Reimbursing employees for home office equipment can be done non-taxably in certain situations. The CRA allows for specific work-from-home (WFH) reimbursements to be tax-free, under the right conditions.
What qualifies as non-taxable?
Employers may reimburse up to $500 in total per employee for home office equipment without triggering a taxable benefit, provided that:
The employee is required to work from home; and
The equipment is necessary to perform their job and primarily benefits the employer.
Examples of eligible items:
Computer monitors
External keyboards or mice
Office chairs or desks
This is a lifetime maximum of $500 per employee, not per year or per item. Anything beyond this cap becomes taxable.
What qualifies as taxable?
Reimbursements over $500 in total
Equipment purchased for personal preference rather than business need
Items that are not essential for performing job duties