$500 Tax-Free Employer Reimbursement

In April, CRA stated that in the context of the COVID-19 crisis, they are “prepared to accept that the reimbursement, upon presentation of supporting documentation, of an amount not exceeding $500, of all or part of the cost of acquiring personal computer equipment to enable the employee to immediately and properly perform the employee’s work, is primarily for the benefit of the employer, so that it does not result in a taxable benefit to the employee.” During the CRA Roundtable portion of the Canadian Tax Foundation national conference on October 27, 2020, a CRA official noted that the CRA intends to extend this $500 tax-free allowance to “to office furniture or other home office items and not limited to computers.”

In short, you can reimburse your employees up to $500, for the purchase of office or computer equipment that they had to purchase during the COVID epidemic, and this $500 will not be a taxable benefit to the employee.