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

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.