The following questions were fielded by Carswell’s payroll hotline service. Answers are provided courtesy of The Canadian Payroll Manual and The Canadian Payroll Manager newsletter, published by Carswell.
Question: Our company plans to set up a program to provide employees with personal computers, relevant software and Internet access in order to help them develop computer skills in the workplace. Would this program be a taxable benefit to the employees?
Answer: To know for certain whether or not a program to provide employees with computers to develop computer skills would be a taxable benefit, employers should request an advance income tax ruling from CCRA. (For more information on these rulings, see the question below.)
In a recently released CCRA View (#2001-0090497), the agency noted the programs it deemed to be non-taxable were provided as training vehicles, the employer was the primary beneficiary of the training and the employer did not provide the computers and related software as a form of remuneration. The programs had the following elements in common:
•The employers felt it was critical for future success that all employees become computer literate as soon as possible.
•The employers felt the most efficient and effective way to develop employees’ computer and Internet skills was to provide them with computers for use in their homes.
•The programs were available to all employees.
•The employers leased or purchased the computers, and had them delivered directly to the employees.
•The employees could not transfer or sell the computer for a set period of time.
•Employees who chose not to participate in the programs were not entitled to any compensation in lieu of their participation.
•The programs were initiated by the employers and were not part of any collective bargaining process.
Question: What is an advance income tax ruling and how do I apply for one?
Answer: An advance income tax ruling is a written statement by the income tax rulings directorate of the CCRA to a taxpayer setting out how the agency will interpret and apply the specific provisions of the Income Tax Act to proposed “transactions” being considered.
Generally speaking, a ruling is binding on the CCRA, although there are circumstances where the agency can overturn or change a ruling. The agency charges a fee for the rulings. For more information, refer to the CCRA’s income tax information circular 70-6R4 (January 29, 2001), Advanced Income Tax Rulings.
Send requests for Advance Income Tax Rulings to:
Income Tax Rulings Directorate
Policy and Legislation Branch
Canada Customs and Revenue Agency
16th floor, Tower A
Place de Ville
320 Queen Street
Ottawa, ON K1A 0L5
Fax: (613) 957-2088.
Question: Does the term “week” have the same meaning in employment and labour standards across the country? We have employees in a number of Canadian jurisdictions and want to ensure we are meeting the standards for each jurisdiction while not over-complicating our payroll and human resources policies.
Answer: Employment and labour standards legislation in some jurisdictions define “week” in very specific terms, with some acts differentiating between a “week” and a “work week” as the following summary shows:
•Canada Labour Code: Week refers to the period between midnight on Saturday and midnight on the Saturday that follows.
•Alberta: Week refers to seven consecutive days. “Work week” is defined as the period between midnight on a Saturday and midnight on the Saturday that follows, or seven consecutive days as established by the consistent practice of an employer.
•British Columbia: Week refers to a period of seven consecutive days starting for overtime purposes on Sunday, and for any other purpose on any day.
•Manitoba: Week refers to seven consecutive days.
•New Brunswick: The term week is not defined in the legislation.
•Newfoundland and Labrador: Week is a period of seven continuous days an employer designates.
•Northwest Territories and Nunavut: Week refers to a period of seven consecutive days.
•Nova Scotia: The term week is not defined in the legislation.
•Ontario: Work week refers to a recurring period of seven consecutive days the employer determines for scheduling work, or, if the employer has not done this, a recurring period of seven consecutive days beginning on Sunday and ending on Saturday.
•Prince Edward Island: Week refers to a period of seven consecutive days. A work week refers to a “week of work established by the practice of the employer or determined by an inspector.”
•Quebec: Week refers to a period of seven consecutive days “from midnight at the beginning of a particular day to midnight at the end of the seventh day.”
•Saskatchewan: Week is defined as the period between midnight on a Saturday and midnight on the immediately following Saturday.
•Yukon: Week refers to a period of seven consecutive days “established by the employer’s payroll records or determined by an employment standards officer.”
