Hospitality and Events Held by Businesses in Canada

Under the CRA's administrative policy, a free party or in-person social event provided by an employer is considered a non-taxable benefit if all of the following conditions are met:

Non-Taxable Events

The event must meet the following criteria to be considered a non-taxable benefit:

The event is open to all employees (which may include a branch or division, depending on the situation).

The cost of the event is $150 or less per person (including taxes).

This includes spouses or common-law partners.

Ancillary costs (e.g., transportation, taxi fares, or overnight accommodation) are not included in the $150 limit.

The total number of employer-paid social events (both in-person and virtual) does not exceed six per year.

If these conditions are not met, the event becomes a taxable benefit.

Taxable Events

If the total event cost (excluding ancillary costs) exceeds the $150 limit per person, the entire amount becomes taxable. For taxable events, the ancillary costs and the cost of attendance for a spouse or common-law partner must be included in the employee's income.

Hospitality Functions

A hospitality function refers to a work-related event where you provide a meal or other hospitality services, but it is not considered a social event. Examples include team-building lunches, motivational sessions, planning meetings, education, and networking events. The benefit is not taxable if all of the following apply:

It is part of a work-related event (such as a planning, education, or networking session), and the employer is considered the primary beneficiary of the benefit.

The event is not to celebrate the completion of a project or task, or as a "thank you" for a job well done.