PAYROLL FUNDAMENTALS LATEST 2026 END OF
COURSE QUESTIONS AND SOLUTIONS RATED A+
✔✔Taxable Benefit: Premiums paid for non-group plans (disability) - ✔✔Considered a
non-cash taxable benefit
✔✔Taxable Benefit: Accidental death & dismemberment (AD&D) plans - ✔✔Premiums
are considered a non-cash taxable benefit
✔✔Taxable Benefit: Group Term Life Insurance Plans - ✔✔All premiums paid by the
employer are taxable
✔✔Registered Retirement Savings Plan (RRSP) contributions are non-taxable if: - ✔✔-
The employee cannot withdraw the amounts from the group RRSP until they retire or
cease to be employed
- are only allowed to withdraw funds under the Home Buyers' Plan Lifelong Learning
Plan
✔✔Personal living expenses - ✔✔If an employer reimburses an employee for personal
living expenses the expense reimbursement is taxable
✔✔When a clothing allowance is taxable - ✔✔When the employee has the freedom to
choose what they will wear and is not a distinctive uniform or required for safety reasons
✔✔Calculation of the taxable benefit on a regular loan - ✔✔tax on the interest the
employee would have paid at the government-prescribed interest rate
✔✔Taxable benefit: Regular loan - ✔✔if it is received interest-free or below the
government's interest rate it is considered a taxable benefit
✔✔When an employer provides a loan to an employee they must be classified as: -
✔✔a regular loan or a home purchase loan
✔✔There is no taxable benefit for tuition if: - ✔✔- An employer pays for an employee's
course that is specifically related to the employee's position or career advancement and
the employer is the primary beneficiary rather than the employee
- When an employer pays for a course that can benefit the employer, even though it is
not directly related to the employee's current position
✔✔When tuition paid is considered a taxable benefit - ✔✔When the employer pays for a
course that is primarily for the employee's benefit.
✔✔There is no taxable benefit to parking if: - ✔✔- When free or subsidized parking is
provided to a physically disabled employee
, - when there is a distinct or regular require for an employee to have a parking space
- when an employer pays for parking costs incurred by an employee who is travelling
- when a business operates from a shopping center or industrial park where parking is
available to employees and non-employees
- when an employer provides scramble parking (when there are fewer spaces than there
are employees and the spaces are first-come first-serve)
✔✔Taxable Benefit: Parking - ✔✔When the employer pays for the employee's parking it
is considered a non-cash taxable benefit
✔✔Personal use of a cell phone is not considered a taxable benefit if: - ✔✔- the plan's
cost is reasonable
- the plan is a basic plan with a fixed cost
- the employee's personal use of the service does not result in charges that are more
than the basic plan cost
✔✔Taxable Benefits: Employer paid cell phones for company use - ✔✔not considered a
taxable benefit
✔✔Taxable Benefits: Allowance given to cover the cost of a cell phone/internet service -
✔✔Considered a cash taxable benefit
✔✔Gifts and awards that are near-cash (gift cards, stocks, gold nuggets, etc) -
✔✔Taxable employment income subject to CPP, income taxes and NT/NU payroll
taxes, regardless of the value or the reason the employee receives it
✔✔Long-service awards - ✔✔Can use an additional $500 exemption as long as they
have been employed for 5 years and it has been 5 years since their last award
✔✔Non-cash gift and awards exemption - ✔✔$500 per year that can be applied against
the total value of all the non-cash gifts and awards given to an employee annually, any
amount over is included in the employee's income as a non-cash taxable benefit
✔✔Non-regular payments - ✔✔Payments made that have no established frequency
✔✔Non-regular payment examples - ✔✔- Retroactive adjustments
- Bonus payments
- Vacation payments with no time taken off
✔✔Retroactive earnings - ✔✔A delayed payment of earnings owed to an employee
✔✔Retroactive adjustment - ✔✔When the increase in wages in processed after the
increase has been awarded
COURSE QUESTIONS AND SOLUTIONS RATED A+
✔✔Taxable Benefit: Premiums paid for non-group plans (disability) - ✔✔Considered a
non-cash taxable benefit
✔✔Taxable Benefit: Accidental death & dismemberment (AD&D) plans - ✔✔Premiums
are considered a non-cash taxable benefit
✔✔Taxable Benefit: Group Term Life Insurance Plans - ✔✔All premiums paid by the
employer are taxable
✔✔Registered Retirement Savings Plan (RRSP) contributions are non-taxable if: - ✔✔-
The employee cannot withdraw the amounts from the group RRSP until they retire or
cease to be employed
- are only allowed to withdraw funds under the Home Buyers' Plan Lifelong Learning
Plan
✔✔Personal living expenses - ✔✔If an employer reimburses an employee for personal
living expenses the expense reimbursement is taxable
✔✔When a clothing allowance is taxable - ✔✔When the employee has the freedom to
choose what they will wear and is not a distinctive uniform or required for safety reasons
✔✔Calculation of the taxable benefit on a regular loan - ✔✔tax on the interest the
employee would have paid at the government-prescribed interest rate
✔✔Taxable benefit: Regular loan - ✔✔if it is received interest-free or below the
government's interest rate it is considered a taxable benefit
✔✔When an employer provides a loan to an employee they must be classified as: -
✔✔a regular loan or a home purchase loan
✔✔There is no taxable benefit for tuition if: - ✔✔- An employer pays for an employee's
course that is specifically related to the employee's position or career advancement and
the employer is the primary beneficiary rather than the employee
- When an employer pays for a course that can benefit the employer, even though it is
not directly related to the employee's current position
✔✔When tuition paid is considered a taxable benefit - ✔✔When the employer pays for a
course that is primarily for the employee's benefit.
✔✔There is no taxable benefit to parking if: - ✔✔- When free or subsidized parking is
provided to a physically disabled employee
, - when there is a distinct or regular require for an employee to have a parking space
- when an employer pays for parking costs incurred by an employee who is travelling
- when a business operates from a shopping center or industrial park where parking is
available to employees and non-employees
- when an employer provides scramble parking (when there are fewer spaces than there
are employees and the spaces are first-come first-serve)
✔✔Taxable Benefit: Parking - ✔✔When the employer pays for the employee's parking it
is considered a non-cash taxable benefit
✔✔Personal use of a cell phone is not considered a taxable benefit if: - ✔✔- the plan's
cost is reasonable
- the plan is a basic plan with a fixed cost
- the employee's personal use of the service does not result in charges that are more
than the basic plan cost
✔✔Taxable Benefits: Employer paid cell phones for company use - ✔✔not considered a
taxable benefit
✔✔Taxable Benefits: Allowance given to cover the cost of a cell phone/internet service -
✔✔Considered a cash taxable benefit
✔✔Gifts and awards that are near-cash (gift cards, stocks, gold nuggets, etc) -
✔✔Taxable employment income subject to CPP, income taxes and NT/NU payroll
taxes, regardless of the value or the reason the employee receives it
✔✔Long-service awards - ✔✔Can use an additional $500 exemption as long as they
have been employed for 5 years and it has been 5 years since their last award
✔✔Non-cash gift and awards exemption - ✔✔$500 per year that can be applied against
the total value of all the non-cash gifts and awards given to an employee annually, any
amount over is included in the employee's income as a non-cash taxable benefit
✔✔Non-regular payments - ✔✔Payments made that have no established frequency
✔✔Non-regular payment examples - ✔✔- Retroactive adjustments
- Bonus payments
- Vacation payments with no time taken off
✔✔Retroactive earnings - ✔✔A delayed payment of earnings owed to an employee
✔✔Retroactive adjustment - ✔✔When the increase in wages in processed after the
increase has been awarded
