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Thread: Employee clothing discounts are now a taxable benefit

  1. #1
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    Default Employee clothing discounts are now a taxable benefit

    Yes fuckers, the Libs need money and the guise of "tax fairness" is now being thrown out the window.

    Employee clothing discounts are now a taxable benefit.

    Money money money!

    Behind the paywall, luckily I'm baller.

    Never trust a man named Zoltan.

    https://beta.theglobeandmail.com/new...ticle36523730/

    The sales clerk who gets a 25-per-cent discount on the shoes sold at her store is facing a new bill: The Canada Revenue Agency has indicated that employee discounts will now be taxed.

    Companies have long offered discounts to their staff, but as a long as items weren't sold to them below cost, neither employer nor employee had to count them as taxable benefits. The CRA's employer's guide, on the agency's website, said so.

    But the CRA has issued a more recent tax "folio" indicating that employee discounts are to be considered taxable benefits, and part of their income.

    It's a reinterpretation that prompted disbelief. "Why would the government want to abandon long-standing practice to start taxing a store employee for a 20-per-cent discount on a pair of jeans?" Retail Council of Canada vice-president Karl Littler said at a hearing of the Commons finance committee on Sept. 27.

    For months, employer organizations thought that the interpretation in the new tax folio, which indicate employee discounts are taxable benefits, might simply be a mistake. After all, it contradicted CRA's employer guide, which has been in use for years and remains on the agency's website. The employer guide said employee discounts are "not usually considered a taxable benefit," while the new folio indicates "the value of the discount is generally included in the employee's income."

    But a spokesperson for the CRA, Zoltan Csepregi, told The Globe and Mail in an e-mail that it is the new folio that is "correct and represents CRA's interpretation of the law." He said CRA's employers' guide and its websites – which had long indicated that employee discounts don't need to be counted up as taxable benefits – will be updated "to ensure that the practical guidance is consistent with the folio."

    At a time when the Liberal government is facing controversy over changes to the taxation of small business, arguing that they are closing loopholes for the affluent to be fair to the middle class, starting to tax employee discounts seems to clash with the political message.

    Employers discounts typically add up to relatively small sums for the individual who receives them, and they tend to be in jobs that pay relatively modest wages. Mr. Littler told the Commons committee the rule change would affect many of the country's two million retail-sector employees, and possibly hundreds of thousands in other sectors.

    For employers, he warned, it could mean an "administrative nightmare." If employee discounts are taxable benefits, then presumably employers would be expected to track them, and tally their value each time an employee buys a discounted item, recording the annual total on their T4 – perhaps encouraging them to drop the discounts to avoid the hassle.

    "I can't help but shake my head at this one, to be honest with you," Liberal MP Wayne Easter, chair of the Commons finance committee meeting, told Mr. Littler at the hearing.

    The Canada Revenue Agency said in a statement e-mailed to The Globe that they don't expect the change in their interpretation to bring about a significant change in the number of employee discounts that are reported as taxable benefits. They pointed to an exception that stipulates that if an employer has a sale where "that same discount is also available to the general public," then the employee discount won't be considered taxable income.

    But employers' groups say that that seems like a narrow loophole, and they are confused that the CRA seems to be suggesting it can be applied to most employee discounts. Rachel de Grace of the Canadian Payroll Association, an employers' organization that deals with payroll matters, said it's not clear how CRA expects the new policy to be applied.

    Mr. Easter, the chair of the Commons finance committee, said he thinks the CRA should reconsider its new approach. "They had better," he said in an interview.

    He said it appears that the political level of government – cabinet ministers and their political staff – were not aware that officials in the department had changed the interpretation of the law.

    Most of the people who benefit from employee discounts are not high-income earners, he said.

    "And how are you going to track something like that?" he said. "C'mon. Let's have a little common sense."

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    So, save 10% on a pair of shoes, only to pay an extra 15% tax... seems legit.

    Pride minister shitstin strikes again.
    ...

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    So the employer has to show these discounts as lost revenue now, report that on the employee's pay stub/T4 as a taxable benefit and deduct tax/EI/CPP plus on their own side report the matching EI/CPP amounts? Holy crap, what a pain in the ass that'll be especially when the sales systems and payroll systems in most companies are not integrated.

    It's getting to the point where it'll be simpler and easier for companies to have every employee become a subcontractor.
    Last edited by speedog; 10-09-2017 at 06:58 AM.
    Will fuck off, again.

