Rewards and your taxes
When you issue rewards to employees through teambrite, it's important to understand your tax responsibilities under Canadian law (CRA guidelines).
Is reward balance taxable?
Yes. Even though rewards are issued as a reward balance, it's a near-cash equivalent. That includes cashback.
Reward balance is redeemable at MSRP for merchandise from major brands like Bose, Garmin, and Ray-Ban, so they carry a clear fair market value.
"If a reward or gift can be readily converted into cash or has a clear fair market value, it is considered a taxable employment benefit and must be included on the employee's T4."
What this means for employers
Report as a taxable benefit
Rewards redeemed through teambrite should be reported as taxable benefits.
Include on each employee's T4
You are responsible for including the value of rewards on each employee's T4.
Withhold and remit
You may also be required to withhold and remit income tax, CPP, and EI on the value of these rewards.
Reporting support
teambrite offers tools to help with compliance:
- Exportable reward redemption reports per employee
- Total value (in CAD) of redeemed items
- Timestamps and item descriptions
We recommend sharing this data with your payroll provider to ensure accurate year-end reporting.
Disclaimer
This information is provided for general guidance only. For specific tax advice or questions about compliance, please consult a qualified tax professional or the CRA directly.