Ask the ExpertReimbursing for Gym memberships and other fitness initiatives
hri_Admin Staff asked 4 years ago

Hi,
I am in Manitoba. If we decide to reimburse employees for gym memberships or fitness equipment (up to a certain amount) is this a taxable benefit for them?

2 Answers
Glenn Demby Staff answered 4 years ago

I think so, but I need to check with my payroll expert. I assume you’re talking about federal income tax law. If not, drop me a note at glennd@bongarde.com

Glenn Demby Staff answered 4 years ago

Here’s Alan’s reply:
The short answer is that paying all or a portion of an employee membership in a gym IS a taxable benefit. However, there are two key exceptions:
One is if the employer holds the membership, paying a fee to the gym that provides access to all employees. This is equivalent to the employer providing the gym facilities directly, which is not itself a taxable benefit.
The other is if the employer can clearly demonstrate, i.e. prepared to defend itself to the CRA, that it’s the employer who primarily benefits, i.e. at least 50%. This can happen in several different ways. The employer benefit might be sales related, such as networking and business development, or it could be part of a wellness program, with a demonstrated impact on employee absences, use of extended health benefits, etc.

Serena Traa replied 4 years ago

Thanks so much!

Serena Traa replied 4 years ago

Thanks so much!