On an April 17, 2019 Technical Interpretation, CRA was asked whether clothing reimbursements paid to maintenance employees were taxable benefits.  Employees were not required to wear specific uniforms and were reimbursed based on receipts, to an annual maximum.

CRA referred to Guide T4130 Taxable Benefits and Allowances, which states that clothing is generally a personal expense, except where either of the following applies:

• the employee is required to wear a distinctive uniform while carrying out their employment duties; or
• by law, the employee has to wear protective clothing on the work site.

In the situation reviewed, CRA indicated that reimbursements for safety footwear would not be taxable; however, other reimbursements to compensate for increased wear and tear on clothing would be taxable.

Similar to clothing reimbursements, an employer’s direct provision of work clothing, that does not meet the criteria above, would be taxable.