Introduction
This manual provides a straightforward guide on handling the taxable benefits associated with the Tedy platform. It explains the responsibilities of both employers and employees in terms of tax deductions and reporting.
Taxable Benefits (LSA)
For the Employee:
Taxable benefits from Tedy are considered as salary.
These amounts are added to the total annual salary and must be reported on the T4 as earnings.
For the Employer:
Employers are responsible for deducting the appropriate tax portion from the taxable benefits every month.
These deductions should be managed similarly to regular salary deductions.
Reporting Process
1. Monthly Deductions:
Employers must deduct the tax portion from the employee's Tedy benefits monthly.
Tedy provides automated usage reports to ensure accurate tracking of funds used by employees.
2. End-of-Year Reporting:
The amounts reimbursed through Tedy must be reported on tax forms.
Québec (RL-1): Use Box A and Box L.
Federal (T4): Use Box 14 and Box 40.
Report the amounts reimbursed, not the amounts allocated.
Steps for Employers
Set Up Tax Codes:
Communicate with your payroll software provider to add a taxable benefit code for Tedy amounts.
Deduction Allocation:
Distribute the total annual Tedy benefit amount across the number of pay periods within the year.
Adjust these amounts based on actual reimbursements at the end of the year or when an employee leaves.
Report Adjustments:
Regularly adjust the taxable benefit amounts in the payroll system based on Tedy's automated reports.
Ensure all tax withholdings and employer contributions are calculated and remitted before year-end.
End-of-Year Reconciliation:
Before the end of the year, or when an employee leaves, reconcile the reported amounts to match the actual reimbursements.
Ensure the final amounts are accurately reflected on the year-end tax forms (T4 and RL-1).
Important Considerations
Employers must ensure tax withholdings and employer contributions are deducted and remitted in a timely manner.
Consulting with a tax specialist or the appropriate fiscal authorities is recommended to ensure compliance with all tax regulations.
Regularly use Tedy's real-time reports to stay updated on the reimbursements made to employees.
Conclusion
By following this guide, employers can efficiently manage the tax implications of using Tedy, ensuring compliance with all relevant tax laws and providing clarity for both the employer and employees.