Business Cellular Phones & Taxable Benefits: What You Should Know

If your employer provides you with a cell phone or pays for your mobile plan, it’s important to understand how the Canada Revenue Agency (CRA) views these perks. Depending on how the benefit is structured and used, it may be considered taxable income and show up on your T4 slip.

 

Cell Phone Plans: When Are They Taxable?

Not Taxable

According to CRA’s administrative policy, a cell phone plan provided or reimbursed by your employer is not taxable if all the following conditions are met:

  • The plan is reasonably priced based on your job requirements.

  • The plan is required for your employment duties.

  • Personal use is minimal and incidental.

 

Taxable

The benefit becomes taxable if:

  • There is excessive personal use of the plan.

  • The plan includes features not necessary for work (e.g., premium entertainment packages).

  • The employer provides a flat allowance for phone services — allowances are always taxable.

If personal usage leads to extra charges beyond the base plan, those charges are taxable unless the employee reimburses the employer.

 

Cell Phones (Devices): What Counts as a Benefit?

If your employer gives you a phone (e.g., a new iPhone) and:

  • You can use it freely for personal purposes, or

  • You get to keep it permanently,

Then the fair market value (FMV) of the device is considered a taxable benefit. This amount must be reported on your T4 slip.

Example: If you're given a phone worth $1,200 to keep, that $1,200 is added to your taxable income. However, if the employer retains ownership of the phone and it’s used primarily for work, it’s not taxable.

 

Other Employer-Paid Fees: Dues, Memberships & Subscriptions

CRA also has specific rules for professional dues and memberships paid by employers:

Not Taxable - If the membership:

  • Is a condition of employment, or

  • Clearly benefits the employer more than the employee

Taxable - If the dues:

  • Are not required for your job, or

  • Primarily benefit you personally (e.g., networking or career advancement),

Then the amount paid is considered a taxable benefit and must be included in your income.

 

Need Help Navigating?

Understanding what’s taxable and what’s not can be tricky — especially when it comes to employer-provided perks.

If you're unsure whether a benefit you've received should be reported, feel free to reach out. We're here to help!

Stephen Aubert CPA