

salary deferral arrangement defined in the Act subsection 248(1)

deferred amount defined in the Act subsection 248(1)

Idem

(12)

Where at the end of a taxation year any person has a right under a salary deferral arrangement (other than a trust governed by a salary deferral arrangement) in respect of a taxpayer to receive a deferred amount, an amount equal to any interest or other additional amount that accrued to, or for the benefit of, that person to the end of the year in respect of the deferred amount shall be deemed at the end of the year, for the purposes only of subsection 6(11), to be a deferred amount that the person has a right to receive under the arrangement.

Terms used in subsection (12) 9

taxpayer defined in the Act subsection 248(1)

taxation year; the year Act and Interpretation Act subsection 249(1)

amount defined in the Act subsection 248(1)

benefit defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

person Act and Interpretation Act subsection 248(1)

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

salary deferral arrangement defined in the Act subsection 248(1)

trust; trustee defined in the Act subsection 248(1); subsection 104(1)

deferred amount defined in the Act subsection 248(1)

Application

(13)

Subsection 6(11) does not apply in respect of a deferred amount under a salary deferral arrangement in respect of a taxpayer that was established primarily for the benefit of one or more non-resident employees in respect of services to be rendered in a country other than Canada, to the extent that the deferred amount

(a)

was in respect of services rendered by an employee who

(i)

was not resident in Canada at the time the services were rendered, or

(ii)

was resident in Canada for a period (in this subsection referred to as an “excluded period”) of not more than 36 of the 72 months preceding the time the services were rendered and was an employee to whom the arrangement applied before the employee became resident in Canada; and

(b)

cannot reasonably be regarded as being in respect of services rendered or to be rendered during a period (other than an excluded period) when the employee was resident in Canada.

Terms used in subsection (13) 11

excluded period defined in the Act subsection 6(13)

In subsection 6(13), an “excluded period” is a period of residence in Canada of not more than 36 of the 72 months preceding the time the services were rendered, by an employee to whom the arrangement applied before the employee became resident. Deferred amounts for services rendered while non-resident, or during an excluded period, under a salary deferral arrangement established primarily for non-resident employees serving outside Canada escape the annual inclusion in subsection 6(11). Enacted with the salary deferral rules by S.C. 1986, c. 55, s. 1.

taxpayer defined in the Act subsection 248(1)

employment; employee Act and Interpretation Act subsection 248(1)

amount defined in the Act subsection 248(1)

benefit defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

salary deferral arrangement defined in the Act subsection 248(1)

reasonable defined by the courts Ville de Beauport v. Canada (Minister of National Revenue), 2001 FCA 198, paras. 16 to 21

Canada Act, Interpretation Act and Income Tax Conventions Interpretation Act section 255

resident in Canada; non-resident Act and Income Tax Conventions Interpretation Act subsection 250(1); subsection 248(1)

deferred amount defined in the Act subsection 248(1)

Part of plan or arrangement

(14)

Where deferred amounts under a salary deferral arrangement in respect of a taxpayer (in this subsection referred to as “that arrangement”) are required to be included as benefits under paragraph 6(1)(a) in computing the taxpayer’s income and that arrangement is part of a plan or arrangement (in this subsection referred to as the “plan”) under which amounts or benefits not related to the deferred amounts are payable or provided, for the purposes of this Act, other than this subsection,

(a)

that arrangement shall be deemed to be a separate arrangement independent of other parts of the plan of which it is a part; and

(b)

where any person has a right to a deferred amount under that arrangement, an amount received by the person as a benefit at any time out of or under the plan shall be deemed to have been received out of or under that arrangement except to the extent that it exceeds the amount, if any, by which

(i)

the total of all deferred amounts under that arrangement that were included under paragraph 6(1)(a) as benefits in computing the taxpayer’s income for taxation years ending before that time

exceeds

(ii)

the total of

(A)

all deferred amounts received by any person before that time out of or under the plan that were deemed by this paragraph to have been received out of or under that arrangement, and

(B)

all deferred amounts under that arrangement that were deducted under paragraph 8(1)(o) in computing the taxpayer’s income for the year or preceding taxation years.

Terms used in subsection (14) 8

taxpayer defined in the Act subsection 248(1)

taxation year; the year Act and Interpretation Act subsection 249(1)

amount defined in the Act subsection 248(1)

benefit defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

person Act and Interpretation Act subsection 248(1)

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

salary deferral arrangement defined in the Act subsection 248(1)

deferred amount defined in the Act subsection 248(1)

Forgiveness of employee debt

(15)

For the purpose of paragraph 6(1)(a),

(a)

a benefit shall be deemed to have been enjoyed by a taxpayer at any time an obligation issued by any debtor (including the taxpayer) is settled or extinguished; and

(b)

the value of that benefit shall be deemed to be the forgiven amount at that time in respect of the obligation.

Terms used in subsection (15) 6

taxpayer defined in the Act subsection 248(1)

amount defined in the Act subsection 248(1)

value; fair market value defined by the courts Schroter v. Canada, 2010 FCA 98, paras. 44 to 48

benefit defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

forgiven amount defined in the Act subsection 6(15.1); subsection 80(1)

For subsection 6(15), the forgiven amount in respect of an obligation “has the meaning that would be assigned by subsection 80(1)” if (a) the obligation were a commercial obligation, (b) no amount included in income because of the settlement were taken into account, (c) paragraphs (f) and (h) of the description of B in the subsection 80(1) definition were ignored, and (d) paragraphs 80(2)(b) and (q) were ignored (subsection 6(15.1)). In substance it is the amount owing less what was paid in satisfaction. Subsection 6(15.1) sets an assumption for the computation, not a condition that the debt be a commercial obligation (Rémillard v. The Queen, 2011 TCC 327, paras. 50 to 55). Replaced by S.C. 1995, c. 21, s. 1, for taxation years ending after 21 February 1994; the French text was replaced by S.C. 2013, c. 34, s. 170. None of the three further statutes adds anything.

Forgiven amount

(15.1)

For the purpose of subsection 6(15), the forgiven amount at any time in respect of an obligation issued by a debtor has the meaning that would be assigned by subsection 80(1) if

(a)

the obligation were a commercial obligation (within the meaning assigned by subsection 80(1)) issued by the debtor;

(b)

no amount included in computing income because of the obligation being settled or extinguished at that time were taken into account;

(c)

the definition forgiven amount in subsection 80(1) were read without reference to paragraphs (f) and (h) of the description of B in that definition; and

(d)

section 80 were read without reference to paragraphs (2)(b) and (q) of that section.

Terms used in subsection (15.1) 4

amount defined in the Act subsection 248(1)

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

forgiven amount defined in the Act subsection 6(15.1); subsection 80(1)

commercial obligation defined in the Act subsection 80(1)

“(a) a commercial debt obligation issued by the debtor, or (b) a distress preferred share issued by the debtor”; a commercial debt obligation generally requires interest paid or payable under a legal obligation. Paragraph 6(15.1)(a) assumes the employee’s obligation is one, so the formula works for interest-free loans. None of the three further statutes adds anything.

Disability-related employment benefits

(16)

Notwithstanding subsection 6(1), in computing an individual’s income for a taxation year from an office or employment, there shall not be included any amount received or enjoyed by the individual in respect of, in the course of or because of the individual’s office or employment that is the value of a benefit relating to, or an allowance (not in excess of a reasonable amount) in respect of expenses incurred by the individual for,

(a)

the transportation of the individual between the individual’s ordinary place of residence and the individual’s work location (including parking near that location) if the individual is blind or is a person in respect of whom an amount is deductible, or would but for paragraph 118.3(1)(c) be deductible, because of the individual’s mobility impairment, under section 118.3 in computing a taxpayer’s tax payable under this Part for the year; or

(b)

an attendant to assist the individual in the performance of the individual’s duties if the individual is a person in respect of whom an amount is deductible, or would but for paragraph 118.3(1)(c) be deductible, under section 118.3 in computing a taxpayer’s tax payable under this Part for the year.

Terms used in subsection (16) 13

taxpayer defined in the Act subsection 248(1)

taxation year; the year Act and Interpretation Act subsection 249(1)

office; officer defined in the Act subsection 248(1)

employment; employee Act and Interpretation Act subsection 248(1)

amount defined in the Act subsection 248(1)

value; fair market value defined by the courts Schroter v. Canada, 2010 FCA 98, paras. 44 to 48

benefit defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

received or enjoyed defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 441

person Act and Interpretation Act subsection 248(1)

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

individual defined in the Act subsection 248(1)

reasonable defined by the courts Ville de Beauport v. Canada (Minister of National Revenue), 2001 FCA 198, paras. 16 to 21

Definitions

(17)

The definitions in this subsection apply in this subsection and subsection 6(18).

disability policy means a group disability insurance policy that provides for periodic payments to individuals in respect of the loss of remuneration from an office or employment. (police d’assurance-invalidité)

Annotation on disability policy

Subsection 6(17) defines a disability policy as “a group disability insurance policy that provides for periodic payments to individuals in respect of the loss of remuneration from an office or employment”. The definition applies only in subsections 6(17) and 6(18), and serves the insolvent-insurer rule: a top-up disability payment must be made because of the insolvency of an insurer obligated under a disability policy. A replacement policy is deemed to be the same policy as, and a continuation of, the one it replaced (closing words of the definition “top-up disability payment”). The definition was enacted by S.C. 1998, c. 19, s. 68, applicable to payments made after 10 August 1994.

employer of an individual includes a former employer of the individual. (employeur)

Annotation on employer

In subsections 6(17) and 6(18), “employer of an individual includes a former employer of the individual”. The extension ensures that a top-up payment by an employer whose relationship with a disabled former employee has ended still falls within subsection 6(18). Elsewhere in the section the word has its ordinary or subsection 248(1) meaning, or, in paragraph 6(1)(e) and subsection 6(2), means whoever makes the automobile available. Enacted by S.C. 1998, c. 19, s. 68.

top-up disability payment in respect of an individual means a payment made by an employer of the individual as a consequence of the insolvency of an insurer that was obligated to make payments to the individual under a disability policy where

(a)

the payment is made to an insurer so that periodic payments made to the individual under the policy will not be reduced because of the insolvency, or will be reduced by a lesser amount, or

(b)

the following conditions are satisfied:

(i)

the payment is made to the individual to replace, in whole or in part, periodic payments that would have been made under the policy to the individual but for the insolvency, and

(ii)

the payment is made under an arrangement by which the individual is required to reimburse the payment to the extent that the individual subsequently receives an amount from an insurer in respect of the portion of the periodic payments that the payment was intended to replace.

For the purposes of paragraphs (a) and (b), an insurance policy that replaces a disability policy is deemed to be the same policy as, and a continuation of, the disability policy that was replaced. (paiement compensatoire pour invalidité)

Annotation on top-up disability payment

A top-up disability payment in respect of an individual “means a payment made by an employer of the individual as a consequence of the insolvency of an insurer that was obligated to make payments to the individual under a disability policy” where either (a) the payment is made to an insurer so that the individual’s periodic payments will not be reduced, or will be reduced by less, or (b) the payment is made to the individual to replace periodic payments lost to the insolvency, under an arrangement requiring the individual to reimburse it to the extent the individual later recovers from an insurer. Subsection 6(18) deems such a payment not to be a benefit for paragraph 6(1)(a) and not to be an employer contribution for paragraph 6(1)(f), and, where it is paid to the individual, to be an amount payable under the plan, so that the employee’s own contributions continue to offset the inclusion. Enacted by S.C. 1998, c. 19, s. 68, for payments after 10 August 1994.

Terms used in subsection (17) 11

office; officer defined in the Act subsection 248(1)

employment; employee Act and Interpretation Act subsection 248(1)

amount defined in the Act subsection 248(1)

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

employer defined in the Act subsection 248(1); subsection 6(17)

individual defined in the Act subsection 248(1)

remuneration defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440

disability policy defined in the Act subsection 6(17)

Defined in subsection 6(17); see Definitions. Section 19 of the Income Tax Application Rules may matter for very old plans; the other two statutes add nothing.

insurer defined in the Act subsection 248(1)

“Insurer has the meaning assigned by this subsection to the expression insurance corporation”, a corporation that carries on an insurance business. The top-up rules apply where such an insurer becomes insolvent. None of the three further statutes adds anything.

insurance policy defined in the Act subsection 248(1)

“Insurance policy includes a life insurance policy.” A replacement policy is deemed a continuation of the disability policy it replaced. None of the three further statutes adds anything.

top-up disability payment defined in the Act subsection 6(17)

Defined in subsection 6(17); see Definitions. None of the three further statutes adds anything.

Group disability benefits — insolvent insurer

(18)

Where an employer of an individual makes a top-up disability payment in respect of the individual,

(a)

the payment is, for the purpose of paragraph 6(1)(a), deemed not to be a benefit received or enjoyed by the individual;

(b)

the payment is, for the purpose of paragraph 6(1)(f), deemed not to be a contribution made by the employer to or under the disability insurance plan of which the disability policy in respect of which the payment is made is or was a part; and

(c)

if the payment is made to the individual, it is, for the purpose of paragraph 6(1)(f), deemed to be an amount payable to the individual pursuant to the plan.

Terms used in subsection (18) 8

amount defined in the Act subsection 248(1)

benefit defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

received or enjoyed defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 441

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

employer defined in the Act subsection 248(1); subsection 6(17)

individual defined in the Act subsection 248(1)

disability policy defined in the Act subsection 6(17)

Defined in subsection 6(17); see Definitions. Section 19 of the Income Tax Application Rules may matter for very old plans; the other two statutes add nothing.

top-up disability payment defined in the Act subsection 6(17)

Defined in subsection 6(17); see Definitions. None of the three further statutes adds anything.

Benefit re housing loss

(19)

For the purpose of paragraph (1)(a), an amount paid at any time in respect of a housing loss (other than an eligible housing loss) to or on behalf of a taxpayer or a person who does not deal at arm’s length with the taxpayer in respect of, in the course of or because of, an office or employment is deemed to be a benefit received by the taxpayer at that time because of the office or employment.

Terms used in subsection (19) 10

taxpayer defined in the Act subsection 248(1)

office; officer defined in the Act subsection 248(1)

employment; employee Act and Interpretation Act subsection 248(1)

amount defined in the Act subsection 248(1)

benefit defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

person Act and Interpretation Act subsection 248(1)

arm’s length defined in the Act subsection 251(1)

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

housing loss defined in the Act subsection 6(21)

“In this section, housing loss at any time in respect of a residence of a taxpayer means the amount, if any, by which the greater of” (a) the adjusted cost base of the residence at that time to the taxpayer or a non-arm’s-length person and (b) its highest fair market value within the six-month period ending at that time, exceeds (c) the lesser of the proceeds of disposition and the fair market value at that time, if the residence is disposed of before the end of the first taxation year beginning after that time, or (d) in any other case, its fair market value at that time (subsection 6(21)). The measure is therefore the fall from the higher of cost and recent peak value, not the accounting loss on sale. A housing loss that is not an eligible housing loss is a benefit in full when reimbursed (subsection 6(19)). Enacted by S.C. 1999, c. 22, s. 2, applicable after 23 February 1998, with a deferred start (2001) for relocations to employment that began before October 1998. None of the three further statutes adds anything.

eligible housing loss defined in the Act subsection 6(22)

“In this section, eligible housing loss in respect of a residence designated by a taxpayer means a housing loss in respect of an eligible relocation of the taxpayer or a person who does not deal at arm’s length with the taxpayer and, for these purposes, no more than one residence may be so designated in respect of an eligible relocation” (subsection 6(22)). The “eligible relocation” is defined in subsection 248(1) and requires, among other things, that the new residence be at least 40 kilometres closer to the new work location. Under subsection 6(20), reimbursement of an eligible housing loss is a benefit only to the extent of one-half of the cumulative amount paid over $15,000, less amounts already included. Enacted by S.C. 1999, c. 22, s. 2. None of the three further statutes adds anything.

Benefit re eligible housing loss

(20)

For the purpose of paragraph (1)(a), an amount paid at any time in a taxation year in respect of an eligible housing loss to or on behalf of a taxpayer or a person who does not deal at arm’s length with the taxpayer in respect of, in the course of or because of, an office or employment is deemed to be a benefit received by the taxpayer at that time because of the office or employment to the extent of the amount, if any, by which

(a)

one half of the amount, if any, by which the total of all amounts each of which is so paid in the year or in a preceding taxation year exceeds $15,000

exceeds

(b)

the total of all amounts each of which is an amount included in computing the taxpayer’s income because of this subsection for a preceding taxation year in respect of the loss.

Terms used in subsection (20) 11

taxpayer defined in the Act subsection 248(1)

taxation year; the year Act and Interpretation Act subsection 249(1)

office; officer defined in the Act subsection 248(1)

employment; employee Act and Interpretation Act subsection 248(1)

amount defined in the Act subsection 248(1)

benefit defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

person Act and Interpretation Act subsection 248(1)

arm’s length defined in the Act subsection 251(1)

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

housing loss defined in the Act subsection 6(21)

eligible housing loss defined in the Act subsection 6(22)

Housing loss

(21)

In this section, housing loss at any time in respect of a residence of a taxpayer means the amount, if any, by which the greater of

(a)

the adjusted cost base of the residence at that time to the taxpayer or to another person who does not deal at arm’s length with the taxpayer, and

(b)

the highest fair market value of the residence within the six-month period that ends at that time exceeds

(c)

if the residence is disposed of by the taxpayer or the other person before the end of the first taxation year that begins after that time, the lesser of

(i)

the proceeds of disposition of the residence, and

(ii)

the fair market value of the residence at that time, and

(d)

in any other case, the fair market value of the residence at that time.

Terms used in subsection (21) 11

taxpayer defined in the Act subsection 248(1)

taxation year; the year Act and Interpretation Act subsection 249(1)

amount defined in the Act subsection 248(1)

value; fair market value defined by the courts Schroter v. Canada, 2010 FCA 98, paras. 44 to 48

person Act and Interpretation Act subsection 248(1)

arm’s length defined in the Act subsection 251(1)

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

disposition defined in the Act subsection 248(1)

housing loss defined in the Act subsection 6(21)

adjusted cost base defined in the Act section 54

For non-depreciable property, “the cost to the taxpayer of the property adjusted, as of that time, in accordance with section 53”, never less than nil. Paragraph 6(21)(a) uses the residence’s adjusted cost base as one of the two upper figures in the housing loss. None of the three further statutes adds anything.

proceeds of disposition defined in the Act section 54

“Includes, (a) the sale price of property that has been sold”, with compensation for property taken or damaged and insurance proceeds. On a timely disposition, the lesser of proceeds and fair market value is the lower figure in the housing-loss formula (paragraph 6(21)(c)). None of the three further statutes adds anything.

Eligible housing loss

(22)

In this section, eligible housing loss in respect of a residence designated by a taxpayer means a housing loss in respect of an eligible relocation of the taxpayer or a person who does not deal at arm’s length with the taxpayer and, for these purposes, no more than one residence may be so designated in respect of an eligible relocation.

Terms used in subsection (22) 7

taxpayer defined in the Act subsection 248(1)

person Act and Interpretation Act subsection 248(1)

arm’s length defined in the Act subsection 251(1)

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

housing loss defined in the Act subsection 6(21)

eligible housing loss defined in the Act subsection 6(22)

eligible relocation defined in the Act subsection 248(1)

A relocation that enables the taxpayer to be employed or carry on business at a new work location (or to study full-time), between residences in Canada (subject to an exception for persons absent from but resident in Canada), where “the distance between the old residence and the new work location is not less than 40 kilometres greater than the distance between the new residence and the new work location”. Only a loss on such a relocation qualifies for the half-inclusion (Thomas v. Canada, 2007 FCA 57). None of the three further statutes adds anything.

Employer-provided housing subsidies

(23)

For greater certainty, an amount paid or the value of assistance provided by any person in respect of, in the course of or because of, an individual’s office or employment in respect of the cost of, the financing of, the use of or the right to use, a residence is, for the purposes of this section, a benefit received by the individual because of the office or employment.

Terms used in subsection (23) 8

office; officer defined in the Act subsection 248(1)

employment; employee Act and Interpretation Act subsection 248(1)

amount defined in the Act subsection 248(1)

value; fair market value defined by the courts Schroter v. Canada, 2010 FCA 98, paras. 44 to 48

benefit defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

person Act and Interpretation Act subsection 248(1)

in respect of; in the course of; by virtue of defined by the courts The Queen v. Savage, [1983] 2 S.C.R. 428, at 440 to 441

individual defined in the Act subsection 248(1)

Source: Justice Laws Website. Not an official version.

Historic text

Immediately preceding version, in force from 2023-06-22 to 2024-06-19:

