Examples – Overtime meals or allowances
Example 1 – Meal is a taxable benefit
Joanne is a manager in the call centre of a large telephone company. The company is introducing a new product and expects an increase in enquiries from consumers over the next 6 months. During this time, Joanne will be working 2 hours of overtime, in addition to her regular hours of work, at least 3 times a week. Joanne's employer will provide her with a meal on each of these evenings.
In this situation, there is a taxable benefit to Joanne. The CRA views the overtime as frequent and regular. As a result, the fair market value of the meals will have to be included in Joanne's income.
Example 2 – Meal is a taxable benefit
Phillip works in the shipping department of a mail order company. The last two weeks in each month, a predicted increase in orders causes him to work two nights of overtime at the end of his regularly scheduled hours. Phillip's employer provides him with a meal allowance on those evenings.
In this situation, there is no taxable benefit to Phillip. The CRA views the overtime as infrequent and occasional because it is less than three times in those weeks.
Example 3 – Meal allowance is not a taxable benefit
Robert is working on a very large project. In order to meet the deadline, he must work 3 hours of overtime, in addition to his normal work hours, every Tuesday, Wednesday and Thursday evening for the next 6 weeks. Robert will receive a reasonable meal allowance on those evenings.
In this situation, there is no taxable benefit to Robert. Although the overtime occurs more than twice each week, we view it as infrequent and occasional. It does not happen on a regular basis for an extended period of time, and there is no foreseeable overtime for Robert in the future once this project deadline has been met.
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