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: Whether a $25 meal allowance paid every two weeks for meals expenses incurred due to extended shifts results in a taxable benefit.
Position: No.
Reasons: It meets the CRA's general position that a taxable benefit does not result where: (a) the employee works three or more hours of overtime right after his or her regularly scheduled hours of work, and (b) the overtime is infrequent and occasional in nature (less than three times a week).
2006-016597
XXXXXXXXXX Charles Rafuse
613-957-8967
May 29, 2006
Dear XXXXXXXXXX:
Re: Meal Allowances
This is in reply to your letter dated January 6, 2006, concerning an interpretation of the Income Tax Act (the "Act") regarding meal allowances.
Specifically, you have indicated that XXXXXXXXXX provides Doctors employed as interns with a $25 meal allowance every two weeks. This is to compensate them for meals they consume in the hospital cafeteria due to extended shifts. You indicated that the interns spend more than the $25 every two weeks on cafeteria meals because of the extended shifts.
The CRA's general position on the taxable status of overtime meals is discussed in the Employers' Guide Taxable Benefits. Where an employer pays for, reimburses or provides an allowance to an employee for reasonable meal expenses incurred while the employee is required to work overtime, a taxable benefit does not result where:
(a) the employee works three or more hours of overtime right after his or her regularly scheduled hours of work, and
(b) the overtime is infrequent and occasional in nature (less than three times a week).
Since the meal allowance paid to interns is only $25 every two weeks, we are of the view that it is within an acceptable range. Accordingly, it is our view that the meal allowance does not result in a taxable benefit. Please note that our opinion is based, in part, on the nominal nature of the allowance for the two week period it covers, and your assurance that the interns actually work extended shifts. Should any of these factors change, our opinion could differ.
We trust this information is helpful.
Yours truly,
Randy Hewlett
For Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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