Show the text in force 2023-06-22 to 2024-06-19

Amounts to be included as income from office or employment

6 (1) There shall be included in computing the income of a taxpayer for a taxation year as income from an office or employment such of the following amounts as are applicable
- Value of benefits
  (a) the value of board, lodging and other benefits of any kind whatever received or enjoyed by the taxpayer, or by a person who does not deal at arm’s length with the taxpayer, in the year in respect of, in the course of, or by virtue of the taxpayer’s office or employment, except any benefit
  - (i) derived from the contributions of the taxpayer’s employer to or under a deferred profit sharing plan, an employee life and health trust, a group sickness or accident insurance plan, a group term life insurance policy, a pooled registered pension plan, a private health services plan, a registered pension plan or a supplementary unemployment benefit plan,
  - (ii) under a retirement compensation arrangement, an employee benefit plan or an employee trust,
  - (iii) that was a benefit in respect of the use of an automobile,
  - (iv) derived from counselling services in respect of
    - (A) the mental or physical health of the taxpayer or an individual related to the taxpayer, other than a benefit attributable to an outlay or expense to which paragraph 18(1)(l) applies, or
    - (B) the re-employment or retirement of the taxpayer,
  - (v) under a salary deferral arrangement, except to the extent that the benefit is included under this paragraph because of subsection (11), or
  - (vi) that is received or enjoyed by an individual other than the taxpayer under a program provided by the taxpayer’s employer that is designed to assist individuals to further their education, if the taxpayer deals with the employer at arm’s length and it is reasonable to conclude that the benefit is not a substitute for salary, wages or other remuneration of the taxpayer;
- Personal or living expenses
  (b) all amounts received by the taxpayer in the year as an allowance for personal or living expenses or as an allowance for any other purpose, except
  - (i) travel, personal or living expense allowances
    - (A) expressly fixed in an Act of Parliament, or
    - (B) paid under the authority of the Treasury Board to a person who was appointed or whose services were engaged pursuant to the Inquiries Act, in respect of the discharge of the person’s duties relating to the appointment or engagement,
  - (ii) travel and separation allowances received under service regulations as a member of the Canadian Forces,
  - (iii) representation or other special allowances received in respect of a period of absence from Canada as a person described in paragraph 250(1)(b), (c), (d) or (d.1),
  - (iv) representation or other special allowances received by a person who is an agent-general of a province in respect of a period while the person was in Ottawa as the agent-general of the province,
  - (v) reasonable allowances for travel expenses received by an employee from the employee’s employer in respect of a period when the employee was employed in connection with the selling of property or negotiating of contracts for the employee’s employer,
  - (v.1) allowances for board and lodging of the taxpayer, to a maximum total of $300 for each month of the year, if
    - (A) the taxpayer is, in that month, a registered participant with, or member of, a sports team or recreation program of the employer in respect of which membership or participation is restricted to persons under 21 years of age,
    - (B) the allowance is in respect of the taxpayer’s participation or membership and is not attributable to services of the taxpayer as a coach, instructor trainer, referee, administrator or other similar occupation,
    - (C) the employer is a registered charity or a non-profit organization described in paragraph 149(1)(l), and
    - (D) the allowance is reasonably attributable to the cost to the taxpayer of living away from the place where the employee would, but for the employment, ordinarily reside,
  - (vi) reasonable allowances received by a minister or clergyman in charge of or ministering to a diocese, parish or congregation for expenses for transportation incident to the discharge of the duties of that office or employment,
  - (vii) reasonable allowances for travel expenses (other than allowances for the use of a motor vehicle) received by an employee (other than an employee employed in connection with the selling of property or the negotiating of contracts for the employer) from the employer for travelling away from
    - (A) the municipality where the employer’s establishment at which the employee ordinarily worked or to which the employee ordinarily reported was located, and
    - (B) the metropolitan area, if there is one, where that establishment was located,
    in the performance of the duties of the employee’s office or employment,
  - (vii.1) reasonable allowances for the use of a motor vehicle received by an employee (other than an employee employed in connection with the selling of property or the negotiating of contracts for the employer) from the employer for travelling in the performance of the duties of the office or employment,
  - (viii) [Repealed, 1999, c. 22, s. 2]
  - (ix) allowances (not in excess of reasonable amounts) received by an employee from the employee’s employer in respect of any child of the employee living away from the employee’s domestic establishment in the place where the employee is required by reason of the employee’s employment to live and in full-time attendance at a school in which the language primarily used for instruction is the official language of Canada primarily used by the employee if
    - (A) a school suitable for that child primarily using that language of instruction is not available in the place where the employee is so required to live, and
    - (B) the school the child attends primarily uses that language for instruction and is not farther from that place than the community nearest to that place in which there is such a school having suitable boarding facilities,
  and, for the purposes of subparagraphs (v), (vi) and (vii.1), an allowance received in a taxation year by a taxpayer for the use of a motor vehicle in connection with or in the course of the taxpayer’s office or employment shall be deemed not to be a reasonable allowance
  - (x) where the measurement of the use of the vehicle for the purpose of the allowance is not based solely on the number of kilometres for which the vehicle is used in connection with or in the course of the office or employment, or
  - (xi) where the taxpayer both receives an allowance in respect of that use and is reimbursed in whole or in part for expenses in respect of that use (except where the reimbursement is in respect of supplementary business insurance or toll or ferry charges and the amount of the allowance was determined without reference to those reimbursed expenses);
- Director’s or other fees
  (c) director’s or other fees received by the taxpayer in the year in respect of, in the course of, or by virtue of an office or employment;
- Allocations, etc., under profit sharing plan
  (d) amounts allocated to the taxpayer in the year by a trustee under an employees profit sharing plan as provided by section 144 except subsection 144(4), and amounts required by subsection 144(7) to be included in computing the taxpayer’s income for the year;
- Standby charge for automobile
  (e) if at any time in the year an automobile is made available to the taxpayer, or to a particular person who does not deal at arm’s length with the taxpayer, by another person (referred to in this paragraph as “the employer”) because of or as a consequence of a previous, the current or an intended office or employment of the taxpayer, the amount, if any, by which
  - (i) an amount that is a reasonable standby charge for the automobile for the total number of days in the year during which it was made so available
  exceeds
  - (ii) the total of all amounts, each of which is an amount (other than an expense related to the operation of the automobile) paid in the year by the taxpayer, or the particular person who does not deal at arm’s length with the taxpayer, to the employer for the use of the automobile;
- Group sickness or accident insurance plans
  (e.1) the total of all amounts contributed in the year in respect of the taxpayer by the taxpayer’s employer to a group sickness or accident insurance plan, except to the extent that the contributions are attributable to benefits under the plan that, if received by the taxpayer, would be included in the taxpayer’s income under paragraph (f) in the year the benefits are received if that paragraph were read without regard to its subparagraph (v);
- Employment insurance benefits
  (f) the total of all amounts received by the taxpayer in the year that were payable to the taxpayer on a periodic basis in respect of the loss of all or any part of the taxpayer’s income from an office or employment, pursuant to
  - (i) a sickness or accident insurance plan,
  - (ii) a disability insurance plan,
  - (iii) an income maintenance insurance plan, or
  - (iii.1) a plan described in any of subparagraphs (i) to (iii) that is administered or provided by an employee life and health trust,
  to or under which the taxpayer’s employer has made a contribution, not exceeding the amount, if any, by which
  - (iv) the total of all such amounts received by the taxpayer pursuant to the plan before the end of the year and
    - (A) where there was a preceding taxation year ending after 1971 in which any such amount was, by virtue of this paragraph, included in computing the taxpayer’s income, after the last such year, and
    - (B) in any other case, after 1971,
  exceeds
  - (v) the total of the contributions made by the taxpayer under the plan before the end of the year and
    - (A) where there was a preceding taxation year described in clause (iv)(A), after the last such year, and
    - (B) in any other case, after 1967;
- Canadian Forces members and veterans amounts
  (f.1) the total of all amounts received by the taxpayer in the year on account of
  - (i) an earnings loss benefit, an income replacement benefit (other than an amount determined under subsection 19.1(1), paragraph 23(1)(b) or subsection 26.1(1) of the Veterans Well-being Act, as modified, where applicable, under Part 5 of that Act), a supplementary retirement benefit or a career impact allowance payable to the taxpayer under Part 2 of the Veterans Well-being Act, or
  - (ii) an amount payable under any of subsections 99(6), 109(1) and 115(5) and sections 124 to 126 of the Veterans Well-being Act;
- Employee benefit plan benefits
  (g) the total of all amounts each of which is an amount received by the taxpayer in the year out of or under an employee benefit plan or from the disposition of any interest in any such plan, other than the portion thereof that is
  - (i) a death benefit or an amount that would, but for the deduction provided in the definition of that term in subsection 248(1), be a death benefit,
  - (ii) a return of amounts contributed to the plan by the taxpayer or a deceased employee of whom the taxpayer is an heir or legal representative, to the extent that the amounts were not deducted in computing the taxable income of the taxpayer or the deceased employee for any taxation year,
  - (iii) a superannuation or pension benefit attributable to services rendered by a person in a period throughout which the person was not resident in Canada, or
  - (iv) a designated employee benefit (as defined in subsection 144.1(1));
- Employee trust
  (h) amounts allocated to the taxpayer for the year by a trustee under an employee trust;
- Salary deferral arrangement payments
  (i) the amount, if any, by which the total of all amounts received by any person as benefits (other than amounts received by or from a trust governed by a salary deferral arrangement) in the year out of or under a salary deferral arrangement in respect of the taxpayer exceeds the amount, if any, by which
  - (i) the total of all deferred amounts under the arrangement that were included under paragraph 6(1)(a) as benefits in computing the taxpayer’s income for preceding taxation years
  exceeds
  - (ii) the total of
    - (A) all deferred amounts received by any person in preceding taxation years out of or under the arrangement, and
    - (B) all deferred amounts under the arrangement that were deducted under paragraph 8(1)(o) in computing the taxpayer’s income for the year or preceding taxation years;
- Reimbursements and awards
  (j) amounts received by the taxpayer in the year as an award or reimbursement in respect of an amount that would, if the taxpayer were entitled to no reimbursements or awards, be deductible under subsection 8(1) in computing the income of the taxpayer, except to the extent that the amounts so received
  - (i) are otherwise included in computing the income of the taxpayer for the year, or
  - (ii) are taken into account in computing the amount that is claimed under subsection 8(1) by the taxpayer for the year or a preceding taxation year;
- Automobile operating expense benefit
  (k) where
  - (i) an amount is determined under subparagraph 6(1)(e)(i) in respect of an automobile in computing the taxpayer’s income for the year,
  - (ii) amounts related to the operation (otherwise than in connection with or in the course of the taxpayer’s office or employment) of the automobile for the period or periods in the year during which the automobile was made available to the taxpayer, or a person who does not deal at arm’s length with the taxpayer, are paid or payable by the employer within the meaning of paragraph (e) that made the automobile available (in this paragraph referred to as the “payor”), and
  - (iii) the total of the amounts so paid or payable is not paid in the year or within 45 days after the end of the year to the payor by the taxpayer or by the person related to the taxpayer,
  the amount in respect of the operation of the automobile determined by the formula
  A - B
  where
  Ais
  - (iv) where the automobile is used primarily in the performance of the duties of the taxpayer’s office or employment during the period or periods referred to in subparagraph (ii) and the taxpayer notifies the employer in writing before the end of the year of the taxpayer’s intention to have this subparagraph apply, 1/2 of the amount determined under subparagraph 6(1)(e)(i) in respect of the automobile in computing the taxpayer’s income for the year, and
  - (v) in any other case, the amount equal to the product obtained when the amount prescribed for the year is multiplied by the total number of kilometres that the automobile is driven (otherwise than in connection with or in the course of the taxpayer’s office or employment) during the period or periods referred to in subparagraph 6(1)(k)(ii), and
  Bis the total of all amounts in respect of the operation of the automobile in the year paid in the year or within 45 days after the end of the year to the payor by the taxpayer or by the person related to the taxpayer; and
- Where standby charge does not apply
  (l) the value of a benefit in respect of the operation of an automobile (other than a benefit to which paragraph (k) applies or would apply but for subparagraph (k)(iii)) received or enjoyed by the taxpayer, or by a person related to the taxpayer, in the year in respect of, in the course of or because of, the taxpayer’s office or employment.
Parking cost
(1.1) For the purposes of this section, an amount or a benefit in respect of the use of a motor vehicle by a taxpayer does not include any amount or benefit related to the parking of the vehicle.
Deeming rule — amount received
(1.2) For the purposes of paragraph (1)(g), an amount received by an individual out of or under an employee benefit plan is deemed to have been received by a taxpayer and not by the individual if
- (a) the individual does not deal at arm’s length with the taxpayer;
- (b) the amount is received in respect of an office or employment of the taxpayer; and
- (c) the taxpayer is living at the time the amount is received by the individual.
Reasonable standby charge
(2) For the purposes of paragraph (1)(e), a reasonable standby charge for an automobile for the total number of days (in this subsection referred to as the “total available days”) in a taxation year during which the automobile is made available to a taxpayer, or to a person who does not deal at arm’s length with the taxpayer, by a person (referred to in this subsection as the “employer”) shall be deemed to be the amount determined by the formula
A/B × [2% × (C × D) + 2/3 × (E - F)]
where
Ais
- (a) the lesser of the total kilometres that the automobile is driven (otherwise than in connection with or in the course of the taxpayer’s office or employment) during the total available days and the value determined for the description of B for the year in respect of the standby charge for the automobile during the total available days, if
  - (i) the taxpayer is required by the employer to use the automobile in connection with or in the course of the office or employment, and
  - (ii) the distance travelled by the automobile in the total available days is primarily in connection with or in the course of the office or employment, and
- (b) the value determined for the description of B for the year in respect of the standby charge for the automobile during the total available days, in any other case;
Bis the product obtained when 1,667 is multiplied by the quotient obtained by dividing the total available days by 30 and, if the quotient so obtained is not a whole number and exceeds one, by rounding it to the nearest whole number or, where that quotient is equidistant from two consecutive whole numbers, by rounding it to the lower of those two numbers;Cis the cost of the automobile to the employer where the employer owns the vehicle at any time in the year;Dis the number obtained by dividing such of the total available days as are days when the employer owns the automobile by 30 and, if the quotient so obtained is not a whole number and exceeds one, by rounding it to the nearest whole number or, where that quotient is equidistant from two consecutive whole numbers, by rounding it to the lower of those two numbers;Eis the total of all amounts that may reasonably be regarded as having been payable by the employer to a lessor for the purpose of leasing the automobile during such of the total available days as are days when the automobile is leased to the employer; andFis the part of the amount determined for E that may reasonably be regarded as having been payable to the lessor in respect of all or part of the cost to the lessor of insuring against
- (a) loss of, or damage to, the automobile, or
- (b) liability resulting from the use or operation of the automobile.
Automobile salesperson
(2.1) Where in a taxation year
- (a) a taxpayer was employed principally in selling or leasing automobiles,
- (b) an automobile owned by the taxpayer’s employer was made available by the employer to the taxpayer or to a person related to the taxpayer, and
- (c) the employer has acquired one or more automobiles,
the amount that would otherwise be determined under subsection 6(2) as a reasonable standby charge shall, at the option of the employer, be computed as if
- (d) the reference in the formula in subsection 6(2) to “2%” were read as a reference to “1 1/2%”, and
- (e) the cost to the employer of the automobile were the greater of
  - (i) the quotient obtained by dividing
    - (A) the cost to the employer of all new automobiles acquired by the employer in the year for sale or lease in the course of the employer’s business
    by
    - (B) the number of automobiles described in clause 6(2.1)(e)(i)(A), and
  - (ii) the quotient obtained by dividing
    - (A) the cost to the employer of all automobiles acquired by the employer in the year for sale or lease in the course of the employer’s business
    by
    - (B) the number of automobiles described in clause 6(2.1)(e)(ii)(A).
COVID-19 — automobile operating expense benefit
(2.2) If a taxpayer met the condition in subparagraph (iv) of the description of A in paragraph (1)(k) for the 2019 taxation year in respect of the use of an automobile made available to the taxpayer, or to a person related to the taxpayer, by an employer (within the meaning assigned by subsection (2)), then for the purpose of applying paragraph (1)(k) in respect of an automobile provided by that employer in 2020 or 2021 (referred to in this subsection as the “relevant year”), the amount determined for A in paragraph (1)(k) in respect of the automobile for the relevant year is deemed to be the lesser of
- (a) ½ of the amount determined under subparagraph (1)(e)(i) in respect of the automobile for the relevant year, and
- (b) the amount determined under subparagraph (v) of the description of A in paragraph (1)(k) in respect of the automobile for the relevant year.
COVID-19 — reasonable standby charge
(2.3) A taxpayer is deemed to meet the condition in subparagraph (a)(ii) of the description of A in subsection (2) in respect of an employer (within the meaning assigned by subsection (2)) for the 2020 or 2021 taxation year if the taxpayer met the conditions in subparagraphs (a)(i) and (ii) of the description of A in subsection (2) for the 2019 taxation year in respect of an automobile made available to the taxpayer, or to a person related to the taxpayer, by that employer.
Payments by employer to employee
(3) An amount received by one person from another
- (a) during a period while the payee was an officer of, or in the employment of, the payer, or
- (b) on account, in lieu of payment or in satisfaction of an obligation arising out of an agreement made by the payer with the payee immediately prior to, during or immediately after a period that the payee was an officer of, or in the employment of, the payer,
shall be deemed, for the purposes of section 5, to be remuneration for the payee’s services rendered as an officer or during the period of employment, unless it is established that, irrespective of when the agreement, if any, under which the amount was received was made or the form or legal effect thereof, it cannot reasonably be regarded as having been received
- (c) as consideration or partial consideration for accepting the office or entering into the contract of employment,
- (d) as remuneration or partial remuneration for services as an officer or under the contract of employment, or
- (e) in consideration or partial consideration for a covenant with reference to what the officer or employee is, or is not, to do before or after the termination of the employment.
Amount receivable for covenant
(3.1) If an amount (other than an amount to which paragraph (1)(a) applies because of subsection (11)) is receivable at the end of a taxation year by a taxpayer in respect of a covenant, agreed to by the taxpayer more than 36 months before the end of that taxation year, with reference to what the taxpayer is, or is not, to do, and the amount would be included in the taxpayer’s income for the year under this Subdivision if it were received by the taxpayer in the year, the amount
- (a) is deemed to be received by the taxpayer at the end of the taxation year for services rendered as an officer or during the period of employment; and
- (b) is deemed not to be received at any other time.
Group term life insurance
(4) Where at any time in a taxation year a taxpayer’s life is insured under a group term life insurance policy, there shall be included in computing the taxpayer’s income for the year from an office or employment the amount, if any, prescribed for the year in respect of the insurance.
(5) [Repealed, 1995, c. 3, s. 1]
Employment at special work site or remote location
(6) Notwithstanding subsection 6(1), in computing the income of a taxpayer for a taxation year from an office or employment, there shall not be included any amount received or enjoyed by the taxpayer in respect of, in the course or by virtue of the office or employment that is the value of, or an allowance (not in excess of a reasonable amount) in respect of expenses the taxpayer has incurred for,
- (a) the taxpayer’s board and lodging for a period at
  - (i) a special work site, being a location at which the duties performed by the taxpayer were of a temporary nature, if the taxpayer maintained at another location a self-contained domestic establishment as the taxpayer’s principal place of residence
    - (A) that was, throughout the period, available for the taxpayer’s occupancy and not rented by the taxpayer to any other person, and
    - (B) to which, by reason of distance, the taxpayer could not reasonably be expected to have returned daily from the special work site, or
  - (ii) a location at which, by virtue of its remoteness from any established community, the taxpayer could not reasonably be expected to establish and maintain a self-contained domestic establishment,
  if the period during which the taxpayer was required by the taxpayer’s duties to be away from the taxpayer’s principal place of residence, or to be at the special work site or location, was not less than 36 hours; or
- (b) transportation between
  - (i) the principal place of residence and the special work site referred to in subparagraph 6(6)(a)(i), or
  - (ii) the location referred to in subparagraph 6(6)(a)(ii) and a location in Canada or a location in the country in which the taxpayer is employed,
  in respect of a period described in paragraph 6(6)(a) during which the taxpayer received board and lodging, or a reasonable allowance in respect of board and lodging, from the taxpayer’s employer.
Cost of property or service
(7) To the extent that the cost to a person of purchasing a property or service or an amount payable by a person for the purpose of leasing property is taken into account in determining an amount required under this section to be included in computing a taxpayer’s income for a taxation year, that cost or amount payable, as the case may be, shall include any tax that was payable by the person in respect of the property or service or that would have been so payable if the person were not exempt from the payment of that tax because of the nature of the person or the use to which the property or service is to be put.
GST rebates re costs of property or service
(8) If
- (a) an amount in respect of an outlay or expense is deducted under section 8 in computing the income of a taxpayer for a taxation year from an office or employment, or
- (b) an amount is included in the capital cost to a taxpayer of a property described in subparagraph 8(1)(j)(ii) or 8(1)(p)(ii),
and a particular amount is paid to the taxpayer in a particular taxation year as a rebate under the Excise Tax Act in respect of any goods and services tax included in the amount of the outlay or expense, or the capital cost of the property, as the case may be, the particular amount
- (c) to the extent that it relates to an outlay or expense referred to in paragraph (a), shall be included in computing the taxpayer’s income from an office or employment for the particular taxation year, and
- (d) to the extent that it relates to the capital cost of property referred to in paragraph (b), is deemed, for the purposes of subsection 13(7.1), to have been received by the taxpayer in the particular taxation year as assistance from a government for the acquisition of the property.
Amount in respect of interest on employee debt
(9) Where an amount in respect of a loan or debt is deemed by subsection 80.4(1) to be a benefit received in a taxation year by an individual, the amount of the benefit shall be included in computing the income of the individual for the year as income from an office or employment.
Contributions to an employee benefit plan
(10) For the purposes of subparagraph 6(1)(g)(ii),
- (a) an amount included in the income of an individual in respect of an employee benefit plan for a taxation year preceding the year in which it was paid out of the plan shall be deemed to be an amount contributed to the plan by the individual; and
- (b) where an amount is received in a taxation year by an individual from an employee benefit plan that was in a preceding year an employee trust, such portion of the amount so received by the individual as does not exceed the amount, if any, by which the lesser of
  - (i) the amount, if any, by which
    - (A) the total of all amounts allocated to the individual or a deceased person of whom the individual is an heir or legal representative by the trustee of the plan at a time when it was an employee trust
    exceeds
    - (B) the total of all amounts previously paid out of the plan to or for the benefit of the individual or the deceased person at a time when the plan was an employee trust, and
  - (ii) the portion of the amount, if any, by which the cost amount to the plan of its property immediately before it ceased to be an employee trust exceeds its liabilities at that time that
    - (A) the amount determined under subparagraph 6(10)(b)(i) in respect of the individual
    is of
    - (B) the total of amounts determined under subparagraph 6(10)(b)(i) in respect of all individuals who were beneficiaries under the plan immediately before it ceased to be an employee trust
  exceeds
  - (iii) the total of all amounts previously received out of the plan by the individual or a deceased person of whom the individual is an heir or legal representative at a time when the plan was an employee benefit plan to the extent that the amounts were deemed by this paragraph to be a return of amounts contributed to the plan
  shall be deemed to be the return of an amount contributed to the plan by the individual.
Salary deferral arrangement
(11) Where at the end of a taxation year any person has a right under a salary deferral arrangement in respect of a taxpayer to receive a deferred amount, an amount equal to the deferred amount shall be deemed, for the purposes only of paragraph 6(1)(a), to have been received by the taxpayer as a benefit in the year, to the extent that the amount was not otherwise included in computing the taxpayer’s income for the year or any preceding taxation year.
Idem
(12) Where at the end of a taxation year any person has a right under a salary deferral arrangement (other than a trust governed by a salary deferral arrangement) in respect of a taxpayer to receive a deferred amount, an amount equal to any interest or other additional amount that accrued to, or for the benefit of, that person to the end of the year in respect of the deferred amount shall be deemed at the end of the year, for the purposes only of subsection 6(11), to be a deferred amount that the person has a right to receive under the arrangement.
Application
(13) Subsection 6(11) does not apply in respect of a deferred amount under a salary deferral arrangement in respect of a taxpayer that was established primarily for the benefit of one or more non-resident employees in respect of services to be rendered in a country other than Canada, to the extent that the deferred amount
- (a) was in respect of services rendered by an employee who
  - (i) was not resident in Canada at the time the services were rendered, or
  - (ii) was resident in Canada for a period (in this subsection referred to as an “excluded period”) of not more than 36 of the 72 months preceding the time the services were rendered and was an employee to whom the arrangement applied before the employee became resident in Canada; and
- (b) cannot reasonably be regarded as being in respect of services rendered or to be rendered during a period (other than an excluded period) when the employee was resident in Canada.
Part of plan or arrangement
(14) Where deferred amounts under a salary deferral arrangement in respect of a taxpayer (in this subsection referred to as “that arrangement”) are required to be included as benefits under paragraph 6(1)(a) in computing the taxpayer’s income and that arrangement is part of a plan or arrangement (in this subsection referred to as the “plan”) under which amounts or benefits not related to the deferred amounts are payable or provided, for the purposes of this Act, other than this subsection,
- (a) that arrangement shall be deemed to be a separate arrangement independent of other parts of the plan of which it is a part; and
- (b) where any person has a right to a deferred amount under that arrangement, an amount received by the person as a benefit at any time out of or under the plan shall be deemed to have been received out of or under that arrangement except to the extent that it exceeds the amount, if any, by which
  - (i) the total of all deferred amounts under that arrangement that were included under paragraph 6(1)(a) as benefits in computing the taxpayer’s income for taxation years ending before that time
  exceeds
  - (ii) the total of
    - (A) all deferred amounts received by any person before that time out of or under the plan that were deemed by this paragraph to have been received out of or under that arrangement, and
    - (B) all deferred amounts under that arrangement that were deducted under paragraph 8(1)(o) in computing the taxpayer’s income for the year or preceding taxation years.
Forgiveness of employee debt
(15) For the purpose of paragraph 6(1)(a),
- (a) a benefit shall be deemed to have been enjoyed by a taxpayer at any time an obligation issued by any debtor (including the taxpayer) is settled or extinguished; and
- (b) the value of that benefit shall be deemed to be the forgiven amount at that time in respect of the obligation.
Forgiven amount
(15.1) For the purpose of subsection 6(15), the forgiven amount at any time in respect of an obligation issued by a debtor has the meaning that would be assigned by subsection 80(1) if
- (a) the obligation were a commercial obligation (within the meaning assigned by subsection 80(1)) issued by the debtor;
- (b) no amount included in computing income because of the obligation being settled or extinguished at that time were taken into account;
- (c) the definition forgiven amount in subsection 80(1) were read without reference to paragraphs (f) and (h) of the description of B in that definition; and
- (d) section 80 were read without reference to paragraphs (2)(b) and (q) of that section.
Disability-related employment benefits
(16) Notwithstanding subsection 6(1), in computing an individual’s income for a taxation year from an office or employment, there shall not be included any amount received or enjoyed by the individual in respect of, in the course of or because of the individual’s office or employment that is the value of a benefit relating to, or an allowance (not in excess of a reasonable amount) in respect of expenses incurred by the individual for,
- (a) the transportation of the individual between the individual’s ordinary place of residence and the individual’s work location (including parking near that location) if the individual is blind or is a person in respect of whom an amount is deductible, or would but for paragraph 118.3(1)(c) be deductible, because of the individual’s mobility impairment, under section 118.3 in computing a taxpayer’s tax payable under this Part for the year; or
- (b) an attendant to assist the individual in the performance of the individual’s duties if the individual is a person in respect of whom an amount is deductible, or would but for paragraph 118.3(1)(c) be deductible, under section 118.3 in computing a taxpayer’s tax payable under this Part for the year.
Definitions
(17) The definitions in this subsection apply in this subsection and subsection 6(18).
disability policy
disability policy means a group disability insurance policy that provides for periodic payments to individuals in respect of the loss of remuneration from an office or employment. (police d’assurance-invalidité)
employer
employer of an individual includes a former employer of the individual. (employeur)
top-up disability payment
top-up disability payment in respect of an individual means a payment made by an employer of the individual as a consequence of the insolvency of an insurer that was obligated to make payments to the individual under a disability policy where
- (a) the payment is made to an insurer so that periodic payments made to the individual under the policy will not be reduced because of the insolvency, or will be reduced by a lesser amount, or
- (b) the following conditions are satisfied:
  - (i) the payment is made to the individual to replace, in whole or in part, periodic payments that would have been made under the policy to the individual but for the insolvency, and
  - (ii) the payment is made under an arrangement by which the individual is required to reimburse the payment to the extent that the individual subsequently receives an amount from an insurer in respect of the portion of the periodic payments that the payment was intended to replace.
For the purposes of paragraphs (a) and (b), an insurance policy that replaces a disability policy is deemed to be the same policy as, and a continuation of, the disability policy that was replaced. (paiement compensatoire pour invalidité)
Group disability benefits — insolvent insurer
(18) Where an employer of an individual makes a top-up disability payment in respect of the individual,
- (a) the payment is, for the purpose of paragraph 6(1)(a), deemed not to be a benefit received or enjoyed by the individual;
- (b) the payment is, for the purpose of paragraph 6(1)(f), deemed not to be a contribution made by the employer to or under the disability insurance plan of which the disability policy in respect of which the payment is made is or was a part; and
- (c) if the payment is made to the individual, it is, for the purpose of paragraph 6(1)(f), deemed to be an amount payable to the individual pursuant to the plan.
Benefit re housing loss
(19) For the purpose of paragraph (1)(a), an amount paid at any time in respect of a housing loss (other than an eligible housing loss) to or on behalf of a taxpayer or a person who does not deal at arm’s length with the taxpayer in respect of, in the course of or because of, an office or employment is deemed to be a benefit received by the taxpayer at that time because of the office or employment.
Benefit re eligible housing loss
(20) For the purpose of paragraph (1)(a), an amount paid at any time in a taxation year in respect of an eligible housing loss to or on behalf of a taxpayer or a person who does not deal at arm’s length with the taxpayer in respect of, in the course of or because of, an office or employment is deemed to be a benefit received by the taxpayer at that time because of the office or employment to the extent of the amount, if any, by which
- (a) one half of the amount, if any, by which the total of all amounts each of which is so paid in the year or in a preceding taxation year exceeds $15,000
exceeds
- (b) the total of all amounts each of which is an amount included in computing the taxpayer’s income because of this subsection for a preceding taxation year in respect of the loss.
Housing loss
(21) In this section, housing loss at any time in respect of a residence of a taxpayer means the amount, if any, by which the greater of
- (a) the adjusted cost base of the residence at that time to the taxpayer or to another person who does not deal at arm’s length with the taxpayer, and
- (b) the highest fair market value of the residence within the six-month period that ends at that time exceeds
- (c) if the residence is disposed of by the taxpayer or the other person before the end of the first taxation year that begins after that time, the lesser of
  - (i) the proceeds of disposition of the residence, and
  - (ii) the fair market value of the residence at that time, and
- (d) in any other case, the fair market value of the residence at that time.
Eligible housing loss
(22) In this section, eligible housing loss in respect of a residence designated by a taxpayer means a housing loss in respect of an eligible relocation of the taxpayer or a person who does not deal at arm’s length with the taxpayer and, for these purposes, no more than one residence may be so designated in respect of an eligible relocation.
Employer-provided housing subsidies
(23) For greater certainty, an amount paid or the value of assistance provided by any person in respect of, in the course of or because of, an individual’s office or employment in respect of the cost of, the financing of, the use of or the right to use, a residence is, for the purposes of this section, a benefit received by the individual because of the office or employment.

