Taxable Benefit - Overtime Meals or Allowances

Date:

To: Assistant Deputy Ministers of Human Resources; Heads, Compensation; Heads, Labour Relations

This bulletin is to bring to your attention the need to report taxable benefits for overtime meals or allowances.

The Canada Revenue Agency (CRA) has provided direction to Employers concerning the taxability of meals or meal allowances in situations that are not directly related to authorized government travel.

Overtime meals or meal allowances are considered taxable in the following situations:

  1. Where the value of the meal or allowance is in excess of $17.00.
  2. Where the provision of the meal or allowance is frequent and regular, regardless of the dollar value.

CRA has defined frequent and regular as those situations where a meal or meal allowance is provided three or more times per week for a period of at least six (6) months.

Please note that it is not necessary to wait for six months to make the determination if it is known or expected in advance that a situation requiring the provision of overtime meals or meal allowances three or more times per week will persist over a period of six months or more. Please see complete details on Canada Revenue Agency website.

It will be incumbent upon the delegated manager who is responsible for authorizing the provision of the meal or meal allowance on the GC 179 Extra Duty Pay/Shiftwork Report and Authorization form (or equivalent) to determine whether the meal or allowance is taxable or not, although no discretion is allowed when the cost of the meal exceeds $17.00.

We are working with Public Works and Government Services Canada (PWGSC) to create two new entitlement codes in the Regional Pay System (RPS) for this taxable benefit. The new codes will be available in the RPS by June 30, 2011. Until then, managers should advise all potentially affected employees to submit their requests as usual. Managers will approve employee requests for payment, accumulate the requests and advise the employee that the payment will be processed when the new codes are available.

PWGSC will issue a Compensation Directive with details regarding the new codes.

Please ensure all managers within your department are provided with a copy of the attached Notice to Managers.

Marc Thibodeau
A/Senior Director
Compensation Management
Core Public Administration
Compensation and Labour Relations
Office of the Chief Human Resources Officer

Notice to all Managers - February 2011

The Canada Revenue Agency (CRA) has provided direction to Employers concerning the taxability of meals or meal allowances in situations that are not directly related to authorized government travel.

Overtime meals or meal allowances are now considered taxable in the following situations:

  1. Where the value of the meal or allowance is in excess of $17.00.
  2. In situations where the provision of the meal or allowance is frequent and regular, regardless of the dollar value.

CRA has defined frequent and regular as those situations where a meal or meal allowance is provided three or more times per week for a period of at least six (6) months.

Please note that it is not necessary to wait for six months to make the determination if it is known or expected in advance that a situation requiring the provision of overtime meals or meal allowances three or more times per week will persist over a period of six months or more.

See complete details on Canada Revenue Agency website.

It will be incumbent on the delegated manager who is responsible for authorizing the provision of the meal or meal allowance, on the GC 179 Extra Duty Pay/Shiftwork Report and Authorization form (or equivalent), to determine whether the meal or allowance is taxable or not, although no discretion is allowed when the cost of the meal exceeds $17.00.

Public Works and Government Services Canada (PWGSC) is working on creating two new entitlement codes in the Regional Pay System (RPS) for this taxable benefit. The new codes will be available in the RPS by June 30, 2011. Until then, managers should advise all potentially affected employees to submit their requests as usual. Managers will approve employee requests for payment, accumulate the requests and advise the employee that the payment will be processed when the new codes are available.

PWGSC will issue a Compensation Directive (CD) with details regarding the codes.

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