Disaster relief payments from an employer are not income

An employer proposed to match donations from its employees to any of its employees affected by the Calgary floods, to be distributed on the basis of need and magnitude of damage.  CRA stated that such payments would not be subject to income tax provided that "the individual received the Payment in his or her capacity as an individual, as opposed to his or her capacity as an employee."  For the payments to be tax-free, they must be philanthropic in purpose and their quantum must not relate at all to the individual's performance or pay grade.

Scott Armstrong.  Summary of 12 July 2013 T.I. 2013-0496281E5 under s. 6(1)(a).