As a corporation registered for the GST/HST, you buy a vehicle that is used more than 50% in commercial activities and is made available to your employee during 2022. The last establishment where the employee ordinarily reported in the year for the corporation was located in Manitoba.

You calculated a taxable benefit (including GST and PST) of $4,800 on the standby charge and an operating expense benefit of $600. Your employee reimbursed you $1,800 for the automobile operating expenses within 45 days of the end of 2022, so the operating expense benefit to be reported was reduced by this amount.

You claimed an input tax credit (ITC) for the purchase of the automobile and also on the operating expenses. Since the benefit is taxable under the Income Tax Act, and no situations described in Situations where you are not considered to have collected the GST/HST apply, you calculate the GST remittance as follows:

Step 1: Calculate GST considered to have been collected on the standby charge benefit
Multiply the taxable benefit reported on the T4 slip ($4,800) by the appropriate provincial fraction (4/104 for Manitoba). The GST considered to have been collected on the standby charge benefit would be $184.62.

Step 2: Calculate GST considered to have been collected on the operating expense benefit
First, add the taxable benefit reported on the T4 slip ($600) and the employee's partial reimbursement of operating expenses ($1,800). Then multiply the result of this addition ($2,400) by the appropriate provincial percentage (3% for Manitoba). The GST considered to have been collected on the operating expense benefit is $72.00.

Step 3: Calculate total GST to be remitted on the automobile benefit
The total GST to be remitted is the sum of the result of step 1 ($184.62) and step 2 ($72.00). The total GST to be remitted on the automobile benefit is $256.62.

You are considered to have collected GST in the amount of $256.62 at the end of February 2023. You have to include this amount on your GST/HST return for the reporting period that includes the last day of February 2023.

Using the same facts as in Example 1, assume that the last establishment to which the employee ordinarily reported in the year for the corporation was located in New Brunswick. The corporation is not a large business for the purpose of recapturing input tax credits for the provincial part of the HST. In this case, you would calculate the HST remittance as follows:

Step 1: Calculate HST considered to have been collected on the standby charge benefit
Multiply the taxable benefit reported on the T4 slip ($4,800) by the appropriate provincial fraction (14/114 for New Brunswick). The GST considered to have been collected on the standby charge benefit would be $589.47.

Step 2: Calculate HST considered to have been collected on the operating expense benefit
First, add the taxable benefit reported on the T4 slip ($600) and the employee's partial reimbursement of operating expenses ($1,800). Then multiply the result of this addition ($2,400) by the appropriate provincial percentage (11% for New Brunswick). The GST considered to have been collected on the operating expense benefit is $264.00.

Step 3: Calculate total HST to be remitted on the automobile benefit
The total GST to be remitted is the sum of the result of step 1 ($589.47) and step 2 ($264.00). The total GST to be remitted on the automobile benefit is $853.47.

You are considered to have collected HST in the amount of $853.47 at the end of February 2023. You have to include this amount on your GST/HST return for the reporting period that includes the last day of February 2023.

You bought a watch for $560 (including the GST/HST and PST) for your employee to mark the employee's 25 years of service. It was the only gift or award provided to the employee in the year. You reported a taxable benefit of $60 in box 14 and under code 40 on the employee's T4 slip.

There is no GST considered to have been collected on the long service award.

In this situation, you cannot claim an ITC because you bought the watch for the employee's exclusive personal use and enjoyment. Therefore, there is no GST/HST to remit on the benefit.

You provided safety footwear designed to protect your employee from hazards associated with their employment. The footwear is not considered to be a taxable benefit for the employee, so you are not considered to have collected the GST/HST on the footwear and you do not have to remit any tax. However, you can claim an ITC for any GST/HST that you paid for the footwear.

There is no GST considered to have been collected on the special clothing.