• July 28, 2023 at 13:48

    Does anyone have experience with administering the payroll side of this type of plan?
    I believe it requires: setting up taxable benefit for the difference between the stock price and the employees’ discounted price on the purchased stocks; a deduction code for collecting the employees funds to purchase the stock; and a refund code if employee terminates before purchasing stock and needs to be refunded for unused deductions toward purchase. Tax form reporting is Box 14 and 38 on T4 and Box A and L for RL-1. Is there anything else that is required or that I may have incorrect?

  • August 5, 2023 at 01:06

    Cathy, I worked with share purchase plans many years ago and your steps above sound reasonable. What I might do is talk to your internal finance tax/audit department for their interpretation of the CRA rules. I sometimes talked things like this over with external auditors if you are comfortable with that. You can always reach out to CRA or NPI infoline if you have a specific question.

    • August 10, 2023 at 11:58

      Thanks Kathryn and yes, we have been having meetings with finance and our tax department so everyone is on the same page.

  • August 11, 2023 at 12:53

    Hi Cathy,
    I also worked with share purchases. You are right; you will be selecting a taxable benefit for the difference between the stock price and employee purchase. Your steps are correct.

  • August 16, 2023 at 22:05

    Hi Cathy,
    Your set up sounds fine. The suggestion I have is to make sure your refund code will work without the employee getting paid a pay. Sometimes you will find you make need to do a refund after termination when there is no pay.