Quebec's New Gift and Awards Policy
By Yosie Saint-Cyr LL.B., Editor at HRinfodesk---Canadian Payroll and Employment Law News, February 2002
As of the 2001 taxation year, an employer is not required to include in the employee's income an amount representing the value of:
- Gifts received from the employer on special occasions, such as Christmas, a birthday or a marriage, to a maximum of $500 a year;
- Rewards received from the employer in recognition of specific achievements such as a certain number of years of service, success in meeting or exceeding safety requirements or in achieving goals, to a maximum of $500 a year.
For example, if an employer gives an employee a gift with a value of $800, the employee will have $300 added to his or her income for the year ($800-$500 (exemption)=$300). This exemption does not apply to gifts and rewards that are in cash or that can be easily converted into cash, or to personal insurance premiums paid by the employer.
The new policy applies to gift certificates and smart cards if they can only be used to purchase goods or services from one or more identified merchants and are not easily converted into cash.
The cost of gifts and rewards covered by the exemption may be deducted in its entirety in the calculation of the employer's income, provided this cost is reasonable under the circumstances.