As per the guidelines of the Canada Revenue Agency, the provision of parking by an employer to an employee is considered a taxable benefit. The amount of the taxable benefit is calculated by subtracting any payment made by the employee for the use of the parking space from the fair market value of the parking during the year in which the benefit was received.
However, there is no taxable benefit for employees when the two following conditions are met:
· Parking is provided to employees for business purposes; and
· Employees regularly have to use their own vehicle or ones the employer has supplied to perform their employment duties during business hours.
The CRA considers regularly to be an average of three or more days per week.
In addition, the parking benefit is generally not taxable if the employee has a disability.
From an administrative standpoint, the CRA views business purposes as instances where an employee is obligated to use a vehicle as part of their work duties, such as attending meetings or servicing calls off-site.
Under the CRA policy, the following is not considered for business purposes:
- Working extended or irregular hours (such as working in the early morning or late at night provided that public transportation is available)
- Travelling between work and home
CRA states that the reporting of the benefit is not required in the following situations:
- An employer provides "scramble parking", which is defined as where there are fewer parking spaces than there are employees who require parking and the parking spaces are available on a first-come, first-served basis; or
- A business operates from a shopping centre or industrial park where parking is available to both employees and non-employees.