Finance Advisory: Gift Cards Redeemed in Applause
Please note that your recent pay stubs might show a new “Applause” item. This is because the Canada Revenue Agency (CRA) has made changes affecting how certain rewards are taxed. Amazon gift cards, pre-paid Visa, and pre-paid MasterCard are now considered “near cash” and are taxable from the first dollar. This is because the CRA sees a lot of flexibility in using Amazon gift cards, categorizing them as “Near-Cash.”
Please be aware that if you redeem points on Applause for a “near-cash” item, like a Pre-Paid Visa Card, Pre-Paid Mastercard Card, or Amazon gift card, this item will be taxable from the first dollar. This taxable amount will be included on your T4.
However, if you redeem points for items or other gift cards specific to a merchant/retail store or group of merchants/retail stores, the CRA considers them “Non-Cash.” This means only point redemptions over $500 (the CRA limit) are considered taxable benefits, and they will be included on your T4.
It’s important to note that Circle of Care must comply with the CRA, and we cannot provide tax advice. If you have specific tax-related questions, it’s recommended to consult with your tax advisor.
Questions: For questions regarding how the redemption of points will impact your payroll, you can contact the Payroll department at payroll@circleofcare.com or HRDept@circleofcare.com.