In a June 10, 2016 French Technical Interpretation, CRA commented on whether an employer had conferred a benefit to an
employee where the employee was reimbursed for their meal expenses.
Generally, an employee must include the value of any benefits received or enjoyed in their taxable income. CRA normally
considers a taxable benefit to be conferred when:
- the benefit provides an economic advantage to the employee;
- the benefit is measurable and quantifiable; and
- it mainly benefits the employee (or a non-arms length person) and not the employer.
If the meal is reimbursed while the employee is travelling within the municipality or metropolitan area of the
establishment of the employer, the employee is generally considered the primary beneficiary. However, in certain cases, the
reimbursement can be excluded from the employee’s income. For example, if the main purpose of the reimbursement is to ensure that the
employee’s functions are carried out more effectively as part of a shift, then the employer could be the one who mainly benefits.
Meal reimbursements when the employee travels outside the municipality of the employer in the performance of their duties
is generally considered to primarily benefit the employer.
The fact that the employer charges the client for the reimbursement is not a factor in this determination.
Action Item: Consider the tax ramifications when developing and implementing a meal reimbursement policy.