Please use attached reading material. Looking for XXXXXXXXXXwordUnderstanding the difference between...

Question

Please use attached reading material. Looking for XXXXXXXXXXwordUnderstanding the difference between a cash taxable allowance, a cash taxable benefit and a non-cash taxable benefit is critical when explaining the calculation of net pay to an employee. In your own words, explain whether each allowance and benefit is or is not subject to Canada/Québec Pension Plan (C/QPP) contributions, Employment Insurance (EI) premiums, Québec Parental Insurance Plan premiums and income tax. Provide an example of a cash taxable allowance, a cash taxable benefit and a non-cash taxable benefit.
	
Document Preview: Chapter 
Employment Income – Allowances, 
Expenses and Benefits

Learning Objectives:  
 
Upon completion of this chapter, you should be able to: 
 
1. identify the difference between taxable and non-taxable allowances, expenses 
and benefits 
2. calculate allowances, expenses and benefits 
 car allowance 
 meal allowance 
 clothing allowance 
 personal living expenses 
 group term life insurance benefits  
 group sickness and accident insurance benefits 
 private health insurance benefits 
 provincial health insurance benefits 
 employee assistance plan benefits 
 cell phone and Internet benefits 
 gifts and awards benefits 
 parking benefits 
 tuition benefits 
 loan benefits 
 automobile benefits 
3. calculate net pay

Communication Objective:  
 
Upon completion of this chapter, you should be able to explain the difference 
between reasonable and unreasonable car allowances. 
© The Canadian Payroll Association – Payroll Fundamentals 1 3-1 
Vs 11.0Chapter 3  
Employment Income – Allowances, Expenses and Benefits  
 
Chapter Contents 
 
Introduction ..................................................................................................... XXXXXXXXXX3-3
Allowances and Expenses ............................................................................... XXXXXXXXXX3-4
Car Allowance ............................................................................................ XXXXXXXXXX3-4
Meal Allowance .......................................................................................... XXXXXXXXXX3-7
Clothing Allowance .................................................................................... XXXXXXXXXX3-8
Personal Living Expenses ........................................................................... XXXXXXXXXX3-9
Net Pay Calculation .................................................................................... XXXXXXXXXX3-9
Content Review...

Robert · Accepted Answer

CASH TAXABLE ALLOWANCE 
The cash allowances represent the fixed amount of cash regularly paid by the employer to the 
employee without the requirement of employee to substantiate the same to the employer.  An 
allowance is normally paid for the use of personal things of the employee for the purpose of the 
employer’s business. The allowance is always paid in cash and may or may not be taxable under 
the laws.  
For example, a fixed car allowance may be paid on per month basis for use of employees car for 
the purpose of business. If the amount paid is reasonable under the law, it will not be a taxable 
allowance. If the car allowance  is not reasonable under income tax act, it becomes taxable car 
allowance. 
Cash taxable allowances must be considered in computing  income tax, Canada/ Quebec Pension 
plan contributions, Employment insurance contributions,

Please use attached reading material. Looking for XXXXXXXXXXword Understanding the difference between a cash taxable allowance, a cash taxable benefit and a non-cash taxable benefit is critical when...

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