2016-12-28 00:00:00 Insurance and Benefits English Learn more about creating happy and satisfied employees through different types of benefits with various tax implications. https://d1bkf7psx818ah.cloudfront.net/wp-content/uploads/2017/03/08214532/happy-employee-discusses-company-perks.jpg Benefits and Perks at Work: Rewarding Your Employees

Benefits and Perks at Work: Rewarding Your Employees

2 min read

The success of your small business rests largely on the work done by the people working for you. Happy and satisfied employees are typically more productive, leading to your business being more profitable. Contented employees generally create an atmosphere that encourages shoppers to spend more time and money in your store. There are many elements involved in satisfying employees, including offering perks, benefits, and rewards.

Benefits for Children

One option is offering benefits for employees’ children, although doing so depends largely on the type of small business you have and the resources at your disposal. One of the best ways to benefit your employees’ children is to create a scholarship they are eligible to receive for post-secondary studies. Employees commonly work harder and more efficiently when they know their children will reap some benefit from their diligent efforts.


If your employees spend most of their time at their desks, break up the monotony of the work day with breaks in the schedule for stretching. If you hold daily or regular meetings, consider holding some of them outdoors, allowing your employees to revitalize themselves with fresh air. Look into arranging for employee discounts at a nearby fitness center.


Canadian employers often find their companies rated highly by employees when they offer health and dental insurance at affordable rates. This is especially true if children and spouses are covered as well. Employee health is vital to your business. Offering quality insurance helps to cut down on the amount of time an employee spends off the job due to illness and lets them get medical treatment they need.

Taxable and Untaxable Benefits

When giving any type of benefit to an employee, determine whether the benefit is taxable or non-taxable. The classification depends largely on how and why the benefit was given to the employee. In reference to the examples noted above, scholarships and insurance are likely to be taxable. A discounted gym membership is less likely to be a taxable benefit, but it would depend largely on the form in which you deliver it to employees.

Once you’ve determined that a benefit is taxable, you must determine its value. Calculate the fair market value of the benefit –a price that could be garnered for the benefit in an open market if one individual were to sell it to another. The actual cost to you for the benefit may play a role in this calculation if it accurately reflects fair market value. You may also have to include the goods and services tax/harmonized sales tax and the provincial sales tax. Review T4130 Employers’ Guide – Taxable Benefits and Allowances to determine when to include these taxes. The amount of the GST/HST you include in the value of the benefit is based on the gross amount of benefits before taxes and before you subtract any reimbursements made by the employee.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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