Recent changes – Employees

Module 05 – Employés

13 Nov 20243 min read

  • The prescribed capital cost for automobile expenses is increased from $37,000 to $38,000 (unchanged ceiling of $61,000 for an eligible zero-emission vehicle) and the monthly leasing cost ceiling is increased from $1,050 to $1,100 for purchase and lease agreements entered into since 2025.
  • The reduction from 50% to 33.33% of the deduction for the employee stock option benefit was cancelled. As a result, the announced increase to the capital gains inclusion rate that had been slated for June 25, 2024 was cancelled.

FEDERAL

  • As of 2026, a temporary refundable tax credit over five years equal to 5% of yearly eligible employment income up to a maximum of $22,000 (maximum annual credit of $1,100) will be granted to personal support workers employed by an eligible health care establishment and whose primary functions include assisting patients with their activities of daily living and mobilization.

QUEBEC

  • Beginning in 2025, the key parameters of the tax credit for career extension were modified and the eligibility age was increased from 60 to 65.
  • Since March 26, 2025, no new applications for the tax holiday for salaries paid to certain foreign specialists have been accepted.
  • As of 2028, the cost of public transit passes paid or reimbursed by an employer for an employee to travel to work will not be a taxable benefit for the employee.

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Section 05 - Employees

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1- Taxable benefits

It is essential to determine a person's tax status as self-employed or employee. The consequences are significant for both the worker and employer. The
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2- Stock options

An employee who acquires shares in the employer's corporation under a stock option plan is deemed to have received a taxable benefit in the year equal to
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3- Non-taxable benefits

Reasonable automobile allowances are not taxable. An allowance is considered reasonable if it is computed solely based on the number of kilometres driven in
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4- Employment expenses

Employees can only deduct expenses specified in the Act in computing their employment income. In general, employees may claim expenses if the employment
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5- Incentives for workers

The Canada Employment Credit is a non-refundable tax credit equal to 14.5% of the lesser of $1,47137 or the employee's employment income.
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6- Tips – Quebec

Quebec requires most employees who work in an establishment that serves food or alcoholic beverages, or delivers meals (excluding, among others, cafeterias
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7- New graduates working in region – Quebec

New college or university graduates who find a job in a remote resource region within 24 months of graduating are entitled to a non-refundable tax credit
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8- Foreign specialists – Quebec

Quebec grants a tax exemption for salaries paid to certain foreign specialists for a maximum continuous period of five years where the employer holds a
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9- Volunteer firefighters ans search and rescue volunteers

Volunteer firefighters and ground, air and marine search and rescue volunteers who perform at least 200 hours of eligible service during a year are eligible
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10- GST/HST and QST refund

Employees of GST/HST and QST registrants may be entitled to a refund of the taxes paid on taxable expenses that are deductible in computing their employment income. Any refund has to be included in income in the year it is received by the employee or applied to reduce the cost of property if it relates to a property. In Quebec, the refund received in respect of professional or union dues is not taxable (see point 4 of this section).
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11- Salary deferrals

A bonus can be deferred for a maximum of three years. Since the employee is taxed only upon receiving the amount, the employer may only claim the deduction at
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