Taxable benefits
 

I wonder if anyone can help.
My husband has just taken a job running 2 apartment buildings in Richmond Hill. He is earning $30,000 per year before taxes. With the job comes a 3 bedroom, 2 bathroom, air conditioned apartment, but I have been told that is a taxable benefit. Can anyone explain to me what this is and what salary should he be looking at after all this has been taken into account. Hope somebody can help us. Thank you :(

Re: Taxable benefits
 

* Richmond Hill, Ontario

Re: Taxable benefits
 

The location isn't really relevant although there are Provinces with lower income tax rates. I think it works as follows:-
Basically the "free" rent is considered by Canada Revenue Agency (CRA) as income and as such he will be taxed on the annual amount or, at least, a portion of it. If it's considered to be worth, say $1500 monthly, then his total income for income tax purposes would be $48,000 per annum.

Re: Taxable benefits
 

So will he have to pay the rent and then claim the tax back. Oh this is so confusing. This isn't a very well paid job really then is it :huh:

Re: Taxable benefits
 

No, I think it means he'll have to consider what the rent would have cost as income when it comes to filing his taxes. So he'd be paying tax on salary+rent, not just salary.

Re: Taxable benefits
 

It is not quite like that.

In Ontario a person with earnings of $30,000 pays $5,591.75 in tax, CPP and EI. I.e. they end up with $24,408.25 to spend.

If the taxable benefit is assessed at $18,000 a year (though that seems high to me) then the person has tax and CPP deducted as though they were earning $48,000. The total deduction would be $10,935.75 and the person would be left with $19,064.25 to spend.

Re: Taxable benefits
 

Thank you for your help in trying to understand this. I think he needs to look for a better job, before we follow him out there :confused:

Re: Taxable benefits
 

I think you're right. Sorry.

$1500 a month Jonboy, isn't high for a 3-bed apartment in Richmond Hill I'm afraid.

Re: Taxable benefits
 

Thank you Novacastrian, I see that you are in Richmond Hill, what is like?

Re: Taxable benefits
 

If I have worked this out right does that mean his pay will only be $734 per two weeks. Will he have to pay for medical insurance? The reason why I ask that is because he has to take medication for his thyroid problem. In the UK his medication was free, however not sure how it works over there, will he have to pay for his prescriptions??? Oh so many questions, sorry :confused:

Re: Taxable benefits
 

On this point alone, I'd think twice about taking a low paid job that comes with free, but taxable accomodation. If you don't have a prespcription drug plan through his employer, then you will be entirely responsible for medication costs and they are going to be pricy. No flat fee NHS prescriptions here.

Re: Taxable benefits
 

There is no medical insurance to pay other than the Health Premium collected by the Provincial Government. Given his income it will be a minimum amount and deducted at source. Medications outside a hospital are not covered. IIRC, you have children. You should be aware that dental costs are not covered here unless under an employer funded plan, nor is eyewear and eye tests.
If you and your children do come you should arrange medical coverage insurance for the three month period before the Government plan kicks in.

Re: Taxable benefits
 

Oh geeze, this doesn't sound good. Our 14 year old is waiting for braces fitted on his teeth, our youngest son (12) is diabetic, insulin dependent. Does this mean they won't be covered either. Thats the one thing that we take for granted here! So when you say medication outside the hospital, that tells me that unless there is plan through the employers we will have to pay for my sons dental work, my sons insulin, blood testing kit and strips, needles and my husband will have to pay for his medication. I think I am glad I am still in the UK with my sons :unsure:

Re: Taxable benefits
 

Fraid so, no provincial coverage for insulin or braces etc.

Unless you can get a job with extended benefits of course.

Even then I'm not sure how it would work with "pre existing conditions". Perhaps someone in that situation could advise.

Re: Taxable benefits
 

Good in parts. :)

If you have any specific questions I could help with then feel free to PM me. I'd be happy to assist.