What allowances do most employers offer in Canada?
It is not mandatory for employers to offer specific allowances in Canada. However, as more people work from home, certain allowances may become more common. We offer several options in anticipation of this demand.
- Work-From-Home Allowance. See the question below for more details.
- Internet Allowance. We can facilitate a standalone internet allowance which is a taxable benefit. A recommended amount is between CA$50 and CA$100 per month. See this government resource for more information on internet and cell phone allowances.
- Cell phone allowance. We can also offer a cell phone allowance if you expect your supported employees to use their personal cell phones for work. This is a taxable benefit. Many employers offer between CA$50 and CA$100 per month for this allowance.
- Gym or wellness allowance. Velocity Global can offer gym or wellness allowances and reimbursements to your supported employees. These allowances are taxable benefits because your supported employee is the sole beneficiary.
What should my company offer as a work-from-home (WFH) allowance in Canada?
A WFH allowance is a taxable benefit in Canada. A typical amount ranges from CA$50 to CA$150 per month, but this is at your discretion.
What considerations are there around meal allowances and reimbursements?
Typically, if an expense has no ties to work and your supported employee is the sole beneficiary then it needs to be taxed accordingly. Any reimbursement for expenses that have no direct ties to work and for which the employee is the sole beneficiary will attract tax consequences. This resource indicates the types of benefits and allowances for which we are required to pay Canada Pension Plan (CPP) and Employment Insurance (EI) remittances.
The Canada Revenue Agency (CRA) also sets the conditions for when or when not an overtime meal or allowance (sometimes called a per diem) is taxable, and what limits may apply. Find out details here.
Meal reimbursements can be a fixed amount. If your supported employee submits reimbursement requests through Expensify, they must manually submit the fixed amount. Meal allowances can also be provided as a lump sum, which will be taxed accordingly.
Rules around taxable benefits and allowances in Canada can be complex. Please review this guide for more details.