PAYROLL FUNDAMENTALS UPDATED EXAMS SCRIPT QUESTIONS AND SOLUTIONS RATED

PAYROLL FUNDAMENTALS UPDATED EXAMS SCRIPT
QUESTIONS AND SOLUTIONS RATED A+
✔✔Cash taxable benefits - ✔✔Subject to all statutory withholdings

✔✔Non-Cash taxable benefits - ✔✔Subject to all statutory withholdings, except for EI
and QPIP premiums

✔✔If the employer reimburses employees for money they paid for the benefit - ✔✔The
reimbursement is included in the employee's income as a cash taxable benefit

✔✔If the employer pays a taxable benefit to a third party - ✔✔The value is included in
the employee's income as a non-cash taxable benefit

✔✔Taxable Benefits - ✔✔When an employer provides employees with items that are to
the employee's benefits, the CRA and RQ may determine that the benefit is taxable to
the employee

✔✔Taxable Benefit: Short-term and Long-term disability plans - ✔✔There is no taxable
benefit

✔✔Taxable Benefit: Fees paid to employee for employee assistance plan -
✔✔Considered a cash taxable benefit

✔✔Taxable Benefit: Fees paid directly to the provider for an employee assistance plan -
✔✔not considered a taxable benefit

✔✔Employee assistance plans - ✔✔Make confidential counselling services available to
employees for physical or mental health counselling or family counselling

✔✔Taxable Benefit: Provincial health insurance plans - ✔✔Not considered a taxable
benefit

✔✔Taxable Benefit: Private health insurance plans (all provinces except Quebec) -
✔✔Not considered a taxable benefit

✔✔Taxable Benefit: Private health insurance plans (Quebec) - ✔✔Considered a non-
cash taxable benefit

✔✔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