Paying for Flu Vaccination

Flu shots given at work or with a voucher aren't hit with fringe benefit tax (FBT) since they tackle a workplace health and safety risk.

But there's a hiccup: If an employee pays for their flu shot and gets reimbursed by their employer, that reimbursement gets taxed as income (PAYE). That’s because health expenses are seen as personal.

This mix-up is because the FBT rules and reimbursement rules don’t really align, which often confuses employers.

A new section of the Income Tax Act is being proposed to fix this issue. It will make sure employers aren't penalized for reimbursing employees for flu shots by making such reimbursements tax-exempt for employees.

The proposed change will take effect starting in the 2025-26 tax year.

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