Each year, the CRA provides a list of commonly requested audit adjustments to an employer’s payroll as a result of wages and benefits not being correctly reported by the employer. The following is from a series of top ten CRA adjustments.
Top Ten CRA Adjustments
Number 5: Personal and living expenses (employees or shareholders)
Many corporate owners look at this type of expense as personal drawings and are therefore not reporting it as taxable income. These include appropriations of corporate assets for personal use. As part of their compensation agreement, some employees may have personal living expenses paid for by their employer. Unless these fall under a specific exemption, such expenses would be considered to be part of taxable income.
Increase your compliance knowledge by attending the CPA’s Taxable Benefits professional development seminar for more information on personal and living expenses, as well as other taxable benefits and allowances.