Moving allowance - Non-accountable allowances

A non-accountable allowance is an allowance for which an employee does not have to provide details or submit receipts to justify amounts paid. We consider a non-accountable allowance for incidental relocation or moving expenses of $650 or less to be a reimbursement of expenses that the employee incurred because of an employment-related move. Therefore, this type of allowance is not taxable. For us to consider it as a reimbursement for incidental expenses, the employee has to certify in writing that he or she incurred expenses for at least the amount of the allowance, up to a maximum of $650.

Do not report the amount of the reimbursement. Report any part of the non-accountable allowance that is more than $650 in box 14, “Employment income,” and in the “Other information” area under code 40 at the bottom of the employee’s T4 slip.

Examples

If you gave a non-accountable allowance of $625 to an employee who certifies that he or she incurred expenses for the amount of the allowance, the employee will not be taxed on the amount received. Do not include this amount on the employee's T4 slip.

If you gave a non-accountable allowance of $750 to an employee who can certify the expenses, he or she will be taxed on $100 only, which is the part of the amount that is more than $650. Include the $100 on a T4 slip in box 14, "Employment income," and in the "Other information" area under code 40 at the bottom of the employee's T4 slip.

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