Awards from a manufacturer or promotional items

Awards from a manufacturer

If a manufacturer of goods gives cash awards or non-cash awards to the dealer of the goods, the manufacturer does not have to report the awards on an information slip.

However, if the dealer passes on cash awards to an employee, the dealer has to report the cash payment in box 14 "Employment income," and in the "Other information" area under code 40 at the bottom of the employee's T4 slip. If the dealer passes on non-cash awards to an employee, the dealer may not have to report the awards in the employee's income if the other conditions of the awards policy are met.

If a manufacturer gives a cash award or a non-cash award directly to the employee of a dealer or other sales organization, the manufacturer has to report the value of the award as a benefit using code 154, "Cash award or prize from payer," in the "Other information" area at the bottom of the T4A slip. This only applies if the value of the award is more than $500.

For more information, see Completing and filing information returns.

Promotional items

If an employee receives promotional items, there may be a taxable benefit. Whether or not the benefit is taxable depends on who the primary beneficiary is.

When the employer is the primary beneficiary, for example the employee receives a t-shirt to wear during a sales promotion or at a trade-show, we do not consider this to be a taxable benefit to the employee.

When the employee is the primary beneficiary, for example, employees of an electronics manufacturer are given a new item in advance of the launch, we consider this to be a benefit to the employee.

If the benefit is taxable, the value of the benefit must be included in the employee's income.