Tax-free money for employees?

Can giving tax-free money to your employees solve recruiting challenges? Maybe in the case of short term projects where you can’t find local candidates. But otherwise, almost all tax dodges end in heart/wallet ache.

Canada Revenue agency allows for Tax-Free Living Out Allowances under special circumstances. It’s basically when an employee has to work in a place far from their principal residence, for a defined period of time: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/benefits-allowances/boarding-lodging/board-lodging-transportation-special-work-sites.html

Theoretically one can pay an employee $15 an hour plus $19 an hour tax-free ($157 loa divided by an 8 hour day). The treasury department lays out some good guidelines:https://www.njc-cnm.gc.ca/directive/d10/v238/s659/en.Basically, $50 a day for accommodation and $107.40 for meals.

Remember, this will not work for camp jobs where food and accommodation are provided. Only in places where food/accommodation have to be paid for by the employee and if they still maintain their home residence which is far enough away that they can’t commute. As always, check with your accountant and then double check!


Kael Campbell is President and Lead Recruiter of Red Seal Recruiting Solutions, a company providing recruitment services in mining, equipment and plant maintenance, utilities, manufacturing, construction, and transportation. When he is not recruiting, Kael spends as much time as possible with family in the great outdoors and on the water. He volunteers his time as a Board Member of the Entrepreneurs Organization of Vancouver Island. You are invited to subscribe to our employer newsletter or submit your resume.

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