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Employee Parking Taxable Benefit

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Business  -> Automobiles, Passenger Vehicles and Motor Vehicles  -> Automobile Taxable Benefits -> Employee Parking

Employee Parking Provided by Employer

Income Tax Act s. 6(1)(a)

When parking is provided by an employer to an employee, the fair market value of the parking, less any payment by the employee for the parking, is generally a taxable benefit to the employee.  The benefit amount should be included in income when payroll deductions for income tax, Canada Pension Plan (CPP) and Employment Insurance (EI) are calculated, and is included as employment income on the T4.

There are situations in which parking may not be considered a taxable benefit, such as:

bulletThe employee requires an automobile to commute to work daily, because of a physical disability that limits mobility
bulletThe parking is generally available free of charge to both employees and the general public, such as in a shopping centre or industrial park.
bulletThe parking provided is scramble parking - this means there are fewer parking spots than there are employees wishing to use a spot, and the spaces are available on a first-come, first served basis.  There must be significantly fewer spots than employees desiring a spot.
bulletThe parking is provided for business purposes - the employee is regularly (on average 3 or more days per week) required to use a vehicle in the performance of his or her job, such as travelling off-site to meetings or service calls.

The taxable fair market value of the parking spot is generally the market price for a similar spot in the surrounding area.  Therefore, if a similar spot in the surrounding area is free, there is no taxable benefit.

If the employer provides certain employees with reserved spots, this would probably be considered a taxable benefit.

Other Resources

All topics related to vehicles and business

Canada Revenue Agency (CRA) Resources

Podcasts: Episode 3 - Parking as a Taxable Benefit

Parking - has a questionnaire to help you determine if an employer-provided parking spot is a taxable benefit.

Tax Tip:  Make sure you know the tax status of your parking privileges!

Revised: September 19, 2017

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