10 June 2013 External T.I. 2013-0477351E5 - Employer-provided in-house fitness facilities

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: Are employer-provided in-house fitness facilities a taxable benefit, if available to all employees?

Position: No

Reasons: CRA policy

XXXXXXXXXX
2013-047735
B. Ruttan-Morillo

June 10, 2013

Dear XXXXXXXXXX:

This is in response to your email dated January 16, 2013, asking whether employer-provided fitness facilities would give rise to a taxable benefit to employees.

Generally, the payment or reimbursement of club dues or membership fees by an employer results in a taxable benefit to the employee. However, there will be no taxable benefit to employees in the following scenarios:

• The employer provides an in-house recreational facility that is available to all employees, whether provided free or for a minimum charge;
• The employer pays a fee to an external recreational facility that is available to all employees and the membership is in the employer's name; or
• The employer provides a membership in a social or athletic club for select employees and it can be clearly demonstrated that the membership is for the employer's advantage.

You should note that the CRA does not consider an employer to be the primary beneficiary in situations where an employee's membership in or use of a fitness facility provides only an indirect benefit. This would be the case where the employee becomes physically healthier as a result of utilizing the club's facilities and consequently becomes generally better able to perform his or her duties (e.g. less sick days, reduce downtime, remain fit for duty). In such situations, the employee is regarded as being the primary beneficiary and would be in receipt of a taxable benefit described in paragraph 6(1)(a) of the Income Tax Act.

We trust these comments are of assistance to you.

Yours truly,

Nerill Thomas-Wilkinson, CPA, CA
Manager
For Director
Business and Employment Division
Income Tax Rulings Directorate