#603: Canada Wants to Tax Your Staff Discount

Canada Wants to Tax Your Staff Discount

Record store employees! Have you heard? Now the Canada Revenue Agency wants a piece of your staff discount.

According to CTV, “when an employee receives a discount on merchandise because of their employment, the value of the discount is generally included in the employee’s income.”  They will calculate the tax by using the “equal to the fair market value of the merchandise purchased, less the amount paid by the employee.”   That is unless the discount is “available to the public or a segment of the public, at some point during the year.”  Those car deals where you “pay what the employees pay” wouldn’t count as a taxed staff discount, which is good for people who work at dealerships.  CD stores generally don’t have a “staff discount sale”.

Let’s say, just like when I was working in the Record Store, an $11.99 CD gets sold to you at the discount price of $7.99. The government now wants to tax you on the $4 discount that was the only perk of a crappy retail job.

I used to buy several CDs a week.  Let’s say for the sake of conservative estimates that I bought three CDs a week with my discount.  Let’s take the same $4 discount used in the example above, with Ontario’s 13% sales tax.  That’s $0.52 of tax now added.  $0.52 per CD on three CDs a week, multiplied by 52 weeks:  That’s $81.12 a year of brand new taxes, enough to buy several albums instead.

Conservatives are accusing Prime Minister Justin Trudeau of exploiting Canadians who can least afford it. Lisa Raitt, Conservative Deputy Leader, said the government is “picking the pockets of minimum wage earners.” Finance critic Pierre Poilevre says the tax will “target those who can least afford to pay more”. Other commentators have noted that staff discounts will need to be rigorously tracked for taxation.

It is true. At the Record Store, a manager would simply ring in the staff sale with discount. Now, copies of receipts will have to be kept, filed and forwarded to Payroll, with the original price and discount.  This will cost businesses time, but they will have no choice but to comply with whatever law takes shape.  All paperwork would have to be kept in case of audit.

If this goes through on January 1, it will stink to high heaven.

Staff discounts on a CD, or a pair of shoes, or a meal are part of the perks of working a thankless job. It’s something people can look forward to. Celebrate passing your three month probationary period with a discounted purchase.

Who is going to pay this tax, the employee or the employer? It will hurt both regardless. Employees may have to stop taking advantage of discounts and just buy less from their places of work.  Some people only buy non-essential luxury items from work (like CDs), but what about those who get a staff discount on necessities?  That’s a part of their shrinking budget.

Canadians are tired of being nickel and dimed to death with taxes. It’s hard enough making ends meet, and this tax goes after something previously held sacred. It’s not good for Canadians and we certainly hope it does not come to pass.

UPDATE:  Feds are now denying this story and say there’s no such tax coming.   Hmmm.



  1. Wouldn’t they already be collecting tax on your purchase? If you buy the CD at $7.99 wouldn’t you just pay 13% of the $7.99 instead of 13% of the $11.99? I’m not sure how it all works, but it just seems like everything would be taken care of with that.

    Liked by 2 people

  2. I would have thought the same as Zack, so this sounds odd. They want tax on the value of something rather than the sale price… surely it would be less controversial just to ban staff discounts. Bad move either way.

    Liked by 2 people

  3. I would think that with the new, ridiculously high minimum wage, and potentially this, may stores will fold up.

    They will have to overpay for unskilled labour, and will be forced to spend more time or money figuring out how to collect this tax.

    Plus, it will be harder to find employees to work in the retail sector. Many people work there for the staff discount. If that is not a bonus anymore, there will be far fewer workers in that sector.

    The other thing is, maybe stores will stop staff discounts entirely.


  4. Man, my staff discount is a main reason to love my job. But stuff’s so cheap to begin with that it really would be a few cents. I won’t worry about it if the feds are now denying it, but if it does come up it’ll be interesting to see what happens.

    Liked by 1 person

        1. Office people. Managers etc.

          My wife is a manager at store level .

          Our family friend was in a similiar role at Pharma Plus and let go aftet 25 years. I bet Shoppers follows suit.

          Get rid of full time, hire part time. Pay minimum wage. Shitty service for customer. No one to help you. No knowledge. No experience.


        2. I used to love shopping at Sears.
          3 levels with escalators, and they had an awesome wall of tv’s.
          Me and my brothers would watch tv and movies when my parents shopped.
          My parents always bought Kenmore appliances. The prices were fair and they never broke down.
          Sad to see it go.


        3. Galen Weston, president of Loblaws figures the increase in minimum wage to $15, will increase Loblaws labour wage to increase by $190 million.

          This is the side of things the Ontario government did not think of.

          I can personally see a co-relation to this and the lost jobs.


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