Looking to hire in Canada

Business-related phone, internet, and coworking costs can be reimbursed when supported by a tax invoice or receipt that shows the date, amount, description of the service, and (for higher-value items) the provider and employee name. Roaming or hotspot charges during business travel and coworking space fees are treated as non taxable, while regular monthly phone and internet plans are taxable.

Office supplies, postal charges, laptops, equipment, and software subscriptions are reimbursable on a non taxable basis when they are for business use and supported by a tax invoice, receipt, or order confirmation showing the date, amount, merchant, and description. For higher-value software subscriptions, the employee name should also appear on the documentation.

Most business travel costs, including insurance, visas, transport, accommodation, fuel, parking, and tolls, are non taxable when backed by appropriate documentation that clearly shows the date, amount, merchant, and business-related details. Mileage in an employee’s own vehicle is non taxable when tracked via a mileage log or calculator and reimbursed within the stated per‑kilometre limits.

Reasonable business-related meals, groceries for work travel, client meals, and promotional items for events can be reimbursed on a non taxable basis when supported by a tax invoice, receipt, or transaction details showing the date, amount, merchant, and what was purchased.

Training, courses, and books, as well as certain medical exams required for work, are non taxable when properly invoiced and clearly linked to employment. Gifts to employees are non taxable only up to a total of CAD 500 per year, while gifts to clients are non taxable when supported by full tax documentation.

Bonuses and commissions are treated as special payments and taxed at higher withholding rates in the pay periods when they are paid. Any over-withholding on these bonus payments is reconciled when the employee files their annual tax return with the Canada Revenue Agency.

Moving and relocation expenses for employees are supported as long as they meet Canada Revenue Agency criteria for reimbursement. Employers should ensure each reimbursed cost aligns with these guidelines to preserve favourable tax treatment.

Non taxable per diem allowances can be used to cover meals and incidental expenses during business travel when the daily amount is reasonable and aligned with Canada Revenue Agency guidance. The current prescribed per diem rate is CAD 135 per day, and per diems above this amount are not supported and may be taxed in full; employers should keep a travel itinerary or hotel booking that shows the business purpose, number of travel days, and the daily per diem requested.

Car allowances for employees using their own vehicles for business must be treated as taxable allowances through payroll, and all personal-vehicle car expenses should be classified this way. By contrast, a per‑kilometre allowance can be non taxable if it is based only on business kilometres, paid at or below the prescribed rate, and not combined with other vehicle reimbursements for the same use (other than tolls, ferries, or extra business insurance); if the rate exceeds the prescribed limit, the entire allowance becomes taxable.

Employers may also choose to offer various discretionary cash allowances, such as for wellness or insurance, to selected employees. These are optional benefits and are treated as taxable income to the employee.