Disability-related employment benefits

If you provide benefits or allowances to an employee who has a disability, such as transportation costs or attendant services, the benefit may not be taxable.

Reasonable transportation costs between an employee's home and work location (including parking near that location) are not taxable if you pay them to or for an employee to whom either of the following applies:

  • Is blind. For more information, see Guide RC4064, Disability-Related Information.
  • Has a severe and prolonged mobility impairment, which markedly restricts the individual's ability to perform a basic activity of daily living - generally, someone who is eligible to claim the disability tax credit

These transportation costs can include an allowance for taxis or specially designed public transit and parking that you provide or subsidize for these employees.

You may have employees with severe and prolonged mental or physical impairments. If you provide reasonable benefits for attendants to help these employees perform their duties of employment, these benefits are not taxable to the employee. The benefits can include readers for persons who are blind, signers for persons who are deaf, and coaches for persons who are intellectually impaired.

Include any GST/HST that applies in the value of this benefit.

Payroll deductions

If you exclude a disability related employment benefit from income, it is not a taxable benefit. Do not deduct CPP contributions, EI premiums, or income tax.

Reporting the benefit

Report the taxable benefit in box 14 "Employment income" and in the "Other information" area under code 40 at the bottom of the T4 slip. For more information, see T4 – Information for employers.

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