Parking

Answer a few questions to determine whether there is a taxable benefit.

Employer provided parking is usually a taxable benefit for an employee, whether or not the employer owns the lot. The amount of the benefit is based on the fair market value of the parking, minus any payment the employee makes to use the space.

If you cannot determine the fair market value, do not add a benefit to the employee's remuneration. This could happen in the following situations:

• A business operates from a shopping centre or industrial park where parking is available to both employees and other people.
• An employer provides scramble parking (there are fewer spaces than there are employees who want parking and the spaces are available on a first-come, first-served basis).

Note
If you provide enough parking spaces for all employees who require parking, but do not assign the parking spaces to individual employees, this is not scramble parking. You must add the benefit to the employee's remuneration.

If the employee has a disability, the parking benefit is generally not taxable, see Disability-related employment benefits.

There is no taxable benefit for employee when both of the following conditions are met:

• You provide parking to your employee for business purposes.
• Your employee regularly has to use his or her own automobile or one you usually supply to do his or her duties.

Note
Travel between work and home is not considered travel for business purposes.

To determine if an employee has received a benefit, the facts of each case must be examined. If you are not sure if employer-provided parking is a taxable benefit contact your tax services office.

You have to include any GST/HST that applies in the value of this benefit.

Payroll deductions

If the benefit is taxable, deduct CPP contributions and income tax. If the taxable benefit is paid in cash, deduct EI premiums. If it is a non-cash benefit, do not deduct EI premiums.

Reporting the benefit

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