Payroll Fundamentals 1 : Midterm Exam with Verified Solutions

RQ and CRA define a car allowance as reasonable if: - The allowance is based solely on business kilometres driven in a calendar year - the amount provided is based on the following government-prescribed reasonable guidelines - $0.58 per km for the first 5,000 business km's in the year ($0,62 in the Yukon, NWT & Nunavut) - $0.51 thereafter ($0.56 forYK, NWT, NT) - the employer does not reimburse the employee for expenses related to the same use of the vehicle Personal Driving includes: - vacation travel - driving to conduct personal business - travel between home and work, even if the employer insists the employee drive the vehicle home Business driving includes: - driving to existing and prospective clients, points of call, and other office locations of the employer - when an employee travels directly from home to a point of call, which is not the employer's place of business where the employee regularly reports for work - when the employees travels home directly from a point of call Availability (automobiles) The number of thirty-day periods that the automobile is available to the employee for the current taxation year. The employee has access to or control over the vehicle. Automobile A motor vehicle that is designed or adapted to primarily carry individuals on highways and streets, and has seating capacity of not more than the driver and eight passengers If a gift or award is given to an employee in cash The amount is considered pensionable, insurable and taxable to the employee, subject to all statutory deductions Overtime meal allowance is considered non-taxable if (RQ): - overtime is done at the employer's request and is expected to last for at least two consecutive hours - overtime is done rarely or on an occasional basis - the meal expenses are reimbursed upon presentation of receipts - the meal expenses reimbursed or the value of the meal provided is reasonable The four categories of employment income - Earnings - Allowances - Benefits - Taxable expense reimbursement Earnings Dollar amounts the employer pays an employee for the work they perform Types of earnings - a salary - a rate for each hour worked - a rate per piece of goods produced or picked - a disability payment for time off work due to illness - a payment for vacation time - a premium payment for overtime hours worked - a premium payment for hours worked on shift Allowances Additional dollar amounts paid to employees for the use, or anticipated use, of their personal property for business purposes Benefits Dollar values attributed to something the employer has either provided to an employee or paid for on an employee's behalf