Examples for 2010 and later years

Example #1

In 2015, Jeffrey's employer gave him the following gifts and awards.

Table 1 Taxability of gifts and awards

Gifts and Awards Value Taxable?
T-shirt with employer logo $15 (cost) No  non-cash item of nominal value, further reduced by the company logo.
Birthday gift (gift certificate) $75 Yes  a gift certificate is near cash, and therefore is not included under the gifts and awards policy.
Reward for meeting sales performance target (weekend holiday) $400 Yes  meeting a performance target does not fall under the definition of an award; therefore it does not fall under the gifts and awards policy. We consider it to be additional remuneration.
10 year anniversary award (art print); the last anniversary award was received 5 years previously. $275 No  the art print is eligible under the long service/anniversary award, and Jeffrey has not received such an award in the 5 previous years.
Wedding gift (crystal vase) $300 A gift under the policy: see Calculation for example 1.
Innovation and Excellence Award (tickets to a sporting event) $250 An award under the policy: see Calculation for example 1.
Holiday season gift (watch) $150 A gift under the policy: see Calculation for example 1.
Total $1,465 Taxable amount: $675

Calculation for example 1

The gifts and awards that fall within the policy - the wedding gift, Innovation and Excellence award, and holiday season gift - have a total value of $300 + $250 + $150 = $700. Jeffrey's taxable benefit under the policy will be $200 ($700 − $500).

As well, both the value of the birthday gift ($75) and the reward for meeting the sales target ($400) have to be included in Jeffrey's income.

Note that the $225 "shortfall" in the long service award category cannot be used to eliminate the $200 under the policy that has to be included in Jeffrey's income.

Example #2

In 2015, Ahmed's employer has given him the following gifts and awards.

Table 2 –Taxability of gifts and awards

Gifts and Awards Value Taxable?
Coffee mug $8 (cost) No  non-cash item of nominal value.
Social Committee 50/50 draw - Employer does not fund or control the social committee. $243 No  the gifts and awards policy applies to employer/employee relationships.
Gift recognizing birth of first child (gift card) $150 Yes  a gift certificate is near cash, and always taxable.
Holiday gift (voucher for a turkey) $50 A gift under the policy: see Calculation for example 2.
An award (a watch) for 3 year's service $200 Yes  since Ahmed has worked for the company for less than 5 years, this long service award does not meet the parameters of the policy and is taxable.
Award in recognition of running the company charity drive. $375 An award under the policy: see Calculation for example 2.
A birthday gift (concert tickets) $175 An award under the policy: see Calculation for example 2.
Total $1,201 Taxable amount: $450

Calculation for example 2

The gifts and awards that fall within the policy - the recognition award, the birthday gift, and the holiday gift - have a total value of $375 + $175 + $50 = $600. Ahmed's taxable benefit under the policy is $100 ($600 − $500).

As well, the value of both the gift for the birth of his child ($150) and the award for 3 years service ($200) have to be included in his income.

Date modified: