Example 1

In March 2016, 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 2016.

The taxable benefit you will report on Clara's 2016 T4 slip will be $12,500, calculated as follows:

1/2 × ($40,000 − $15,000)

Example 2

In June 2015, 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, 2015.

Paul's eligible housing loss amounted to $65,000. You paid out the compensation in two payments: $30,000 in September 2015 and $35,000 in February 2016.

Paul's taxable benefit in 2015 was $7,500 (half of the amount paid in 2015 that is more than $15,000).

Paul's taxable benefit in 2016 is $17,500. This is calculated as follows:

• half of the total amounts paid in 2015 and 2016 that is more than $15,000
  (1/2 × [$65,000 − $15,000] = $25,000);

minus

• the amount included in income in 2015 ($7,500).