Subsidized meals

If you provide subsidized meals to an employee (such as in an employee dining room or cafeteria), these meals are not considered a taxable benefit if the employee pays a reasonable charge. A reasonable charge is one that covers the cost of food, its preparation, and service.

If the charge is not reasonable, the value of the benefit is the cost of the meals, minus any payment the employee makes.

If GST/HST applies on subsidized meals, include it in the value of the benefit. You have to include that amount in the employee's income without considering any amounts he or she reimbursed you.

Payroll deductions

Where the subsidized meals benefit is taxable, it is also pensionable. However, since it is a non-cash benefit, it is not insurable. Deduct CPP contributions and income tax, but do not deduct EI premiums.

Reporting the benefit

Report the taxable benefit in box 14 "Employment income" and in the "Other information" area under code 40 at the bottom of the T4 slip. For more information, see T4 - Information for employers.

Date modified: