Uniforms and special clothing

Your employee does not receive a taxable benefit if either of the following conditions apply:

• You supply your employee with a distinctive uniform he or she has to wear while carrying out the employment duties.
• You provide your employee with special clothing (including safety footwear and safety glasses) designed to protect him or her from hazards associated with the employment.

When you pay an accountable allowance (where receipts are required) to your employee to buy uniforms or protective clothing, this amount is considered to be a reimbursement of expenses, not a taxable benefit.

If you reimburse or pay a reasonable allowance to your employee for the cost of protective clothing he or she bought and you did not require receipts to support the purchases, the reimbursement is not taxable if all of the following conditions apply:

• The law requires the employee to wear the protective clothing on the work site.
• The employee bought the protective clothing.
• The amount of the reimbursement is reasonable.

You may pay a laundry or dry cleaner to clean uniforms and clothing for your employee or you may pay a reasonable allowance to your employee (when he or she does not have to provide a receipt). You may also reimburse the employee for these expenses when he or she presents a receipt. If you do either of these, the amounts you pay are not taxable benefits for the employee.

Include any GST/HST that applies to value of this benefit.

Payroll deductions

Where the benefit is taxable, it is also pensionable. Deduct income tax and CPP contributions. 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 slip.

Forms and publications

• Income Tax Folio S2-F3-C2, Benefits and Allowances Received from Employment

Date modified:

2016-12-08