Are Air Miles Taxable?

About the Author: Wilson Wong & Associates, are Chartered Accountants in Calgary providing tax and accounting services to small and medium sized businesses and high networth individuals.

Everybody likes to bank frequent flyer miles, or some sort of reward points program. If you're a business owner you may find that your business expenses are also contributing to your accumulation of points.

Technically these points are taxable benefits if you are using your business expenses to earn miles. However, CRA will generally not tax an individual for these points related to business expenses if they are not convertible to cash or if it was not intentionally done as part of your compensation. If you're using a company credit card then you may possibly have a situation where your points are taxable.

If you have a taxable situation then you should report the benefit on your T4 as a taxable benefit, which will trigger CPP and EI as well if this is for your employees. Not fun or easy to track and figure out. Give us a call to talk about how to treat your airmiles

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