Tax Savings For Employees

1. Consider reducing your source withholdings on your paycheque. An application to CRA can be made to allow the employer to reduce your withholdings under certain circumstances. The most common is where the employee wants to make monthly RRSP contributions but cannot afford to

2. If you have access to an employer provided automobile a taxable benefit may be charged to your T4. Consider reducing your personal use of the vehicle or better yet arrange to use your personally owned vehicle instead. If the employer agrees to let you use your own vehicle, the employer can pay a reasonable allowance to the employee which is deductible to the employer and tax free to the employee.

3. If the employer is paying you a retiring allowance, consider having some/all transferred into a RRSP. If not transferred into the RRSP, the full amount is taxable when received. The amount that can be transferred is $2,000 for each calendar year of service before 1996 plus an additional $1,500 for each year (or part year) before 1989 for which employer contributions to your pension plan have not vested. Click HERE for more.

4. If the employer is paying a death benefit to a surviving employee's spouse or children (if there is no surviving spouse) then the first $10,000 is tax free.

5. If your employer requires you to incur expenses in the performance of your employment duties, for example using your vehicle in the performance of your employment duties, you are allowed to deduct these expenses from your income. To the extent that the expenses included GST, a rebate of the GST paid can be claimed.

Careful planning with a Chartered Accountant is warranted. Contact Keith Anderson CA at (780) 447-5830 if you need advice. 

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