Overtime meals or allowances
If you provide overtime meals, or an allowance for overtime meals, there is no taxable benefit if all of the following conditions apply:
- The allowance, or the cost of the meal, is reasonable. The CRA generally considers a value of up to $23 (including the GST/HST and PST) to be reasonable. The CRA will consider higher amounts reasonable if the relative cost of meals in that location is higher, or under other significant extenuating circumstances
- The employee works two or more hours of overtime right before or right after their scheduled hours of work
- The overtime is not frequent and is occasional in nature (usually less than three times a week)
If overtime occurs frequently or becomes the norm, the CRA considers the overtime meals or allowances to be a taxable benefit, since they start to take on the characteristics of additional remuneration.
Include any GST/HST and PST that applies to the value of this benefit.
For examples of situations where overtime meals, or allowances for overtime meals, are considered taxable benefits, go to Examples – Overtime meals or allowances.
If the benefit is taxable, it is also pensionable. Deduct income tax and CPP contributions.
If the taxable benefit is paid in cash, it is insurable. Deduct EI premiums. If it is a non-cash benefit, it is not insurable. Do not deduct EI premiums.
Reporting the benefit
Include the taxable benefit in box 14 "Employment income," and in the "Other information" area under code 40 at the bottom of the employee's T4 slip. For more information, see T4 – Information for employers.
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