[NOTE: Application provisions are not included in the consolidated text
see relevant amending Acts and regulations.]
R.S., 1985, c. 1 (5th Supp.), s. 6
1994, c. 7, Sch. II, s. 3, Sch. VIII, s. 1, c. 21, s. 2
1995, c. 3, s. 1, c. 21, s. 1
1997, c. 10, s. 267
1998, c. 19, s. 68
1999, c. 22, s. 2
2002, c. 9, s. 20
2003, c. 15, s. 69
2005, c. 21, s. 101
2007, c. 16, s. 1
2009, c. 2, s. 2
2010, c. 25, s. 2
2012, c. 31, s. 2
2013, c. 34, ss. 170, 426
2016, c. 7, s. 114
2017, c. 20, s. 2
2018, c. 12, s. 2
2021, c. 23, s. 2
2023, c. 26, s. 2

This version on Justice Laws

Earlier versions: Justice Laws point-in-time versions of the Act (from 31 August 2004), and CanLII (under “Versions”). On Justice Laws, each version of section 6 links to the one before it.

Enacting and amending legislation

R.S., 1985, c. 1 (5th Supp.), s. 6; 1994, c. 7, Sch. II, s. 3, Sch. VIII, s. 1, c. 21, s. 2; 1995, c. 3, s. 1, c. 21, s. 1; 1997, c. 10, s. 267; 1998, c. 19, s. 68; 1999, c. 22, s. 2; 2002, c. 9, s. 20; 2003, c. 15, s. 69; 2005, c. 21, s. 101; 2007, c. 16, s. 1; 2009, c. 2, s. 2; 2010, c. 25, s. 2; 2012, c. 31, s. 2; 2013, c. 34, ss. 170, 426; 2016, c. 7, s. 114; 2017, c. 20, s. 2
2018, c. 12, s. 2
2021, c. 23, s. 2
2023, c. 26, s. 2
2024, c. 17, s. 2(F)

Text before 2004 is found in the annual Statutes of Canada cited above. Application and coming-into-force provisions are not part of the consolidation; see the amending Acts.

Annotation · 11 topics, swipe for more

Legislative history

Section 6 grew out of a single benefits limb in the 1948 Act into the present list of inclusions, formulas and deeming rules. The account below was assembled from the 1917 compilation, the 1919 amending Act, the 1948 statute, the 1952 and 1970 revisions, the 1971 reform and the amending Acts of 1978, 1981, 1983, 1985, 1986, 1988 and 1990 in scanned copies, the royal-assent texts of the 1994 to 1999 bills on parl.ca, the annual statutes on Justice Laws from 2002, and the twelve point-in-time versions of section 6 on Justice Laws from 31 August 2004, compared word for word. The 1927 revision, the amending Acts of 1949 to 1967 other than as listed in revision source notes, and the pre-2002 Department of Finance explanatory notes could not be examined.

The Income War Tax Act, 1917, S.C. 1917, c. 28, s. 3(1) (assented to 20 September 1917). No separate benefits rule. “Income” meant “the annual net profit or gain or gratuity, whether ascertained and capable of computation as being wages, salary, or other fixed amount, or unascertained as being fees or emoluments, … directly or indirectly received by a person from any office or employment”, so benefits in kind were taxable, if at all, as “gain”, “gratuity” or “emoluments”.
An Act to amend The Income War Tax Act, 1917, S.C. 1919, c. 55, s. 2 (assented to 7 July 1919). New paragraph 3(1)(e): no deduction for personal and living expenses, and “in cases in which personal and living expenses form part of the profit, gain or remuneration of the taxpayer, the same shall be assessed as income”. The first express rule on living expenses provided by an employer. R.S.C. 1927, c. 97 could not be examined.
The Income Tax Act, S.C. 1948, c. 52, s. 5 (assented to 30 June 1948). The first benefits limb. Employment income was the salary, wages and other remuneration received “plus (a) the value of board, lodging and other benefits (except the benefit he derives from his employer’s contributions to or under an approved superannuation fund or plan, group insurance plan or medical services plan) received or enjoyed by him in the year in respect of, in the course of or by virtue of the office or the employment, and (b) all amounts received by him in the year as an allowance for personal or living expenses or as an allowance for any other purpose”, with exceptions for statutory, service and representation allowances. The connecting words and the pairing of benefits with allowances date from this Act.
R.S.C. 1952, c. 148, ss. 5 and 25. Section 5 carried the 1948 text forward (source note: 1948, c. 52, s. 5; 1949 (2nd Sess.), c. 25, s. 1; 1951, c. 51, s. 1; 1951 (2nd Sess.), c. 7, s. 23), adding allowance exceptions for agents-general, salespersons’ travel, clergy transportation and time-based travel. Section 25, the ancestor of subsection 6(3), deemed an amount received during or under an agreement made immediately before, during or immediately after an employment to be remuneration unless it could not reasonably be regarded as consideration for accepting the office, remuneration for services, or consideration for a covenant (source note: 1949 (2nd Sess.), c. 25, s. 9).
R.S.C. 1970, c. I-5, s. 5. The benefits exclusion was broadened to contributions to “a registered pension fund or plan, group sickness or accident insurance plan, medical services plan, supplementary unemployment benefit plan, deferred profit sharing plan or group term life insurance policy”; new allowance exceptions covered persons engaged under the Inquiries Act and volunteer firemen up to $300. There was no automobile standby charge.
S.C. 1970-71-72, c. 63, s. 1 (Bill C-259; assented to 23 December 1971; applicable to the 1972 and later taxation years). The tax reform enacted section 6 as the list of inclusions completing section 5. Paragraph 6(1)(a) took the words “other benefits of any kind whatever” and the exclusion for a “private health services plan”; paragraph (b) carried the allowances rule with exceptions (i) to (viii); paragraph (e) introduced the standby charge, with subsection 6(2) deeming the charge to be not less than 1 per cent of cost per 30 days for an owned car or one-third of the leasing cost; subsection 6(3) re-enacted former section 25 “for the purposes of section 5”; subsection 6(4) taxed group term life insurance premiums for coverage above $25,000; and subsection 6(6) excluded board, lodging and transportation at a “special work site”, which subsection 6(7) defined (pp. 1320 to 1321).
S.C. 1977-78, c. 32, s. 1 (assented to 30 June 1978; 1978 and later years). Replaced subsections 6(6) and (7), moving the temporary-duties test into subparagraph 6(6)(a)(i) and adding the remote-location limb in subparagraph (ii) (pp. 759 to 760).
S.C. 1980-81-82-83, c. 48, s. 1 (assented to 26 February 1981; 1980 and later years). Enacted the employee benefit plan rules: subparagraph 6(1)(a)(ii) excluded benefits “under an employee benefit plan or employee trust”, paragraph 6(1)(g) included amounts received out of or under an employee benefit plan other than death benefits, returns of the employee’s contributions and pension benefits for non-resident service, paragraph 6(1)(h) included amounts allocated by the trustee of an employee trust, and subsection 6(10) treated amounts previously included as contributions and dealt with a plan that had been an employee trust (subsections 1(1), (4), (6) and (7); pp. 1275 to 1276). Subsection 1(5) repealed the former subsection 6(8).
S.C. 1980-81-82-83, c. 140, s. 1 (assented to 30 March 1983; 1982 and later years). Restructured paragraph 6(1)(a) with exceptions for plan contributions, benefits “under an employee benefit plan or employee trust”, and automobile benefits other than operating benefits; extended paragraph 6(1)(e) to cars made available by a person related to the employer, or to a person related to the employee; set the standby charge at 2 per cent of cost per 30 days or two-thirds of net lease cost, with a proration where personal kilometres were less than 1,000 per 30 days (subsection 1(3)); and replaced subsection 6(9) (the section 80.4 interest benefit), applicable after 1981.
S.C. 1985, c. 45, s. 2 (assented to 29 October 1985; 1985 and later years). Replaced paragraph 6(6)(a) with the present structure: board and lodging at a special work site where the taxpayer maintained elsewhere a self-contained domestic establishment as principal place of residence, available and not rented out, or at a remote location, for a period of at least 36 hours (subsections 2(2), (3) and (5); pp. 959 to 960).
S.C. 1986, c. 55, s. 1 (assented to 19 December 1986; 1986 and later years). The salary deferral arrangement rules: paragraph 6(1)(i) and subsections 6(11) to (14).
S.C. 1988, c. 55, s. 1 (assented to 13 September 1988; 1988 and later years). Added the motor-vehicle allowance exception in subparagraph 6(1)(b)(vii.1) and the reasonableness conditions in (x) and (xi); replaced subsections 6(2) to (2.2), introducing “total available days” and a first elective operating-cost benefit of one-half of the standby charge. Element B remained 1,000 kilometres for each 30 days of availability, and the reduction required that “all or substantially all” of the distance be in the employment (the text as quoted in Canada v. Adams, [1998] 3 F.C. 365 (C.A.)).
S.C. 1990, c. 39, s. 1 (assented to 23 October 1990). Added the counselling exclusion in subparagraph 6(1)(a)(iv), for counselling in respect of the mental or physical health of the taxpayer or a related individual or the taxpayer’s re-employment or retirement, for 1988 and later years, and paragraph 6(1)(j), awards and reimbursements of amounts deductible under subsection 8(1), for amounts received after 1989 (p. 667).
S.C. 1990, c. 45, s. 37 (the goods and services tax Act; assented to 17 December 1990; 1991 and later years). Added paragraph 6(1)(e.1), 7 per cent of benefits under paragraphs 6(1)(a) and (e) on supplies to which section 173 of the Excise Tax Act applies, and new subsections 6(7), cost determined without GST, and 6(8), under which a GST rebate on expenses deducted under section 8 was included in employment income and a rebate on the capital cost of a motor vehicle, aircraft or musical instrument was deemed government assistance for subsection 13(7.1) (pp. 1145 to 1146).
R.S.C. 1985, c. 1 (5th Supp.), s. 6. The revised text, which the history note on Justice Laws takes as its starting point. The printed Fifth Supplement was not examined.
S.C. 1994, c. 7, Sch. II, s. 3 and Sch. VIII, s. 1 (Bill C-15; assented to 12 May 1994). Re-enacted in terms of the revised Act amendments made by S.C. 1991, c. 49 (subparagraph 6(1)(a)(v), from 1986; rewording of (b)(vii) and (vii.1), from 1990; the closing words of paragraph (b), including (x) and (xi), with permitted reimbursement of supplementary business insurance, parking, tolls and ferries; and subsection 6(16), disability-related benefits, from 1991) and by S.C. 1993, c. 24 (paragraph 6(1)(e.1), the 7 per cent GST inclusion first enacted in 1990, from 1991).
S.C. 1994, c. 21, s. 2 (Bill C-27; assented to 15 June 1994; 1993 and later years). Narrowed subparagraph 6(1)(a)(iii) to exclude all automobile-use benefits, removed “parking” from (b)(xi), enacted the present operating expense benefit in paragraph 6(1)(k), the residual rule in paragraph 6(1)(l) and the parking rule in subsection 6(1.1), and repealed former subsection 6(2.2).
S.C. 1995, c. 3, s. 1 (Bill C-59; assented to 26 March 1995). Replaced subsection 6(4), moving from a premium-based rule to “the amount, if any, prescribed for the year in respect of the insurance” for periods after June 1994, and repealed subsection 6(5), for 1995 and later years.
S.C. 1995, c. 21, s. 1 (Bill C-70; assented to 22 June 1995). Replaced subsection 6(15) and added subsection 6(15.1), measuring forgiven employee debt by reference to subsection 80(1), for taxation years ending after 21 February 1994.
S.C. 1997, c. 10, s. 267 (assented to 20 March 1997; 1996 and later years). Repealed the GST-on-benefits rule in paragraph 6(1)(e.1) and replaced subsection 6(7) so that cost and lease payments include sales tax.
S.C. 1998, c. 19, s. 68 (Income Tax Amendments Act, 1997; Bill C-28; assented to 18 June 1998). Added subsections 6(17) and (18) on top-up disability payments after an insurer’s insolvency, for payments made after 10 August 1994.
S.C. 1999, c. 22, s. 2 (Income Tax Amendments Act, 1998; Bill C-72; assented to 17 June 1999). Subsection 2(1) repealed the volunteer fireman exception in subparagraph 6(1)(b)(viii) for 1998 and later years, replaced by a deduction for emergency volunteers. Subsection 2(2) added subsections 6(19) to (23) on housing losses and housing subsidies, applicable after 23 February 1998, and from 2001 for relocations where the new employment began before October 1998.
S.C. 2002, c. 9, s. 20 (Budget Implementation Act, 2001; assented to 27 March 2002). Replaced subsection 6(8), GST rebates, for 2002 and later years. The wording it replaced was not compared; the 1990 text is described above.
S.C. 2003, c. 15, s. 69 (Budget Implementation Act, 2003; assented to 19 June 2003; 2003 and later years). Replaced the descriptions of A and B in subsection 6(2): the reduced standby charge now requires use “primarily” for employment, with 1,667 kilometres per 30 days in B, in place of “all or substantially all” employment use and 1,000 kilometres.
S.C. 2005, c. 21, s. 101 (Canadian Forces Members and Veterans Re-establishment and Compensation Act; assented to 13 May 2005). Added paragraph 6(1)(f.1), in force 1 April 2006.
S.C. 2007, c. 16, s. 1 (Bill C-294, a private member’s bill; assented to 22 June 2007). Added subparagraph 6(1)(b)(v.1), board and lodging allowances of up to $300 a month for participants under 21 in sports or recreation programs of charities and non-profit organizations, for taxation years ending after assent; the amount is indexed under section 117.1.
S.C. 2009, c. 2, s. 2 (Budget Implementation Act, 2009; assented to 12 March 2009; 2009 and later years). Limited subparagraph 6(1)(g)(ii) to contributions “not deducted”. The marginal note to subsection 6(2.1) became “Automobile salesperson” in the same point-in-time version, though not by this section.
S.C. 2010, c. 25, s. 2 (Bill C-47; assented to 15 December 2010; after 2009). Added employee life and health trusts to subparagraph 6(1)(a)(i), subparagraph 6(1)(f)(iii.1) and subparagraph 6(1)(g)(iv).
S.C. 2012, c. 31, s. 2 (Jobs and Growth Act, 2012; assented to 14 December 2012). Added pooled registered pension plans to subparagraph 6(1)(a)(i) and re-enacted paragraph 6(1)(e.1) as an inclusion of employer contributions to group sickness or accident plans not attributable to wage-loss benefits, transitional for 2013 and in its current form from 2014.
S.C. 2013, c. 34, ss. 170 and 426 (Technical Tax Amendments Act, 2012; assented to 26 June 2013). Extended paragraph 6(1)(a) to benefits received or enjoyed by non-arm’s-length persons, added the education exception in subparagraph (vi), extended paragraph 6(1)(l) to related persons and added subsection 6(1.2), for benefits on or after 31 October 2011; added subsection 6(3.1) for covenants agreed to after 7 October 2003; replaced the French text of subsection 6(15.1); section 426 coordinated the pooled registered pension plan reference.
S.C. 2016, c. 7, s. 114; S.C. 2017, c. 20, s. 2; S.C. 2018, c. 12, s. 2. Successive amendments to paragraph 6(1)(f.1) only: “career impact allowance” (1 April 2017), the reference to the Veterans Well-being Act (1 April 2018), and the income replacement benefit with its exceptions (1 April 2019). The 2018 Act did not amend paragraph 6(1)(a).
S.C. 2021, c. 23, s. 2 (Budget Implementation Act, 2021, No. 1; assented to 29 June 2021). Added subsections 6(2.2) and (2.3), letting employees use their 2019 employment-use status for 2020 and 2021.
S.C. 2023, c. 26, s. 2 (Budget Implementation Act, 2023, No. 1; assented to 22 June 2023; taxation years beginning after 2022). Amended paragraph 6(1)(e), subparagraph 6(1)(k)(ii) and subsection 6(2) so that the standby charge applies where any person makes an automobile available “because of or as a consequence of a previous, the current or an intended office or employment”.
S.C. 2024, c. 17, s. 2(F) (Budget Implementation Act, 2024, No. 1; assented to 20 June 2024). Replaced the descriptions of B and D in the French version of subsection 6(2); the English text is unchanged.
Current consolidation. Justice Laws HTML, “Act current to 21 September 2026, last amended 18 June 2026” (page modified 28 September 2026). Application provisions are not consolidated and must be taken from the amending Acts. The technical amendment proposals described under pending would further amend paragraphs 6(1)(k) and (l) and subsection 6(2) for 2026 and later years; they are not enacted.

The interpretation tab that follows reads the current text subsection by subsection, noting where the earlier wording still governs past years.

Interpretation and application →

Interpretation and application

Section 6 adds to the pay taxed by section 5 almost everything else an office or employment produces: benefits in kind, allowances, cars, plan receipts, deemed interest, forgiven loans and relocation subsidies. It also carves out what Parliament has chosen not to tax and prescribes formulas where valuation would otherwise be contested. The commentary takes the provisions in their numerical order, grouping those that work together.

Subsection 6(1): structure and relation to section 5

Subsection 6(1) includes “such of the following amounts as are applicable” in computing income from an office or employment. The inclusions are cumulative with the salary, wages and other remuneration in subsection 5(1), and they are not confined to payment for services: income need not be remuneration for services to be employment income (The Queen v. Savage, [1983] 2 S.C.R. 428, at 440). Some later subsections operate “notwithstanding subsection 6(1)” (subsections 6(6) and (16)); others deem amounts to be benefits or remuneration (subsections 6(3), (11), (15), (19), (20) and (23)). Two features of the source frame everything: the definitions of “office” and “employment” in subsection 248(1), and the rule that an employee is in the service of the employer only from the time he or she is obliged to provide services (Schwartz v. Canada, [1996] 1 S.C.R. 254, paras. 57 to 58).

Paragraph 6(1)(a): benefits of any kind whatever

Paragraph 6(1)(a) includes “the value of board, lodging and other benefits of any kind whatever received or enjoyed by the taxpayer, or by a person who does not deal at arm’s length with the taxpayer, in the year in respect of, in the course of, or by virtue of the taxpayer’s office or employment”, subject to six exclusions. It has four elements, a benefit, its receipt or enjoyment, the employment connection and the absence of an exclusion, and a fifth matter, value, fixes the amount.

The benefit element is deliberately wide. Savage adopted the formulation in R. v. Poynton, [1972] 3 O.R. 727 (C.A.), at 738, that a “material acquisition which confers an economic benefit on the taxpayer” and is not exempt falls within the paragraph (at 441), and the Federal Court of Appeal treats that as the starting point (McGoldrick v. Canada, 2004 FCA 189, para. 9; Schroter v. Canada, 2010 FCA 98, paras. 15 to 16). Three refinements follow. “An economic advantage received by an employee from his or her employer will be deemed a benefit within the meaning of paragraph 6(1)(a) unless the employee can demonstrate that the payment was not a benefit in respect of employment, but made in his or her capacity as a person”; a $10,000 payment toward a dearer house on relocation increased the employee’s net worth and was taxable (M.N.R. v. Phillips, [1994] 2 F.C. 680 (C.A.), reasons of Robertson J.A., Parts III and V; quoted in Schroter, para. 17). Conversely, “if, on the whole of a transaction, an employee’s economic position is not improved, that is, if the transaction is a zero-sum situation when viewed in its entirety, a receipt is not a benefit”, so long as the employer is not paying “the ordinary, every day expenses of the employee”; a mortgage interest subsidy that let relocated employees trade like for like without increasing their equity was not taxable (Canada (Attorney General) v. Hoefele, [1996] 1 F.C. 322 (C.A.), Linden J.A. for the majority, Robertson J.A. dissenting; see Smith v. Canada, 2019 FCA 173, para. 39, and Adler v. The Queen, 2007 TCC 272, paras. 73 to 74). Both decisions build on Ransom v. M.N.R., [1968] 1 Ex. C.R. 293, where reimbursement of a transferred employee’s actual loss on the sale of his house “puts nothing in the pocket but merely saves the pocket” and was neither remuneration nor a benefit (at 311). And personal enjoyment that is incidental to a trip whose primary beneficiary is the employer is not taxable (Lowe v. Canada, 96 DTC 6226 (F.C.A.), as characterised in Schroter, paras. 23 and 42).

Smith is the current restatement. The fundamental inquiry is whether the employer conferred something of economic value; the “primary beneficiary” concept helps where value flows both ways, capturing the employer’s purpose and the relation between what is provided and the duties, but these factors “do not give rise to their own tests” (paras. 5 to 6). Commuting costs, parking included, are ordinarily personal and remain so although the employer has a business reason for providing them (paras. 41 to 43); they lose that character only where tied to the duties or the nature of the work, as with the plainclothes officer’s clothing in Huffman v. Canada (1990), 90 DTC 6405 (F.C.A.), as characterised at para. 45. It was decisive that the airline did not require employees to commute by car (para. 51). The line runs between relieving a personal or living cost, which is a benefit, and relieving a cost generated by the duties, which is not: casino shift meals (McGoldrick, para. 9) and northern food transport (Dionne v. Canada, F.C.A., A-48-97, 27 October 1998, paras. 1 to 6) were benefits, while tuition imposed by a rotational foreign-service posting was not (Guay v. Canada, [1997] F.C.J. No. 470 (C.A.)). Employer scholarships for employees’ children were not benefits to parents who had not reduced their own support (Canada v. Bartley, 2008 FCA 390, paras. 8 to 10), a situation subparagraph 6(1)(a)(vi) now addresses. The further applications are listed under Relevant case law.

Receipt or enjoyment is satisfied by the taxpayer or by “a person who does not deal at arm’s length with the taxpayer”, words added by S.C. 2013, c. 34 for benefits on or after 31 October 2011, so that a benefit conferred on a spouse or child is taxable to the employee. “Enjoyed” reaches use without any transfer of property. Property received is included in the year received: warrants allocated to an investment-firm employee were a benefit on allocation, not on later exercise and sale (Canada (Attorney General) v. Henley, 2007 FCA 370, paras. 15 to 25).

The connection is supplied by “in respect of, in the course of, or by virtue of”, read as words of the widest possible scope (Savage, at 440 to 441, applying Nowegijick v. The Queen, [1983] 1 S.C.R. 29). The question is whether the receipt came to the taxpayer qua employee, not whether employment was its only cause; tips paid out of patrons’ non-taxable gambling winnings were still employment income (Xia v. Canada, 2020 FCA 35, paras. 2 to 6). Blanchard v. Canada, [1995] F.C.J. No. 1045 (C.A.), not opened, is characterised as requiring only some connection with employment, subject to exceptions for reimbursed employment expenses and extraneous benefits (Martin v. The King, 2024 TCC 153, paras. 62 to 64). For a shareholder-employee, the capacity in which the benefit was conferred decides between paragraph 6(1)(a) and subsection 15(1); the CRA treats it as a question of fact and presumes that a person who can significantly influence business policy receives the benefit as a shareholder (withdrawn Folio S2-F3-C2, para. 2.3, as quoted in technical interpretation 2017-0703871C6).

The exclusions are specific. Subparagraph (i) excludes benefits derived from employer contributions to a deferred profit sharing plan, employee life and health trust, group sickness or accident insurance plan, group term life insurance policy, pooled registered pension plan, private health services plan, registered pension plan or supplementary unemployment benefit plan; group term life is brought back by subsection 6(4) and group sickness or accident contributions by paragraph 6(1)(e.1). Subparagraph (ii) excludes benefits under a retirement compensation arrangement, employee benefit plan or employee trust, taxed instead on receipt or allocation (for non-residents, see Martin, 2024 TCC 153, paras. 110 to 117). Subparagraph (iii) removes automobile-use benefits to paragraph 6(1)(e). Subparagraph (iv) excludes health, re-employment and retirement counselling, but not financial counselling or tax preparation (Guide T4130); subparagraph (v) excludes salary deferral arrangement benefits except through subsection 6(11); and subparagraph (vi) excludes education-program benefits for others where the employee deals at arm’s length and the benefit is not a substitute for pay. The text of paragraph 6(1)(a) has not changed since the version in force from 26 June 2013.

Value means fair market value to the employee, judged objectively. Schroter held that the existence of a benefit cannot turn on subjective criteria (para. 34), rejected a “cost saved” measure (paras. 44 to 46), and valued a downtown parking pass at the public rate (paras. 47 to 48). Canada v. Spence, 2011 FCA 200, valued teachers’ tuition discounts at the fee a non-employee would pay, not the school’s per-student cost, displacing the cost approach of Detchon v. Canada, [1996] 1 C.T.C. 2475 (T.C.C.) (paras. 10 and 15 to 19), and observed that an employer generally “sees and seeks an advantage” in conferring a benefit (para. 22). Market value may be fixed by reference to the surrounding market even where there is none for the precise item (Anthony v. Canada, 2011 FCA 336, paras. 3 to 8). The CRA allows the employer’s cost only where it reflects fair market value (Guide T4130, chapter 1).

The CRA’s thresholds for gifts ($500 a year in non-cash gifts and awards, with a separate long-service award), social events ($150 a head, up to six a year), parking (not taxed where a vehicle is regularly needed for the duties, or under “scramble” parking) and cell phones are administrative concessions, not law; they are described under CRA documents. The scramble-parking concession sits uneasily with Smith.

Paragraph 6(1)(b): allowances

Paragraph 6(1)(b) includes “all amounts received by the taxpayer in the year as an allowance for personal or living expenses or as an allowance for any other purpose”, subject to the exceptions in subparagraphs (i) to (ix) and the deeming rules in (x) and (xi). An allowance is an arbitrary amount, paid for a specified purpose, that the recipient may spend without accounting (Ransom v. M.N.R., [1968] 1 Ex. C.R. 293, at 309 to 310; Canada (Attorney General) v. MacDonald, 94 DTC 6262 (F.C.A.), as characterised in Bériault v. Canada, 2003 FCA 430, paras. 3 to 7, and Hamilton v. The Queen, 2020 TCC 23, paras. 7 and 16). A receipted reimbursement of an employment expense is not an allowance and, on the authorities under paragraph 6(1)(a), is generally not a benefit either.

Subparagraphs (i) to (ix) except statutory, Canadian Forces and representation allowances, reasonable travel allowances of salespersons (v), youth sports board and lodging up to $300 a month, indexed ((v.1); the CRA gives $441 for 2025), clergy transportation (vi), reasonable travel allowances, other than for a motor vehicle, for travel away from the municipality and metropolitan area of the employer’s establishment (vii), reasonable motor vehicle allowances (vii.1), and certain schooling allowances (ix). Home-to-work travel is not travel in the performance of duties, so a councillor’s allowance for travel to council meetings was taxable (Daniels v. Canada (Attorney General), 2004 FCA 125, paras. 6 to 8), and distances must be measured from the employee’s residence, not a union pick-up point (Hamilton, paras. 16 to 26).

For subparagraphs (v), (vi) and (vii.1), a motor vehicle allowance is deemed unreasonable if it is not based solely on kilometres driven in the employment (subparagraph (x)) or if the employee is also reimbursed for the same use, apart from supplementary business insurance, tolls and ferries (subparagraph (xi)). A per-kilometre allowance computed on the previous period’s estimate failed subparagraph (x) (Ville de Beauport v. Canada (Minister of National Revenue), 2001 FCA 198, paras. 16 to 18). An unreasonable allowance is included in full, not severed into reasonable and unreasonable parts; the purpose of paragraph 6(1)(b) is to stop salary being disguised as tax-free allowances (Canada (National Revenue) v. Al Saunders Contracting & Consulting Inc., 2020 FCA 89, paras. 21 to 36). The CRA treats the section 7306 rates as its benchmark of reasonableness; the consolidated regulation gives 72 cents for the first 5,000 kilometres and 66 cents after, while the CRA’s page states 73 and 67 cents for 2026. Reasonableness is a question of fact, and an excluded allowance bars the paragraph 8(1)(h.1) deduction even if the CRA’s rate was higher (Bykov v. The King, 2024 TCC 36, paras. 55 to 62, affirmed 2025 FCA 103), whereas an allowance deemed unreasonable is included and opens the deduction (paras. 63 to 69).

Paragraph 6(1)(c) includes “director’s or other fees received by the taxpayer in the year in respect of, in the course of, or by virtue of an office or employment”. A directorship is an office, so fees are employment income even for a non-employee director. Paragraph 6(1)(d) includes amounts allocated by a trustee under an employees profit sharing plan as provided by section 144 (except subsection 144(4)) and amounts required by subsection 144(7). The employee is taxed on allocation; payments out are excluded by subsection 144(6). Allocations to an owner-manager’s family through such a plan were not remuneration paid by the employer for Canada Pension Plan purposes (Allan A. Greber Professional Corporation v. M.N.R., 2007 TCC 78, paras. 67 to 77).

Paragraphs 6(1)(e), (k) and (l) and subsections 6(2) to (2.3): automobile benefits

Paragraph 6(1)(e) includes the excess of a reasonable standby charge for the days in the year on which an automobile was made available to the taxpayer or a non-arm’s-length person over amounts (other than operating expenses) paid for its use. Since S.C. 2023, c. 26, for taxation years beginning after 2022, the paragraph applies whoever makes the car available, “because of or as a consequence of a previous, the current or an intended office or employment”; the earlier text referred to the employer or a person related to the employer. Availability, not use, triggers the charge: an automobile is made available where it is at the employee’s disposal with a right of use, restrictions on use do not matter, and a lease from the employer that is tied to the employment does not displace the formula (Canada v. Adams, [1998] 3 F.C. 365 (C.A.), reasons of Robertson J.A.; Martin v. The Queen, 2009 TCC 3, para. 118), and the charge is prorated to the days actually available (Gill v. The Queen, 2005 TCC 244, paras. 10 to 16). Personal use of a vehicle that is not an “automobile” remains a paragraph 6(1)(a) benefit, and subsection 15(5) imports the formula for shareholders (Servais v. The Queen, 2003 FCA 329, paras. 7 to 11).

Subsection 6(2) deems the standby charge to be A/B × [2% × (C × D) + 2/3 × (E − F)]: 2 per cent of the employer’s cost per 30-day period for an owned car, or two-thirds of the lease cost net of insurance. A equals B (1,667 kilometres per 30 days) unless the employer requires the employee to use the car in the employment and the distance is “primarily” in the employment, in which case A is the lesser of personal kilometres and B; the reduction formerly required “all or substantially all” employment use against a B of 1,000 kilometres per 30 days, and Adams described the standby provisions as “carefully crafted with the object of promoting certainty at the expense of flexibility”. The CRA reads “primarily” as more than 50 per cent. Cost includes sales taxes (subsection 6(7)); the ceilings in section 7307 of the Regulations limit the employer’s deductions, not elements C or E. Subsection 6(2.1) lets the employer of an automobile salesperson use 1.5 per cent and an average cost.

Paragraph 6(1)(k) adds the operating expense benefit where the employer pays personal-use operating costs not repaid within 45 days after the year: A − B, where A is either one-half of the standby charge (subparagraph (iv), on written notice before year-end where use is primarily for employment) or the prescribed rate times personal kilometres (subparagraph (v); 34 cents, or 31 cents for automobile salespersons, under section 7305.1 of the Regulations, the CRA giving these figures for 2025 and 2026), and B is repayments within the year or 45 days after it. Paragraph 6(1)(l) catches operating benefits where no standby charge arises, typically employer-paid costs of the employee’s own car; reimbursed automobile expenses fall there and not under paragraphs (a), (b) or (k) (Burton v. Canada, 2006 FCA 67, paras. 8 to 9). Subsections 6(2.2) and (2.3) carried 2019 employment-use status into 2020 and 2021 with the same employer (technical interpretation 2021-0900691E5).

Paragraphs 6(1)(e.1), (f) and (f.1) and subsections 6(17) and (18): insurance and wage-loss plans

Paragraph 6(1)(e.1) includes employer contributions to a group sickness or accident insurance plan except those attributable to benefits that would be taxable under paragraph 6(1)(f), so that premiums for accidental death, critical illness and similar coverage are taxed currently while wage-loss premiums are not. Paragraph 6(1)(f) includes periodic amounts received for loss of employment income under a sickness or accident, disability or income maintenance plan (or one administered by an employee life and health trust) “to or under which the taxpayer’s employer has made a contribution”, net of the employee’s contributions since the last year of inclusion. An employee-pay-all plan therefore yields non-taxable benefits, and a plan was employee-pay-all for an executive class where the employer merely withheld, remitted and reimbursed the premium (Brine v. The Queen, 2006 TCC 458, paras. 3 to 9); fully employer-funded pilots’ disability benefits were taxable (Price v. Canada, 2012 FCA 332, paras. 11 and 27). A lump-sum settlement is taxable to the extent it replaces arrears of periodic benefits, applying the surrogatum principle (Tsiaprailis v. Canada, 2005 SCC 8, paras. 15 to 16); whether a settlement contains such a component is a question of fact (Canada v. Siftar, 2003 FCA 137, paras. 4 to 5). Paragraph 6(1)(f.1) includes earnings loss and income replacement benefits, supplementary retirement benefits and career impact allowances under Part 2 of the Veterans Well-being Act, and amounts under subsections 99(6), 109(1) and 115(5) and sections 124 to 126 of that Act. Subsections 6(17) and (18) neutralise an employer’s top-up after an insurer’s insolvency; see Definitions.

Paragraphs 6(1)(g) and (h) and subsections 6(1.2) and 6(10): employee benefit plans and employee trusts

Paragraph 6(1)(g) includes amounts received out of or under an employee benefit plan, or on disposing of an interest in one, other than death benefits, a return of non-deducted contributions, pension benefits for non-resident service, and designated employee benefits under subsection 144.1(1). An employee trust that met the employee benefit plan definition was governed by those rules although it was also a prescribed trust, and share distributions were included at fair market value; the “excluded payment” language is part of the definition, not a taxing rule, and does not split one arrangement into two (McNeeley v. Canada, 2021 FCA 218, paras. 22 to 50). Subsection 6(1.2) deems an amount received by a non-arm’s-length individual in respect of a living taxpayer’s employment to be received by the taxpayer. Subsection 6(10) treats amounts previously included as contributions, and supplies the formula for a plan that was formerly an employee trust. Paragraph 6(1)(h) taxes allocations by the trustee of an employee trust, on allocation rather than receipt.

Paragraph 6(1)(i) and subsections 6(11) to (14): salary deferral arrangements

Subsection 6(11) deems a deferred amount that any person has a right to receive at year-end under a salary deferral arrangement to have been received by the taxpayer as a benefit, “for the purposes only of paragraph 6(1)(a)”, to the extent not previously included; subsection 6(12) adds accrued interest, other than in a trust; subsection 6(13) excludes amounts for non-resident service or an excluded period under plans established primarily for non-residents; and subsection 6(14) isolates the arrangement within a larger plan. Paragraph 6(1)(i) then taxes receipts only to the extent they exceed amounts already included, net of paragraph 8(1)(o) deductions for forfeited amounts. The common exits from the definition are the three-year bonus in paragraph (k), which the CRA reads as payment by the end of the third calendar year after the service year (technical interpretation 2015-0610801C6), the deferred salary leave plan in paragraph 6801(a) of the Regulations, and deferred share unit plans in paragraph 6801(d). An arrangement failing the retirement compensation arrangement requirements is likely to be a salary deferral arrangement, taxed currently (Martin, 2024 TCC 153, para. 115).

Paragraph 6(1)(j): reimbursements and awards

Paragraph 6(1)(j) includes awards or reimbursements of amounts that would be deductible under subsection 8(1), except to the extent otherwise included or taken into account in the section 8 claim: a matching rule against double relief.

Subsections 6(1.1) and 6(1.2): parking and plan receipts

Subsection 6(1.1) provides that for section 6 an amount or benefit in respect of the use of a motor vehicle “does not include any amount or benefit related to the parking of the vehicle”. It removes parking from the standby charge, operating benefit and allowance rules; it does not exempt it. Employer parking is therefore a paragraph 6(1)(a) benefit valued at market (Schroter; Smith; Anthony), and the CRA excludes parking from operating costs. Subsection 6(1.2) is discussed with paragraph 6(1)(g).

Subsections 6(3) and 6(3.1): payments before, during and after employment

Subsection 6(3) deems an amount received during an office or employment, or under an agreement made immediately before, during or immediately after it, to be remuneration “for the purposes of section 5” unless “it is established that, irrespective of when the agreement … was made or the form or legal effect thereof, it cannot reasonably be regarded as having been received” (c) for accepting the office or entering the contract, (d) as remuneration for services, or (e) for a covenant about what the employee is or is not to do. The deeming is rebuttable and the burden is on the taxpayer (Nonis v. The Queen, 2021 TCC 31, para. 20), who escapes only by establishing that the amount cannot reasonably be regarded as received under any of the three heads. The payer must be the employer or the other party to the agreement, so a third party’s inducement payment, as in Curran v. M.N.R., [1959] S.C.R. 850 (as characterised in Schwartz, para. 51), falls outside it. Severance-type payments under a contract made during employment (Morrissette v. The Queen, 2006 TCC 284, para. 16) and client-transition payments to retiring advisors (Bouchard v. The Queen, 2008 TCC 462, paras. 22 and 38 to 42) were within it; a payment discharging liability for cancelled stock options was not (Buccini v. Canada, F.C.A., A-611-98, 20 November 2000).

The line with retiring allowances follows Schwartz: damages for the loss of an employment are a retiring allowance under subparagraph 56(1)(a)(ii), and the CRA treats a lump sum for loss of employment not provided for in the contract as a retiring allowance (Folio S2-F3-C1, Example 3), while a severance entitlement fixed by an agreement during employment may fall within paragraph 6(3)(b). Restrictive covenant payments to an employee are taxed under subsection 6(3) rather than section 56.4, because paragraph 56.4(3)(a) yields to sections 5 and 6. Subsection 6(3.1) deems an amount receivable for a covenant agreed to more than 36 months before the year-end to be received at that year-end (S2-F3-C1, paras. 1.9 to 1.10).

Subsections 6(4) and 6(5): group term life insurance

Subsection 6(4) includes “the amount, if any, prescribed for the year in respect of the insurance” where the taxpayer’s life is insured under a group term life insurance policy. Section 2701 of the Regulations prescribes the term insurance benefit, the prepaid insurance benefit and sales and excise taxes not borne by the employee; section 2702 provides the policyholder’s simplified method where rates do not depend on age or sex; section 2703 deals with lump-sum premiums; and subsection 2704(1) makes the benefit nil where employees bear the full cost. Subsection 6(5) was repealed by S.C. 1995, c. 3, s. 1.

Subsection 6(6): special work sites and remote locations

Subsection 6(6) excludes, notwithstanding subsection 6(1), the value of, or a reasonable allowance for, board and lodging at a special work site or a remote location, and related transportation, where the duties required an absence of at least 36 hours. The purpose is to relieve employees who incur extra costs because of temporary work away from home (Spannier v. The Queen, 2013 TCC 40, para. 24). For a special work site, the duties at the location must be temporary, and the taxpayer must have maintained elsewhere a self-contained domestic establishment, available and not rented out, as principal residence: a Fort McMurray worker who kept her Kelowna home qualified (Spannier, paras. 26 to 48), but an employee posted to a permanent office whose home was rented out did not (Rio v. The Queen, 2015 TCC 286, paras. 21 to 24), nor did an employee working at the employer’s head office far from the construction site (Bourget v. The Queen, 2009 TCC 533, paras. 19 to 22), nor a manager whose continuing duties were not temporary and who had no receipts to show reasonableness (Gessner v. The King, 2023 TCC 87, paras. 25 to 38 and 54). The CRA regards a location as remote if it is 80 kilometres or more from an established community of at least 1,000 people, and Form TD4 supports the exclusion for a special work site (Guide T4130, chapter 3).

Subsections 6(7) and 6(8): sales taxes and GST rebates

Subsection 6(7) requires any cost or lease payment used to compute a section 6 inclusion to include sales tax payable, or that would be payable but for an exemption. Subsection 6(8) includes in employment income a GST rebate under the Excise Tax Act relating to expenses deducted under section 8, and treats a rebate relating to the capital cost of a vehicle, aircraft or musical instrument as government assistance under subsection 13(7.1).

Subsection 6(9): employee loans

Subsection 6(9) includes any amount deemed by subsection 80.4(1) to be a benefit. A loan received because of an individual’s previous, current or intended employment, by the individual or anyone else, generates a benefit equal to interest at the prescribed rate less interest paid within 30 days after the year; subsection 80.4(1.1) deems the employment connection where the terms would otherwise have differed. The prescribed rate under paragraph 4301(c) of the Regulations is the 90-day Treasury bill average rounded up, with no surcharge; it was 3 per cent for every quarter of 2026. For home purchase and home relocation loans subsection 80.4(4) caps the rate at the one in effect when the loan was made, for up to five years; the paragraph 110(1)(j) deduction for home relocation loans was repealed by S.C. 2017, c. 20, s. 8. A debt must exist: cheques booked as loans that were really compensation or advances against future pay gave rise to no interest benefit and no forgiveness (Merchant v. The Queen, 2009 TCC 31, paras. 13 to 28), and a genuine salary advance is taxed under subsection 5(1) (technical interpretation 2015-0623571I7). The boundary between a loan and a subsidy is the subject of Hoefele.

Subsection 6(10)

Subsection 6(10) is discussed with paragraph 6(1)(g).

Subsections 6(15) and (15.1): forgiveness of employee debt

Subsection 6(15) deems a paragraph 6(1)(a) benefit to be enjoyed whenever an obligation of any debtor, including the taxpayer, is settled or extinguished, valued at the forgiven amount defined by subsection 6(15.1). Forgiveness of a $5 million loan was taxable (Rémillard v. The Queen, 2011 TCC 327, paras. 40 to 69), as was settlement of forgivable notes for less than the balance, “settled” being read consistently with section 80 (Matte v. The King, 2025 TCC 16, paras. 68 to 80). Forgiveness in a shareholder capacity falls under subsection 15(1).

Subsection 6(16) excludes, notwithstanding subsection 6(1), the value of benefits or reasonable allowances for transportation between home and work, including nearby parking, for an individual who is blind or eligible for the disability tax credit because of a mobility impairment, and for an attendant to assist in the duties of an individual eligible for that credit. It is the statutory exception to the personal character of commuting.

Subsections 6(17) and (18)

Subsections 6(17) and (18) are discussed with paragraph 6(1)(f), and their terms under Definitions.

Subsections 6(19) to (22): housing losses on relocation

Subsection 6(19) deems an amount paid in respect of a housing loss, other than an eligible housing loss, to or for the taxpayer or a non-arm’s-length person because of the employment to be a benefit in full. Subsection 6(20) taxes reimbursement of an eligible housing loss only on one-half of the cumulative amount over $15,000: a $40,000 eligible loss reimbursed in one year produces a benefit of $12,500 (Guide T4130). The loss must arise from an eligible relocation; a loss on a terminated employee’s house (Thomas v. Canada, 2007 FCA 57) and compensation under a home equity retention agreement (technical interpretations 2016-0669531E5 and 2017-0716001E5) did not qualify. The rules displaced older authority treating reimbursement of an actual loss on sale as non-taxable (Ransom v. M.N.R., [1968] 1 Ex. C.R. 293, at 309 to 312; Schroter, para. 19).

Subsection 6(23): employer-provided housing subsidies

Subsection 6(23) provides, for greater certainty, that an amount paid or assistance provided by any person because of an individual’s employment in respect of the cost, financing, use or right to use a residence is a benefit. It forecloses the zero-sum argument in Hoefele for housing assistance, and Desrosiers had already held a home-purchase payment taxable. Mortgage and rent subsidies and free or below-market housing are valued at fair market value, a low-interest housing loan being measured instead under section 80.4.

The policy tab that follows explains why the section takes this shape, and the case-law tab collects the decisions referred to above.

← Legislative history Policy purpose and commentary →

Policy purpose and commentary

Section 6 exists so that employees paid partly in kind are taxed on the same footing as employees paid in cash. This tab sets out that rationale, the Department of Finance material located, and the commentary.

The organising principle is horizontal equity between cash and in-kind pay. The Royal Commission on Taxation (Carter Commission), Report, vol. 3 (1966), ch. 8, observed that benefits that “save the pocket” increase economic power “just as do cash receipts”, and that untaxed benefits let the parties share the tax saving as a subsidy; in ch. 14 it said that the law “provides for the taxation of such benefits, but the administration has been unable to enforce the law effectively”, proposed valuation at purchase cost and arbitrary limits on employer-paid living expenses, and accepted that arbitrary but enforced rules give more “rough justice” than general but unenforced ones. The courts state the same purpose: equal treatment of cash and in-kind compensation, so that “employees who receive their compensation in cash are on the same footing as those who receive compensation in some combination of cash and kind” (Phillips, reasons of Robertson J.A., Part V; Smith, para. 34) and preventing salary from being disguised as tax-free allowances (Al Saunders, para. 35). The history shows Parliament moving from general words to formulas for the items hardest to value: the standby charge, the operating benefit, group term life and housing losses. The salary deferral rules of 1986 are anti-deferral provisions that tax a right at year-end rather than on receipt. The housing loss rules were described in the summary to Bill C-72 as requiring inclusion of all financing reimbursements and “one-half the amount in excess of $15,000 in respect of an eligible housing loss”, a compromise between full inclusion and the employer’s interest in relocation. The 2023 extension of the standby charge was explained as achieving consistency with paragraph 6(1)(a) “regardless of whether the employer makes the benefit available or if an employee employer relationship exists at the time” (Department of Finance, Explanatory Notes, April 2023). The Department’s Report on Federal Tax Expenditures 2026, Part 2, lists “Employee benefit plans” and “Non-taxation of certain non-monetary employment benefits” without estimates, and “Non-taxation of benefits from private health and dental plans” (personal income tax, classified under health) at a projected $5,445 million for 2026, up from an estimated $3,150 million for 2020 (Part 2, table of estimates and projections, in millions of dollars).

Commentary verified on publisher or repository pages, but not read for pinpoints: Joanne Magee, “Employee Benefit Plans Revisited” (1984) 32:4 Canadian Tax Journal 773; Kim Brooks, “Delimiting the Concept of Income: The Taxation of In-Kind Benefits” (2004) 49:2 McGill Law Journal 255; Vern Krishna, Fundamentals of Canadian Income Tax, vol. 1, Personal Tax, 2nd ed. (Toronto: Thomson Reuters, 2021); Jinyan Li and Joanne E. Magee, Principles of Canadian Income Tax Law, 11th ed. (Toronto: Thomson Reuters); and David G. Duff, Geoffrey Loomer, Bradley Bryan and Rory Gillis, Canadian Income Tax Law, 7th ed. (Toronto: LexisNexis, 2023). Canadian Tax Foundation material could not be opened.

The next tab collects the decisions on which this commentary and the interpretation tab rely.

← Interpretation and application Relevant case law →

Relevant case law

The decisions below are grouped by provision. Each was read on the court’s own site, or for reported decisions before 2000 in the Federal Courts Reports collection, unless the entry says it was not opened, in which case it is described only as a later decision characterises it.

