Housing loss
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Housing loss
If you pay or reimburse your employee for a housing loss, the amount is a taxable benefit for the employee.
However, there is an exception for amounts paid for an eligible housing loss. Generally, in these situations, only half of the amount that is more than $15,000 is taxable.
Note
If you spread the payment over two years, you will need to include an amount on your employee's T4 slip for each year.
See examples below to determine how to calculate the taxable benefit.
Example 1
In March 2023, you compensated Clara, your employee, for a $40,000 loss she incurred on the sale of her house. The loss was an eligible housing loss. Clara started to work at her new workplace in June 2023.
The taxable benefit you will report on Clara's 2023 T4 slip will be $12,500, calculated as follows:
1/2 × ($40,000 − $15,000)
Example 2
In June 2022, you agreed to compensate Paul, your employee, for any eligible housing loss that he incurred on the sale of his house. Paul started to work at his new work location on December 1, 2022.
Paul's eligible housing loss amounted to $65,000. You paid out the compensation in two payments: $30,000 in September 2022 and $35,000 in February 2023.
Paul's taxable benefit in 2022 was $7,500 (half of the amount paid in 2023 that is more than $15,000).
Paul's taxable benefit in 2023 is $17,500. This is calculated as follows:
- half of the total of amounts paid in 2022 and 2023 that is more than $15,000
(1/2 × [$65,000 − $15,000] = $25,000)
minus
- the amount included in income in 2022 ($7,500)
Payroll deductions
If the benefit is taxable, it is also pensionable. Deduct CPP contributions and income tax. If the taxable benefit is paid in cash, it is insurable. Deduct EI premiums. If it is a non-cash benefit, it is not insurable. Do not deduct EI premiums.
Reporting the benefit
Report the taxable benefit in box 14 "Employment income" and in the "Other information" area under code 40 at the bottom of the T4 slip. For more information, see T4 – Information for employers.
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- Date modified:
- 2024-01-05