Business -> Automobiles, Passenger Vehicles and Motor Vehicles -> Automobile Taxable Benefits -> Employee Parking
Employee Parking Provided by Employer
Income Tax Act s. 6(1)(a)
When parking is provided by an employer to an employee, the fair market value of the parking, less any payment by the employee for the parking, is generally a taxable benefit to the employee. The benefit amount should be included in income when payroll deductions for income tax, Canada Pension Plan (CPP) and Employment Insurance (EI) are calculated, and is included as employment income on the T4.
There are situations in which parking may not be considered a taxable benefit, such as:
COVID-19 Commuting and Parking Benefits
Effective from March 15, 2020 until December 31, 2022, when the regular place of employment is closed due to COVID-19, the CRA will not consider that an employer-provided parking spot at the place of employment available to an employee’s use to be a taxable benefit.
Taxable Value of Parking Spot
The taxable fair market value of the parking spot is generally the market price for a similar spot in the surrounding area. Therefore, if a similar spot in the surrounding area is free, there is no taxable benefit.
If the employer provides certain employees with reserved spots, this would probably be considered a taxable benefit.
Tax Court Cases re Employee Parking Benefit
A Tax Court of Canada case, Smith v. The Queen, 2017 TCC 62, dismissed an appeal by a Jazz Aviation LP employee who was assessed a taxable benefit for the value of a parking pass provided to him by Jazz. Smith appealed to the Federal Court of Appeal, Smith v. Canada, 2019 FCA 173, but lost this appeal as well, but on different grounds. The FCA judge found that Smith had indeed received an economic benefit, and that whether the employer also received a benefit from providing the pass did not matter. The August 2019 Life in the Tax Lane video discusses this case.
Determining whether employer-provided parking is a taxable benefit is not a simple issue, as indicated by the number of Tax Court Cases that can be found. Another such case, where the taxpayer appealed and won, is Long v. The Queen, 2010 TCC 153.
All topics related to vehicles and business
Tax-Free or Reduced-Tax Employee Benefits - includes some that are surprisingly taxable!
Canada Revenue Agency (CRA) Resources
Podcasts: Episode 3 - Parking as a Taxable Benefit
Parking - has a questionnaire to help you determine if an employer-provided parking spot is a taxable benefit.
Tax Tip: Make sure you know the tax status of your parking privileges!
Revised: February 05, 2022
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