Question

Understanding the difference between a cash taxable allowance, a cash taxable benefit and a non-cash taxable benefit is critical when explaining the calculation of net pay to an employee. In your own words, explain whether each allowance and benefit is or is not subject to Canada/Québec Pension Plan (C/QPP) contributions, Employment Insurance (EI) premiums, Québec Parental Insurance Plan premiums and income tax. Provide an example of a cash taxable allowance, a cash taxable benefit and a non-cash taxable benefit.

Answer 1

Given data Ondes standing the dibbesence bet ween a cosh taxa -6ke allouance. a cash taxable benefit and a non Cas h tarable enifits is csiticau ushen explaning the Calcuatio- o net pouy to an employee ACash tazable allowance usually an amount that Paie by emplo yeen to employee for a specibic Purspo se fos in addition to sa larEy Od wages usualY To help the emplogee fos centain cpenscS wnthout cnoung the actual Cost An al 0 wance such as caro al1owances calculated based on distance droiven Cosh allowances ase considesed taxabie income to the Cmployee ire wages and salasies. The empoyee can then cloim emeloyment-e lated eze nSes augainst the incsease in income A cash taxble ene fit is g00dS 0 seovfces that em0 yes pays to theis employecs o theis famiy the Such asrent- fee accommodation oonee empsoyes

A benefit includes an allbwance os a Teimburosement ob employee s expen ses e Pesonal in natuTe. SA cash tazoble bene fits ase one tape c6 emU ne Toution Subgect to auébec Parsenta insuoance Plon" Psemiums (aPIP) Québec Paroental insusonce Plan 20 6uetec, the Pla is knoon as the auekec Parsental DOsugance Plon The Plan Poovidles motesnity Patesnity, Porsen'ta and adoption berefits to 2ualified tapayess Taxable berefits and taoble alloucon ces includedin soss employ ment income fos calcu lation the canodaauébec fension plon(ape) co ntoibutions Quevec Pension plan aPP The auebec Pension Plan (app)is a compul sOoy Public insuoance Psan Dt Poovieles Peepie eho wo o have wOTEed in auebec and their families ut kasic inancias Pootection in the even d retioement deoth os disa bility,

(3 sf non- taxable berefit is Paid b the employes. te genesal suie s that noEmPloyment insusance tEI) Psemiums ase due and sefos ting needed on the epon ting on the RoeRetuon on eguity) Employment Tnsuoance T): e is an unemloyment insunance Poogoam s caadio that allaus individuals Loho have se.centy Dost aob to seceive temposeny financias assisance Returon oo Eqity:- measute finondol Pesfoomonce RO E is o Shareholdes s eguit diviaing net income Calulated Because sharehoidess equity is ewal to a Company's assets minus ts deot. ROE Ceuld ke thought d as the Retursn on net ossets. A noO taxable benefit selated to o Public tsasit foss O a PoTo toansit PoSS os a Paoatoonsit Pass segoI to which employes geimbursse an amount to an emPloyee This Pass that provided to the employee is not SUkject to aPIP (Quebec Pasental nsuance Plan Premiums