Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: An employer is planning to make a weight loss program available to all of its employees. The employees who choose to participate will be charged a nominal fee. Whether or not a weight loss program is a taxable employment benefit.
Position: Yes.
Reasons: If a weight loss program is provided to employees, they are in receipt of a taxable benefit. The benefit is calculated as the cost of the program to the employer less any recoveries from an employee who participates in the weight-loss program.
XXXXXXXXXX 2005-010973
Kathryn McCarthy, CA
March 4, 2005
Dear XXXXXXXXXX:
Re: Taxable Benefit - Weight Loss Program
We are writing in response to your letter of January 3, 2005, concerning the above noted subject.
You described an employer that is planning to make a weight loss program available to all of its employees. The employees who choose to participate will be charged a nominal fee. In your opinion, this program would be to the employer's advantage since a healthier and happier workforce leads to decreased absenteeism. You enquire as to whether or not a weight loss program is a taxable employment benefit under the Income Tax Act (the Act).
Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Rulings, dated May 17, 2002. Where the particular transactions are completed, the inquiry should be addressed to the relevant Tax Services Office. We are, however, prepared to provide the following comments.
In our opinion, if you provide a weight loss program for employees, your employees are in receipt of a taxable benefit. The benefit is calculated as the cost of the program to the employer less any recoveries from an employee who participates in the weight-loss program.
We trust our comments will be of assistance to you.
Yours truly,
John Oulton, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Planning Branch
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