Examples - Housing loss
In March 2019, you compensated Clara, your employee, for a $40,000 loss she incurred on the sale of her house. The loss was an eligible housing loss. Clara started to work at her new workplace in June 2019.
The taxable benefit you will report on Clara's 2019 T4 slip will be $12,500, calculated as follows:
1/2 × ($40,000 − $15,000)
In June 2018, you agreed to compensate Paul, your employee, for any eligible housing loss that he incurred on the sale of his house. Paul started to work at his new work location on December 1, 2018.
Paul's eligible housing loss amounted to $65,000. You paid out the compensation in two payments: $30,000 in September 2018 and $35,000 in February 2019.
Paul's taxable benefit in 2018 was $7,500 (half of the amount paid in 2018 that is more than $15,000).
Paul's taxable benefit in 2019 is $17,500. This is calculated as follows:
- half of the total amounts paid in 2018 and 2019 that is more than $15,000
(1/2 × [$65,000 − $15,000] = $25,000)
- the amount included in income in 2018 ($7,500)
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