# Getting taxed on per diem



## chrishelms

Hey guys,

qucick question:
Our company is putting our per diem (50$) on the pay stubs, so this year I got taxed on all my per diems which is around 30 days.

Is there a way to claim that money back?


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## carverman

chrishelms said:


> Hey guys,
> 
> qucick question:
> Our company is putting our per diem (50$) on the pay stubs, so this year I got taxed on all my per diems which is around 30 days.
> 
> Is there a way to claim that money back?


Unless you have a special per diem case (accommodation in a motel while performing work for your company), most per diem payments are intended for food, and such expenses as taxis to get to and from your temporary place of work and AFAIK are not considered a tax deduction by CRA.

You could pocket that$50 per day and make your own bag lunch, eat breakfast at your hotel and charge that to your room,etc, so that per diem is considered taxable...unless you have an understanding with your employer that that per diem is intended solely for meals and taxis, (if the company does feel you need to rent a vehicle to get to the job site).

I used to work for Bell Northern Research/Nortel and when on a remote job site, I was paid per diem, but had to include daily meal expenses, itemized on a daily basis to submit with the accommodation and travelling expenses. This way, my per diem allowed for meals was not taxable. I took taxis to the down town Bell switching exchange as there was no
parking provided for a rental vehicle. 

Of course,it was based on the honour system..if you decided to go into a bar and drink away that $50,which was not intended for alcohol or entertainment( theatre admission), that came out of your pocket. 

FROM CRA:
http://www.cra-arc.gc.ca/travelcosts/

*Meal expenses*
If you choose the detailed method to calculate meal expenses,* you must keep your receipts and claim the actual amount that you spent.*

If you choose the simplified method, you can claim in Canadian or US funds* a flat rate of $17/meal, to a maximum of $51/day (sales tax included) per person, without receipts.* Although you do not need to keep detailed receipts for actual expenses if you choose to use this method, *we may still ask you to provide some documentation to support your claim.*


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## chrishelms

thanks for the reply, carverman!
My employer doesn't really care if you drink you per diem away (fortunately)
I guess my question is more:
Since the per diem ended up on the pay stub as an item, I assume it got taxed as income. Is that legal?


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## Mukhang pera

I would expect you to have your 2015 T4 in hand by now. I would expect it to shed some light on what got reported as taxable income.

Anyway, it appears from the info provided by carverman, you can claim $51/day for meals, which exceeds your per diem. So, if it appears that it WAS taxed, claim the deduction when you file 2015 taxes and get a refund. 

If the CRA grabbed some tax off your per diem allowance, I would not get too exercised trying to answer "Is that legal?" Telling the CRA that it has acted unlawfully is not likely to do you a lot of good. If the employer has improperly reported it and withheld tax, maybe you could take it up with whoever does the payroll. But it seems, in any case, you ultimately will not pay tax on it.


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## OhGreatGuru

If your per diem is being included in your pay cheque, then of course it will show up on your pay stubs. Whether or not it is being treated as a taxable allowance will show up on your T4 - but if you want clarification ask your Pay & Benefits office.


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## chrishelms

Thanks so much for your replies. I have my T4 in front of me but can't find out if it is treated as taxable allowance. Only three lines have numbers different to my income: CPP contributions, deducted income tax and EI premiums.
So I guess my per diems just have disappeared into my Income tax... Sucks being taxed on my per diem but I guess thats the way it is..


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## Davis

I got paid salary by my employer and used it to buy my lunch and dinner. And I got taxed on the salary, so I guess we're even.


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## twa2w

You should get a form t2200 from your employer. It is called a declaration of conditions of employment.
It should layout evetything you need.


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## OhGreatGuru

chrishelms said:


> Thanks so much for your replies. I have my T4 in front of me but can't find out if it is treated as taxable allowance. Only three lines have numbers different to my income: CPP contributions, deducted income tax and EI premiums.
> So I guess my per diems just have disappeared into my Income tax... Sucks being taxed on my per diem but I guess thats the way it is..


Based on what you have said, I don't think you can come to that conclusion. If your per diems are non-taxable they would not even show on your T4. You would have to compare the total taxable income on your T4 with the totals of all your pay slips to see if they included the per diems or not. Which is why I think it would be easier to just ask your Pay & Benefits for an explanation.


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