Canada Revenue Agency
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Examples for 2010 and later years
Example 1
In 2010, Jeffrey's employer gave him the following 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. |
| Innovation and Excellence Award (tickets to a sporting event) | $250 | An award under the policy: see Calculation. |
| Holiday season gift (watch) | $150 | A gift under the policy: see Calculation. |
| Total | $1,465 | Taxable amount: $675 |
Calculation
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 2010, Ahmed's employer has given him the following 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. |
| An award (a watch) for 3 years 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. |
| A birthday gift (concert tickets) | $175 | An award under the policy: see Calculation. |
| Total | $1,201 | Taxable amount: $450 |
Calculation
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.