For more information on Carswell’s payroll products, visit www.carswell.com or call (800) 387-5164.
Question: Our company plans to set up a program to provide employees with personal computers, relevant software and Internet access in order to help them develop computer skills in the workplace. Would this program be a taxable benefit to the employees?
Answer: To know for certain whether or not a program to provide employees with computers to develop computer skills would be a taxable benefit, employers should request an advance income tax ruling from CCRA. (For more information on these rulings, see the question below.)
In a recently released CCRA View (#2001-0090497), the agency noted the programs it deemed to be non-taxable were provided as training vehicles, the employer was the primary beneficiary of the training and the employer did not provide the computers and related software as a form of remuneration. The programs had the following elements in common:
•The employers felt it was critical for future success that all employees become computer literate as soon as possible.
•The employers felt the most efficient and effective way to develop employees’ computer and Internet skills was to provide them with computers for use in their homes.
•The programs were available to all employees.
•The employers leased or purchased the computers, and had them delivered directly to the employees.
•The employees could not transfer or sell the computer for a set period of time.
•Employees who chose not to participate in the programs were not entitled to any compensation in lieu of their participation.
•The programs were initiated by the employers and were not part of any collective bargaining process.
Question: What is an advance income tax ruling and how do I apply for one?
Answer: An advance income tax ruling is a written statement by the income tax rulings directorate of the CCRA to a taxpayer setting out how the agency will interpret and apply the specific provisions of the Income Tax Act to proposed “transactions” being considered.
Generally speaking, a ruling is binding on the CCRA, although there are circumstances where the agency can overturn or change a ruling. The agency charges a fee for the rulings. For more information, refer to the CCRA’s income tax information circular 70-6R4 (January 29, 2001), Advanced Income Tax Rulings.
Send requests for Advance Income Tax Rulings to:
Income Tax Rulings Directorate
Policy and Legislation Branch
Canada Customs and Revenue Agency
16th floor, Tower A
Place de Ville
320 Queen Street
Ottawa, ON K1A 0L5
Fax: (613) 957-2088.
Question: Does the term “week” have the same meaning in employment and labour standards across the country? We have employees in a number of Canadian jurisdictions and want to ensure we are meeting the standards for each jurisdiction while not over-complicating our payroll and human resources policies.
Answer: Employment and labour standards legislation in some jurisdictions define “week” in very specific terms, with some acts differentiating between a “week” and a “work week” as the following summary shows:
•Canada Labour Code: Week refers to the period between midnight on Saturday and midnight on the Saturday that follows.
•Alberta: Week refers to seven consecutive days. “Work week” is defined as the period between midnight on a Saturday and midnight on the Saturday that follows, or seven consecutive days as established by the consistent practice of an employer.
•British Columbia: Week refers to a period of seven consecutive days starting for overtime purposes on Sunday, and for any other purpose on any day.
•Manitoba: Week refers to seven consecutive days.
•New Brunswick: The term week is not defined in the legislation.
•Newfoundland and Labrador: Week is a period of seven continuous days an employer designates.
•Northwest Territories and Nunavut: Week refers to a period of seven consecutive days.
•Nova Scotia: The term week is not defined in the legislation.
•Ontario: Work week refers to a recurring period of seven consecutive days the employer determines for scheduling work, or, if the employer has not done this, a recurring period of seven consecutive days beginning on Sunday and ending on Saturday.
•Prince Edward Island: Week refers to a period of seven consecutive days. A work week refers to a “week of work established by the practice of the employer or determined by an inspector.”
•Quebec: Week refers to a period of seven consecutive days “from midnight at the beginning of a particular day to midnight at the end of the seventh day.”
•Saskatchewan: Week is defined as the period between midnight on a Saturday and midnight on the immediately following Saturday.
•Yukon: Week refers to a period of seven consecutive days “established by the employer’s payroll records or determined by an employment standards officer.”
For more information on Carswell’s payroll products, visit www.carswell.com or call (800) 387-5164.
