Board and lodging provided to employees at unreasonably low rates are taxable benefits. In other words, if the employee paid less than fair market value (FMV) for board and lodging, the employer will need to include the T4, the FMV of the cost less the amount the employee actually paid.
If you received reimbursement for meals expense that you incurred, the meals expense will be fully deductible to you. However, you will also have to report the reimbursement that you received as income. In effective, the income will cancel out the expense.
Management fees are paid to the managers of a business for management services performed. Only reasonable management fees paid can be deducted as an expense. However, the Canada Revenue Agency has not explicitly stated what a reasonable amount is to charge for a management fee. Generally speaking, a reasonable management fee should be equal to … Continue reading What is a reasonable management fee?
If you’re an independent contractor, IT consultant, or small business owner, then Wave Accounting is sufficient for your needs. It’s able to generate all of the financial reports required by your accountant and has the necessary tax codes such as HST. If you have multiple employees, a large customer base, or a lot of vendors, … Continue reading Should I use Wave Accounting for my bookkeeping needs?
The employer won’t have to deduct CPP and EI because those are employment withholding requirements. They also will not have to pay for employment benefits and vacation pay. The cost of CPP and EI per employee could be higher than $3,000, so you can imagine the savings.
Generally, a company cannot declare a dividend above and beyond the retained earnings of the company on the dividend declaration date. You must wait until the company generates additional earnings before declaring additional dividends.
In order to claim employment expenses incurred to earn employment income, you need to request a signed T2200 from your employer. However, the CRA has specifically mentioned that if you buy a computer or other capital assets, you cannot deduct this cost. Further, you cannot capitalize and depreciate (claim CCA) on capital purchases.