Parking

Questions and answersAnswer 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 (FMV) of the parking, minus any amount the employee pays to use the space. You have to include any GST/HST that applies to the value of this benefit.

There are some exceptions to the taxability of parking:

  • If the employee has a disability, the parking benefit is generally not taxable, see Disability-related employment benefits.
  • There is no taxable benefit for an 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.

We do not require you to include a benefit in your employee's income in the following situations:

  • A business operates from a shopping centre or industrial park where parking is available free of charge to both employees and other people.
  • You provide scramble parking. Scramble parking is still a benefit to the employee, but in the absence of the ability to accurately assign a value to the benefit because of the random or uncertain nature of it, a benefit is not included in income. For examples, see Examples of Scramble Parking.

Note

If you provide enough parking spaces for all employees who want 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.

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.

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.

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