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Parking Benefits
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Did You Know


That employer provided parking may be a taxable benefit to employees?


The Income Tax Act specifies that there is to be included in income of a taxpayer the value of board, lodging and other benefits of any kind whatsoever, received or enjoyed by the taxpayer by virtue of an office or employment. This definition in the Act is broad but not very clear in certain circumstances.


CRA considers parking made available to an employee to be a taxable benefit based on the fair value of the space less any amounts paid by the employee when the space is a specific parking space made available to the employee. However, when the parking lot is made available to both employees and non-employees such that a fair value cannot be determined, CRA considers a taxable benefit to not arise.


The courts have made some rulings in this regard as well. In one case, an employer provided a reserved parking space to an employee. The employee used it infrequently, but when he did it was for business purposes. The courts determined that the full fair value is a taxable benefit to the employee.


CRA has put forth some guidelines. However, those guidelines are only situation specific examples and CRA may not abide by them in slightly different situations. These guidelines are as follows:

  1. Where parking spots are based on a first-come first-served basis to employees and there are less parking spots than employees, then CRA may not consider this to be a taxable benefit.

  2. where the vehicle is regularly required to be used during business hours for business purposes by the employee to perform their employment duties, then CRA again may not apply the taxable benefit rules for employer provided parking.


Employee benefits are a complicated area and a Chartered Professional Accountant should be consulted if there are any doubts. Contact Keith Anderson, BCom, CPA, CA-IT, CITP at (780) 447-5830 if you need advice. 



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Keith Anderson, BCom, CPA, CA-IT, CITP Copyright September 9, 1999 Last Modified :07/16/18 04:17 PM