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    First thing that came to my mind is Ford employee pricing commercials.

    Really Justine? You dick.
    "The most merciful thing in the world, I think, is the inability of the human mind to correlate all its contents... some day the piecing together of dissociated knowledge will open up such terrifying vistas of reality, and of our frightful position therein, that we shall either go mad from the revelation or flee from the light into the peace and safety of a new Dark Age."

    -H.P. Lovecraft

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    Wow. They are just finding extra revenue everywhere to help the middle class now, aren't they.

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    So how does this apply for someone like an airline employee who gets free/discounted flights/hotels/rental cars as a benefit?

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    Quote Originally Posted by Twin_Cam_Turbo View Post
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    So how does this apply for someone like an airline employee who gets free/discounted flights/hotels/rental cars as a benefit?
    More TAX TAX TAX!
    Sig was pwned by Moderator!

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    The best way to help the average middle class family is to text everything more and more. FACT!
    Quote Originally Posted by killramos View Post
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    You realize you are talking to the guy who made his own furniture out of salad bowls right?

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    So I imagine this means the Marks Work Warehouse discount cards become impossible to enforce and tax meaning they'll probably disappear? I don't think that Marks tells my work when I go (or don't) use the card.
    Cos...

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    Quote Originally Posted by ExtraSlow View Post
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    The best way to help the average middle class family is to text everything more and more. FACT!
    Justin will help by texting you his selfies

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    Quote Originally Posted by Twin_Cam_Turbo View Post
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    So how does this apply for someone like an airline employee who gets free/discounted flights/hotels/rental cars as a benefit?
    The article isn’t specific to clothing discounts. This applies to ALL employee discounts. Employee pricing for TVs at Visions? Taxable. Ford employee pricing? Taxable. Free flights on standby? Taxable. Even staff meal discounts at McDonalds, the only real perk of working there, will be taxable lol.
    Originally posted by SEANBANERJEE
    I have gone above and beyond what I should rightfully have to do to protect my good name

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    And yet it was Harper who ruined the Country and thrust it into debt so really this is his fault. We all have to pull our weight.
    Originally posted by SJW
    Once again another useless post by JRSCOOLDUDE.
    Originally posted by snowcat
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    Quote Originally Posted by JRSC00LUDE View Post
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    And yet it was Harper who ruined the Country and thrust it into debt so really this is his fault. We all have to pull our weight, comrades.
    ftfy
    Quote Originally Posted by killramos View Post
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    You realize you are talking to the guy who made his own furniture out of salad bowls right?

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    Quote Originally Posted by Twin_Cam_Turbo View Post
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    So how does this apply for someone like an airline employee who gets free/discounted flights/hotels/rental cars as a benefit?
    Let's assume the normal fare for a flight is $500 but because you're a WestJet employee you only pay $100 (plus taxes). The $400 discount is now shown as a taxable benefit and you pay based on what your personal income tax rate would be. If you're at a 25% tax bracket then that means you're out of pocket $100 so that $400 discount your employer just gave you is really only a $300 savings.

    Fuckers.
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    the paperwork involved in administering these programs going forward will mean it's just more practical to remove all types of employee discounts altogether.
    Quote Originally Posted by killramos View Post
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    You realize you are talking to the guy who made his own furniture out of salad bowls right?

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    ...
    Last edited by Sugarphreak; 08-18-2019 at 12:30 AM.

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    Quote Originally Posted by Sugarphreak View Post
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    Don't they have better things to do than pick on the lowest income bracket working class? Seriously, wtf
    It's tax fairness, dumb dumb. These cheats should PAY.
    Originally posted by SJW
    Once again another useless post by JRSCOOLDUDE.
    Originally posted by snowcat
    Don't let the e-thugs and faggots get to you when they quote your posts and write stupid shit.
    Originally posted by JRSC00LUDE
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    ^^ Fact Checked

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    Quote Originally Posted by Sugarphreak View Post
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    So what if they have an employee pricing sale? Do customers have to pay the tax on the saved amount? Why not just tax Canadians on full price of sale price items across the board then, lol.

    Don't they have better things to do than pick on the lowest income bracket working class? Seriously, wtf
    Did you read the article? :P

    They pointed to an exception that stipulates that if an employer has a sale where "that same discount is also available to the general public," then the employee discount won't be considered taxable income.

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    Last edited by Sugarphreak; 08-18-2019 at 12:30 AM.

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