Paragraph 6(1)(a): what is a benefit

Ransom v. M.N.R., [1968] 1 Ex. C.R. 293, also reported at 67 DTC 5235. An employer’s reimbursement of a transferred employee’s actual loss on selling his house was neither remuneration, nor a benefit “of any kind whatsoever”, nor an allowance: reimbursement “puts nothing in the pocket but merely saves the pocket” (at 311), and an allowance is an arbitrary amount paid without obligation to account (at 309 to 310); the deeming rule now in subsection 6(3) was rebutted (at 306). Applied in Hoefele and distinguished in Phillips; the housing loss rules in subsections 6(19) to (22) now govern such reimbursements.
The Queen v. Savage, [1983] 2 S.C.R. 428. “Benefits of whatever kind” is broad; “in respect of” has the widest scope; the Poynton “material acquisition” test is adopted (at 440 to 441). Income need not be remuneration for services; the $300 award was nonetheless an exempt prize under the then paragraph 56(1)(n).
Blanchard v. Canada, [1995] F.C.J. No. 1045 (C.A.) (A-1532-92, 5 June 1995). An all-embracing provision requiring only some connection with employment, with exceptions for reimbursed expenses and extraneous benefits. Not opened (the Federal Courts Reports collection holds only a digest, and the decision is not in the Court’s own collection); cited as characterised in Guay, 2005 FCA 97, para. 3, Dunlap, para. 9, and Martin, 2024 TCC 153, paras. 62 to 64.
M.N.R. v. Phillips, [1994] 2 F.C. 680 (C.A.). A $10,000 payment by CN to a carman who moved from Moncton to Winnipeg and bought a dearer house was a taxable benefit. An economic advantage from the employer is a benefit unless the employee shows it was received in his or her capacity as a person; the payment was conditional on continued employment, so it was received as an employee; and the Ransom rule for actual losses on sale does not extend to the higher cost of a replacement house, which increased the employee’s net worth (Robertson J.A., Stone J.A. concurring, Parts I, III and V; Linden J.A. concurring in the result). Section 6 aims to put employees paid in cash and those paid partly in kind on the same footing (Part V).
Canada (Attorney General) v. Hoefele, [1996] 1 F.C. 322 (C.A.). A mortgage interest subsidy paid for relocated Petro-Canada employees who traded like for like was not a benefit, because it did not increase their equity or net worth; a receipt is not a benefit where, on the whole transaction, the employee’s economic position is not improved, so long as the employer is not paying ordinary, everyday expenses. The subsidised mortgages were not loans received “because of” the employment under subsection 80.4(1), which requires a closer causal connection than paragraph 6(1)(a) (Linden J.A., MacGuigan J.A. concurring; Robertson J.A. dissenting would have applied Phillips). The reasons also apply Ransom and Huffman.
Lowe v. Canada, 96 DTC 6226 (F.C.A.) (A-172-95, 13 March 1996). No benefit where the employer was the primary beneficiary of a trip and personal enjoyment was incidental. Not opened (the Federal Courts Reports collection holds only a digest, and the decision is not in the Court’s own collection); cited as characterised in Schroter, paras. 23 and 42, Rachfalowski, paras. 15 to 16, and Adler, para. 78.
Huffman v. Canada (1990), 90 DTC 6405 (F.C.A.). Reimbursing duty-driven clothing costs of a plainclothes officer was not a benefit, the taxpayer being “simply … restored to the economic situation he was in before his employer ordered him to incur the expenses”. Not opened; cited as characterised in Smith, para. 45, and as quoted in Hoefele (Linden J.A.).
Cutmore v. M.N.R., [1986] 1 C.T.C. 2230, 86 DTC 1146 (T.C.C.). Employer-paid tax return preparation was a benefit. Not opened; cited as characterised in Smith, para. 37, and applied in Phillips.
Guay v. Canada, [1997] F.C.J. No. 470 (C.A.). Reimbursed tuition imposed by a rotational foreign-service posting was not a benefit.
Dionne v. Canada, F.C.A., A-48-97, 27 October 1998. Reimbursed northern food transport was a benefit; the 1997 Guay exception confined to its facts (paras. 3 to 4).
Dunlap v. The Queen, 98 DTC 2053 (T.C.C.). A Christmas party and hotel room were taxable; the absence of an increase in net worth was irrelevant (paras. 7 to 10 and 17).
Desrosiers v. Canada (1999), 240 N.R. 169 (F.C.A.). A $65,000 housing payment was a benefit measured when conferred (paras. 9 to 11).
McGoldrick v. Canada, 2004 FCA 189. Casino shift meals were a benefit; the Lowe primary-benefit rule was not satisfied (para. 9).
Guay v. Canada (Attorney General), 2005 FCA 97. Reimbursed tuition for an employee on unpaid leave was taxable (paras. 2 to 6).
Adler v. The Queen, 2007 TCC 272. Telus parking test case: a benefit for fourteen employees, not for two who needed their cars for work (paras. 75 to 76 and 98 to 110); no apportionment (para. 157).
Rachfalowski v. The Queen, 2008 TCC 258. A golf membership pressed on a non-golfer was not a benefit (paras. 24 to 25).
Canada v. Bartley, 2008 FCA 390. Employer scholarships for employees’ children were not benefits to the employees (paras. 8 to 13).
Smith v. Canada, 2019 FCA 173. An airport parking pass was a benefit; commuting is personal unless tied to the duties (paras. 5 to 6, 41 to 47 and 51).
Xia v. Canada, 2020 FCA 35. Tips from patrons’ gambling winnings were employment income (paras. 2 to 6); gross negligence penalties upheld (para. 7).
Christensen v. The Queen, 2012 TCC 42. Unrepaid employer payments toward a condominium were a benefit (paras. 3 and 8).
Canada (Attorney General) v. Henley, 2007 FCA 370. Warrants were a benefit in the year allocated (paras. 15 to 25).

Paragraph 6(1)(a): valuation

Detchon v. Canada, [1996] 1 C.T.C. 2475 (T.C.C.). Tuition discounts valued at the school’s cost. Not opened; cited as characterised in Canada v. Spence, 2011 FCA 200, para. 2.
Schroter v. Canada, 2010 FCA 98. Parking valued at fair market value, not “cost saved” (paras. 34 and 44 to 48).
Canada v. Spence, 2011 FCA 200. Tuition discounts valued at the public fee, reversing a Tax Court decision that followed Detchon (paras. 10 and 15 to 22).
Anthony v. Canada, 2011 FCA 336. Market value of campus parking fixed by the local market (paras. 3 to 8).

Paragraph 6(1)(b): allowances

Canada (Attorney General) v. MacDonald, [1994] 2 C.T.C. 48, 94 DTC 6262 (F.C.A.) (A-1523-92, 23 March 1994), cited elsewhere as [1994] F.C.J. No. 378. The three-part allowance test, applied to a monthly housing subsidy paid to an RCMP member transferred to Toronto. Not opened (the Federal Courts Reports collection holds only a digest); cited as characterised in Hamilton, paras. 7 and 16, and Bériault v. Canada, 2003 FCA 430, paras. 3 to 7. The test restates Ransom v. M.N.R., [1968] 1 Ex. C.R. 293, where an allowance was distinguished from a reimbursement as an arbitrary amount paid without obligation to account (at 309 to 310).
Ville de Beauport v. Canada (Minister of National Revenue), 2001 FCA 198. An estimate-based per-kilometre allowance was deemed unreasonable (paras. 16 to 18 and 21).
Daniels v. Canada (Attorney General), 2004 FCA 125. A councillor’s home-to-meeting travel allowance was taxable (paras. 6 to 8).
Canada (National Revenue) v. Al Saunders Contracting & Consulting Inc., 2020 FCA 89. An unreasonable allowance is included in full (paras. 21 to 36).
Hamilton v. The Queen, 2020 TCC 23. Remote-site meal allowances reasonable; mileage from a pick-up point taxable (paras. 10 to 26).
Bykov v. The King, 2024 TCC 36, affirmed 2025 FCA 103. Reasonableness a question of fact; interaction with paragraph 8(1)(h.1) (paras. 55 to 69).

Automobile benefits

Canada v. Adams, [1998] 3 F.C. 365 (C.A.). Car-dealership salespeople who leased demonstrators from their employer, subject to keeping them on the lot during business hours for sale, were liable to the standby charge. “Made available” means at the employee’s disposal with a right of use; neither unrestricted nor actual use is required, the 1982 amendment having removed the former reference to personal use; subsection 6(2) deems personal use, tempered only by the minimal-personal-use reduction; and a lease tied to the employment, rather than on the terms offered to arm’s length customers, does not displace the formula however fair its price (Robertson J.A., Strayer and Décary JJ.A. concurring).
Servais v. The Queen, 2003 FCA 329. Subsection 15(5) imports the standby-charge formula; no formula for non-automobiles (paras. 7 to 11).
Gill v. The Queen, 2005 TCC 244. Charge prorated to days available (paras. 7 and 10 to 16).
Burton v. Canada, 2006 FCA 67. Reimbursed automobile expenses fall under paragraph 6(1)(l) (paras. 8 to 9 and 19 to 21).

Wage-loss and disability plans

Tsiaprailis v. Canada, 2005 SCC 8. Settlement replacing arrears of periodic benefits taxable (paras. 15 to 16).
Canada v. Siftar, 2003 FCA 137. The arrears component is a question of fact (paras. 4 to 5).
Price v. Canada, 2012 FCA 332. Employer-funded pilots’ disability benefits taxable (paras. 11 and 27 to 31).
Brine v. The Queen, 2006 TCC 458. An employee-pay-all plan; benefits not taxable (paras. 3 to 9).

Subsection 6(3)

Curran v. M.N.R., [1959] S.C.R. 850. A third party’s inducement payment was not employment income. Not opened (the Supreme Court’s site does not hold decisions before 1970); cited as characterised in Schwartz, para. 51.
Schwartz v. Canada, [1996] 1 S.C.R. 254. Employment begins when the employee is obliged to provide services (paras. 57 to 58).
Buccini v. Canada, F.C.A., A-611-98, 20 November 2000. A payment for cancelled stock options fell outside subsection 6(3).
Morrissette v. The Queen, 2006 TCC 284. Severance-type payment within subsection 6(3); no allocation to an unpriced covenant (paras. 16 to 17 and 27 to 28).
Bouchard v. The Queen, 2008 TCC 462. Client-transition payments were remuneration (paras. 22 and 38 to 42).
Nonis v. The Queen, 2021 TCC 31. Subsection 6(3) a rebuttable deeming rule with the burden on the taxpayer (para. 20).

Loans, forgiveness and housing

Merchant v. The Queen, 2009 TCC 31. Disguised compensation was not a loan (paras. 13 to 28).
Rémillard v. The Queen, 2011 TCC 327. Forgiven $5 million loan taxable; subsection 6(15.1) an assumption (paras. 40 to 69).
Matte v. The King, 2025 TCC 16. Settled forgivable notes taxable under subsection 6(15) (paras. 56 to 80).
Thomas v. Canada, 2007 FCA 57. No eligible relocation, so no housing-loss relief (paras. 6 to 13).

Plans and deferral

McNeeley v. Canada, 2021 FCA 218. An employee benefit plan taxed under paragraph 6(1)(g) at fair market value (paras. 22 to 50).
Martin v. The King, 2024 TCC 153. RCA contributions and the subparagraph 6(1)(a)(ii) exclusion for non-residents (paras. 101 to 117).
Allan A. Greber Professional Corporation v. M.N.R., 2007 TCC 78. EPSP allocations were not employer remuneration for CPP purposes (paras. 67 to 77).

Subsection 6(6)

Bourget v. The Queen, 2009 TCC 533. An accountant working at his employer’s head office about 150 kilometres from a dam construction site was not at a special work site: “special work site” and “chantier particulier” restrict the exemption and do not mean any place of work (paras. 19 to 22 and note 3); the leasing ceiling in subsection 7307(3) of the Regulations does not apply in computing the standby charge, which was recalculated on the actual rent and cost (paras. 24 to 30).
Spannier v. The Queen, 2013 TCC 40. Exclusion applied; “maintained” means kept available (paras. 24 to 48).
Rio v. The Queen, 2015 TCC 286. Permanent duties and a rented-out home defeated the exclusion (paras. 21 to 24).
Gessner v. The King, 2023 TCC 87. Continuing duties not temporary; no receipts (paras. 25 to 38 and 54 to 55).

No verified decision was found on employer gifts, cell phones, wellness accounts or relocation for 2019 to 2026, or applying paragraphs 6(1)(c), (h), (i) or (j) in substance.

The CRA’s published positions, which fill much of that gap in practice, follow.

← Policy purpose and commentary CRA documents →

CRA documents

The CRA’s statement of its practice on section 6 is now Guide T4130, because the benefits folio is under review. The entries below give each document’s status and what it covers.

Guide T4130, Employers’ Guide - Taxable Benefits and Allowances, T4130(E) Rev. 25, online version modified 17 August 2026; no 2026 edition. The operative statement: primary-beneficiary test and fair market value (chapter 1); automobiles, reasonable per-kilometre allowances (chapter 2); special work sites, cell phones, counselling, gifts, group term life, housing, loans, moving and housing loss, parking (chapter 3); GST/HST (chapter 5).
Income Tax Folio S2-F3-C2, Benefits and Allowances Received from Employment. Replaced IT-470R on 7 July 2016 (table of concordance); removed from canada.ca in October 2017 at the Minister’s request so that the CRA could review its wording on employee discounts on merchandise, the revised folio still undergoing review in December 2018 (technical interpretation 2018-0782361C6); the page now carries only an “under review” notice referring to T4130. Paragraphs 2.2 to 2.3 and 2.24 are still quoted in CRA answers.
Income Tax Folio S2-F3-C1, Payments from Employer to Employee, effective 26 November 2015, replacing IT-196R2 and IT-196R2SR. Subsections 6(3) and 6(3.1) (paras. 1.4 to 1.10 and Examples).
Income Tax Folio S2-F1-C1, Health and Welfare Trusts, effective 28 July 2020; no longer updated, to be cancelled 31 December 2029; paras. 1.31 to 1.39 on subparagraph 6(1)(a)(i), paragraphs 6(1)(e.1) and (f), and subsection 6(4).
Income Tax Folio S2-F1-C2, Retiring Allowances, effective 8 November 2016. Termination payments under sections 5 and 6 distinguished from retiring allowances (para. 2.2).
Income Tax Folio S2-F1-C3, Pension Benefits, effective 21 May 2024. Unregistered pension plans as salary deferral arrangements or employee benefit plans (paras. 3.26 to 3.35).
Archived bulletins still cited: IT-63R5 (automobile benefits), IT-91R4 (special work sites), IT-421R2 (loans), IT-428 (wage loss replacement plans), IT-502 (employee benefit plans), IT-529 (flexible benefit programs), IT-522R (vehicle and travel expenses) and IT-339R2 (private health services plans). No folio exists on automobile benefits, employee benefit plans or wage loss replacement plans. Cancelled: IT-470R, IT-85R2, IT-196R2, IT-337R4, IT-499R and IT-76R2 (table of concordance). IT-227R, on group term life insurance, is not on canada.ca: it is in neither the archived bulletin index, the list of cancelled bulletins nor the table of concordance, and it survives only as a cross-reference in archived IT-502.
CRA payroll pages: automobile provided by the employer (34 cents for 2025 and 2026); allowances for the employee’s own vehicle (73 and 67 cents for 2026); gifts, awards and long-service awards; social events; parking; cell phone and internet services; moving and relocation; pensionable and insurable earnings; and prescribed interest rates (3 per cent for each quarter of 2026).
Technical interpretations and roundtable answers, read on taxinterpretations.com: 2014-0553481I7 (6 March 2015, cell phones); 2013-0501351E5 (30 December 2013, employee award); 2016-0645911E5 (24 January 2018, parking for irregular hours); 2016-0669531E5 and 2017-0716001E5 (4 June 2018, home equity compensation not an eligible housing loss); 2015-0610801C6 (24 November 2015, three-year bonus and DSU plans); 2020-0861061C6 (27 October 2020, formula-based appreciation plans); 2021-0900691E5 (13 January 2022, subsection 6(2.3)); 2017-0703881C6 (14 September 2017, EV charging station); 2017-0703871C6 (14 September 2017, health spending account); 2020-0861021C6 (27 October 2020, home office equipment); 2015-0623571I7 (26 April 2016, salary advance); and 2018-0782361C6 (4 December 2018, status of S2-F3-C2).

The regulations, forms and elections that give effect to section 6 follow.

← Relevant case law Regulations, forms, and elections →

Regulations, forms, and elections

The regulations below supply the prescribed amounts and reporting rules on which section 6 relies, followed by the forms and elections.

Income Tax Regulations, C.R.C., c. 945 (current to 21 September 2026): section 7305.1, the operating-benefit rate of 34 cents per kilometre, 31 cents for automobile salespersons (last amended SOR/2025-193); section 7306, the employer’s allowance deduction limit for paragraph 18(1)(r) of the Act, used as the CRA’s reasonableness benchmark: as consolidated (last amended SOR/2025-193) it allows 66 cents a kilometre plus 6 cents on the first 5,000 kilometres, that is 72 and 66 cents, with 4 cents more in the territories, whereas the Department of Finance announced on 14 January 2026, and the CRA applies, 73 and 67 cents (77 and 71 cents in the territories) for 2026, no amending regulation appearing in the consolidation current to 21 September 2026; section 7307, cost, interest and lease ceilings, which do not enter subsection 6(2); section 6801, the deferred salary leave plan (paragraph (a)) and deferred share unit (paragraph (d)) exceptions; sections 2700 to 2705, group term life insurance; paragraph 4301(c), the prescribed rate for section 80.4; subsection 100(1), “remuneration” for withholding; subsection 200(1) and section 205, the T4 information return and its due date, subsection 205(3) prescribing the T4 for subsection 162(7.01).
Forms and slip codes: T4 box 14 with codes 30 (board and lodging), 31 (special work site, exempt), 32 (travel in a prescribed zone), 34 (automobile), 36 (loans), 38 (security options; code 90 for 25 June 2024 to the end of 2025), 40 (other benefits) and 85 (employee-paid PHSP premiums); T4A code 119 for retirees’ group term life; Form TD4, special work site exemption; Form RC18, automobile benefit worksheet; T1 lines 10100 and 10400. Form T2200 is the employer’s certificate for section 8 deductions, not a paragraph 6(1)(b) form.
Elections and computational choices: the employee’s written notice before year-end for the half-standby-charge operating benefit (subparagraph 6(1)(k)(iv)); the employer’s option for automobile salespersons (subsection 6(2.1)); the reduced standby charge (a formula, not an election); the policyholder’s simplified group term life method (paragraph 2702(1)(a) of the Regulations); and designation of one residence per eligible relocation (subsection 6(22)).

How employers and employees meet these obligations is the subject of the next tab.

← CRA documents Compliance →

Compliance

Once a section 6 amount exists, the employer must value it, withhold on it, report it and keep records; this tab sets out those duties and the penalties.

Paragraph 153(1)(a) requires withholding from “salary, wages or other remuneration”, and because “salary or wages” in subsection 248(1) is income computed under Subdivision A, section 6 inclusions are within it. A taxable cash benefit is pensionable, insurable and subject to withholding; a non-cash or near-cash benefit is pensionable and subject to withholding but generally not insurable, except board and lodging provided with cash pay and withdrawable employer RRSP contributions (Guide T4130). Benefits go in box 14 with the specific code, and the T4 is due on or before the last day of February following the year (Regulations, subsection 205(1)). Under section 173 of the Excise Tax Act, a registrant is deemed to have collected GST/HST on benefits under paragraphs 6(1)(a), (e), (k) and (l), reported for the period including the end of February of the following year.

Records carry the valuation. Subsection 230(1) requires records sufficient to determine the amounts that should have been withheld, which reaches valuations, mileage logs, gift-card logs and TD4 forms. Failure to withhold attracts 10 per cent of the amount, 20 per cent for a repeated knowing or grossly negligent failure (subsection 227(8)); late remittance attracts 3 to 10 per cent (subsection 227(9)); a late T4 return attracts the greater of $100 and $10 to $75 a day for up to 100 days (subsection 162(7.01)), the general penalty in subsection 162(7) applying only where no other provision does. The employee’s normal reassessment period ends three years after the original notice of assessment (paragraph 152(3.1)(b)), extended for misrepresentation through neglect, carelessness or wilful default (subparagraph 152(4)(a)(i)) or by waiver.

Planning and disputes, which build on these duties, come next.

← Regulations, forms, and elections Planning and dispute notes →

Planning and dispute notes

This tab turns from the rules to their use: planning with the statutory exclusions, and how benefit disputes are framed and contested.

Planning

Statutory exclusions are more durable than administrative concessions, which do not bind a court. A private health services plan must involve insurance risk, and a health spending account for a sole shareholder-employee likely fails and may be taxed under subsection 15(1) (2017-0703871C6). Relocation should be documented as an eligible relocation before a housing loss is reimbursed. Automobile planning works with the formulas: primary employment use and documented low personal mileage reduce the standby charge, the half-standby election must be made in writing before year-end, operating costs repaid within 45 days reduce the paragraph (k) benefit, and an employee-owned car with a per-kilometre allowance avoids the standby charge if subparagraphs 6(1)(b)(x) and (xi) are respected. Deferred compensation must fit an exclusion (the three-year bonus, the paragraph 6801(a) leave plan, a paragraph 6801(d) DSU plan) or be taxed annually under subsection 6(11). Disability settlements should be allocated between arrears and other heads (Tsiaprailis). A low-interest employee loan remains advantageous at the prescribed rate, but a genuine debt must exist (Merchant, 2009 TCC 31).

Disputes

Benefit disputes turn on connection with the employment, primary beneficiary and value. On the first two Smith governs, and the evidence should show how the item relates to the duties. On value, the Minister’s position is fair market value, so disputes centre on comparables (Schroter; Spence; Anthony); where the Act supplies a formula, argument shifts to its inputs, days available, kilometres and cost, which only contemporaneous records prove. Under subsection 6(3) the burden is expressly on the taxpayer (Nonis, para. 20), and allocations in settlement agreements must be supported by evidence (Schwartz; Siftar). An individual objects by the later of one year after the filing-due date and 90 days after the notice of assessment (paragraph 165(1)(a)); an employer assessed under section 227 has 90 days (paragraph 165(1)(b)); an appeal to the Tax Court lies under subsection 169(1). Whether a benefit is pensionable or insurable is decided under the Canada Pension Plan and the Employment Insurance Act: an employer or employee may request a ruling from the CRA before 30 June of the year after the year in question (CPP subsection 26.1(2); EI Act subsection 90(2)), and a ruling may be appealed to the Minister within 90 days after notification (CPP section 27; EI Act section 91), as may an employer’s assessment for contributions or premiums (CPP section 27.1; EI Act section 92); the Minister’s decision may be appealed to the Tax Court of Canada within 90 days after it is communicated, or within a longer time the Court allows on application made within a further 90 days (CPP subsection 28(1); EI Act subsection 103(1)). Rulings may be requested through My Business Account, My Account or Form CPT1 (Guide T4130). Penalties and interest, including under subsections 227(8) and (9) and 162(7.01), may be cancelled under subsection 220(3.1) on application within ten calendar years after the year.

The provincial and treaty provisions that build on section 6 follow.

← Compliance Provincial and treaty parallels →

Provincial and treaty parallels

The provinces other than Quebec take section 6 through the federal income figure; Quebec restates it; treaties allocate taxing rights over employment income without defining benefits.

Ontario’s Taxation Act, 2007, S.O. 2007, c. 11, Sch. A, defines an individual’s “income” as “the individual’s income for the year as determined in accordance with and for the purposes of the Federal Act” (subsection 1(1)), carries federal definitions over (subsection 1(8)), and applies to taxation years ending after 2008 (section 2). Alberta’s Personal Income Tax Act, R.S.A. 2000, c. A-30, clause 1(1)(j)(iii), and British Columbia’s Income Tax Act, R.S.B.C. 1996, c. 215, subsection 1(1), likewise adopt federal income. Section 6 therefore applies in those provinces without restatement.

Quebec’s Taxation Act, CQLR c. I-3, has a parallel code: section 37 combines paragraphs 6(1)(a) and (b), covering benefits enjoyed by the individual or a non-arm’s-length person “because of, or in the course of” the office or employment and allowances; sections 37.1.1 to 37.1.4 deal with housing assistance and housing losses; section 37.2 with insolvent-insurer top-ups; sections 38 to 40.1 with exclusions and allowances; sections 41 to 41.1.2 with the standby charge and operating costs; sections 47.1 to 47.18 with employee benefit plans, employee trusts and salary deferral arrangements; and sections 487.1 and following with employee loans. Two differences matter: section 38 does not exclude employer contributions to a private health services plan or group term life insurance, which are therefore taxable in Quebec, and section 41 as consolidated still refers to an automobile made available by the employer or a related person, without the federal 2023 extension.

Under section 3 of the Income Tax Conventions Interpretation Act, R.S.C. 1985, c. I-4, a term not fully defined in a convention has its meaning under the Act, so section 6 informs what is “other remuneration” for treaty purposes. Article XV of the Canada-United States convention (Income from Employment) allocates “salaries, wages and other remuneration” derived from an employment to the state of residence unless the employment is exercised in the other state. Under paragraph 2, remuneration for employment exercised in the other state remains taxable only in the state of residence if it does not exceed $10,000 in the currency of the other state (subparagraph (a)), or if the employee is present there for not more than 183 days in any twelve-month period commencing or ending in the fiscal year concerned and the remuneration is not paid by or on behalf of a resident of that state and not borne by a permanent establishment there (subparagraph (b)). That is the text as replaced by Article 10 of the Fifth Protocol, read in Schedules I and VI to the Canada-United States Tax Convention Act, 1984, S.C. 1984, c. 20, on Justice Laws; the 1980 text spoke of “other similar remuneration” and of 183 days “in that year”. The OECD Model, Article 15, has the same structure without the $10,000 limit, and the Commentary records that member countries have generally understood “salaries, wages and other similar remuneration” to include benefits in kind received in respect of an employment, such as stock options, the use of a residence or automobile, health or life insurance coverage and club memberships, and that the source state may tax remuneration derived from employment exercised there whenever it is paid (OECD, Model Tax Convention on Income and on Capital: Condensed Version 2017, Commentary on Article 15, paras. 2.1 and 2.2).

The related provisions of the Act are listed next.

← Planning and dispute notes Annotated cross-references →

Annotated cross-references

The provisions below interact most closely with section 6; automatic cross-references are shown separately.

Section 5: salary, wages and other remuneration received; subsection 6(3) deems amounts to be remuneration for section 5.
Section 7: employee securities, displacing paragraph 6(1)(a) for rights to acquire employer securities (Henley).
Section 8: deductions, including paragraphs 8(1)(h) and (h.1), which an excluded allowance bars, and paragraph 8(1)(o), forfeited deferred amounts.
Section 15: shareholder benefits, the alternative to paragraph 6(1)(a); subsection 15(5) imports the standby charge.
Section 56: retiring allowances, death benefits and RCA receipts, outside section 6.
Section 56.4: restrictive covenants, yielding to subsection 6(3).
Section 80 and section 80.4: the forgiven amount and the loan benefit.
Section 144 and section 144.1: EPSPs and employee life and health trusts.
Section 153 and section 227: withholding and penalties.
Section 248: the definitions of automobile, motor vehicle, employee benefit plan, employee trust, salary deferral arrangement, retirement compensation arrangement, private health services plan and eligible relocation.
Excise Tax Act, section 173: GST/HST on benefits.

The sources for everything on this page are listed last.

← Provincial and treaty parallels Sources →

Sources

Every statute was read on Justice Laws or the provincial official site, every decision on the court’s own site unless marked, and every CRA document on canada.ca or, for severed letters, taxinterpretations.com.

Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), s. 6 (current to 21 September 2026), its point-in-time versions from 31 August 2004, and ss. 54, 80, 80.4, 104, 110, 144, 144.1, 145, 147, 147.5, 152, 153, 162, 165, 169, 220, 227, 230, 248, 249, 250, 251 and 255; Income Tax Regulations, ss. 100, 200, 205, 2700 to 2705, 4301, 6801, 7305.1, 7306 and 7307; Interpretation Act, ss. 35 and 37; Income Tax Application Rules, ss. 8 and 19; Income Tax Conventions Interpretation Act, ss. 2 to 5; Excise Tax Act, s. 173.
Amending Acts: archive.org scans of S.C. 1917, c. 28 (Pontifex compilation), S.C. 1919, c. 55, S.C. 1948, c. 52, R.S.C. 1952, R.S.C. 1970, S.C. 1970-71-72, S.C. 1980-81-82-83, vol. III, S.C. 1986, vol. II S.C. 1988, vol. II, S.C. 1977-78, vol. I, S.C. 1980-81-82-83, vol. II, S.C. 1985, vol. II, S.C. 1990, vol. I and S.C. 1990, vol. II; parl.ca royal-assent texts of Bills C-15 (1994), C-27 (1994), C-59 (1995), C-70 (1995), C-70 (1997), C-28 (1998) and C-72 (1999); 2002 to 2024 annual statutes on Justice Laws. R.S.C. 1927, c. 97 not examined.
Case law: Supreme Court of Canada (decisions.scc-csc.ca): Savage, Schwartz, Tsiaprailis, Nowegijick (at 39). Federal Courts Reports collection (decisions.fct-cf.gc.ca/fja-cmf): Ransom ([1968] 1 Ex. C.R. 293), Phillips, Hoefele and Adams ([1998] 3 F.C. 365). Federal Court of Appeal (decisions.fca-caf.gc.ca, or the same collection on decision.tcc-cci.gc.ca): Smith, Schroter, Spence, Anthony, McGoldrick, Guay (1997 and 2005), Bartley, Henley, Desrosiers, Dionne, Daniels, Burton, Al Saunders, Ville de Beauport, Servais, Thomas, Price, Siftar, Buccini, Xia, McNeeley, Bykov (2025 FCA 103), Bériault. Tax Court of Canada (decision.tcc-cci.gc.ca): Adler, Rachfalowski, Dunlap, Spence (2010 TCC 455), Hamilton, Bykov, Gill, Martin (2009 TCC 3), Brine, Morrissette, Bouchard, Nonis, Merchant, Christensen, Rémillard, Matte, Martin (2024 TCC 153), Gessner, Spannier, Rio, Greber, Bourget (read in the same collection on decisions.fct-cf.gc.ca). Not opened and cited only as characterised: Blanchard, Lowe and MacDonald (Federal Courts Reports digests only), Huffman, Cutmore, Detchon, Curran and Poynton.
CRA documents on canada.ca as linked under CRA documents; technical interpretations on taxinterpretations.com.
Government and commentary: Royal Commission on Taxation, Report, vol. 3 (1966); Department of Finance Legislative Proposals (Technical Amendments), July 2026, news release of 23 July 2026, news release of 14 January 2026 on automobile limits, Explanatory Notes, August 2022, April 2023 and July 2026; COVID-19 standby charge backgrounder, 21 December 2020; Report on Federal Tax Expenditures 2026, Part 2; Magee (York record); Brooks (Dalhousie record); Krishna (publisher); Li and Magee (publisher); Duff et al. (Allard). OECD, Model Tax Convention on Income and on Capital: Condensed Version 2017, Article 15 and Commentary. Pre-2002 Finance notes and ctf.ca could not be read.
Provincial and treaty texts: Ontario Taxation Act, 2007; Quebec Taxation Act; Alberta Personal Income Tax Act; British Columbia Income Tax Act; Canada-United States Tax Convention Act, 1984, Schedules I and VI; Canada-United States convention, Finance consolidated text (unofficial); Canada Pension Plan, ss. 26.1, 27, 27.1 and 28; Employment Insurance Act, ss. 90, 91, 92 and 103.

Items marked as not opened, not read or to be rechecked are listed for review in the verification record.

← Annotated cross-references

Cross-references

This section refers to

s. 5 s. 8 s. 13 s. 18 s. 19.1 s. 23 s. 80 s. 80.4 s. 99 s. 118.3 s. 124 s. 144 s. 144.1 s. 149 s. 248 s. 250

Referred to in

s. 8 s. 12 s. 15 s. 20 s. 32.1 s. 39 s. 50 s. 56 s. 60 s. 63 s. 67.1 s. 79 s. 80 s. 80.01 s. 85 s. 87 s. 110.2 s. 110.7 s. 116 s. 117.1 s. 118.4 s. 118.5 s. 122.51 s. 127 s. 139.1 s. 144.1 s. 149 s. 204.4 s. 207.8 s. 241 s. 248

Blog posts on this section

References are generated from the statutory text and list other sections of the Act only.

Citation

Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), s. 6.

Annotation: Sas Tullo, “ITA s. 6”, Pariz Tax Wiki, online: <www.pariz.ca/tax-wiki/ita/6>.

Amounts to be included as income from office or employment

Legislative history

Interpretation and application

Subsection 6(1): structure and relation to section 5

Paragraph 6(1)(a): benefits of any kind whatever

Paragraph 6(1)(b): allowances

Paragraphs 6(1)(c) and (d): directors’ fees and profit sharing allocations

Paragraphs 6(1)(e), (k) and (l) and subsections 6(2) to (2.3): automobile benefits

Paragraphs 6(1)(e.1), (f) and (f.1) and subsections 6(17) and (18): insurance and wage-loss plans

Paragraphs 6(1)(g) and (h) and subsections 6(1.2) and 6(10): employee benefit plans and employee trusts

Paragraph 6(1)(i) and subsections 6(11) to (14): salary deferral arrangements

Paragraph 6(1)(j): reimbursements and awards

Subsections 6(1.1) and 6(1.2): parking and plan receipts

Subsections 6(3) and 6(3.1): payments before, during and after employment

Subsections 6(4) and 6(5): group term life insurance

Subsection 6(6): special work sites and remote locations

Subsections 6(7) and 6(8): sales taxes and GST rebates

Subsection 6(9): employee loans

Subsection 6(10)

Subsections 6(15) and (15.1): forgiveness of employee debt

Subsection 6(16): disability-related employment benefits

Subsections 6(17) and (18)

Subsections 6(19) to (22): housing losses on relocation

Subsection 6(23): employer-provided housing subsidies

Policy purpose and commentary

Relevant case law

Paragraph 6(1)(a): what is a benefit

Paragraph 6(1)(a): valuation

Paragraph 6(1)(b): allowances

Automobile benefits

Wage-loss and disability plans

Subsection 6(3)

Loans, forgiveness and housing

Plans and deferral

Subsection 6(6)

CRA documents

Regulations, forms, and elections

Compliance

Planning and dispute notes

Planning

Disputes

Provincial and treaty parallels

Annotated cross-references

Sources