In a January 29, 2019 Technical Interpretation, CRA discussed the criteria for tax-exempt allowances for board and lodging received for periods an employee was working at a special work site.


To be a special work site, the following criteria must be met:

  • the work performed at the location must have been of a temporary nature;
  • the employee must have maintained a self-contained domestic establishment (SCDE) elsewhere which was used as their principal place of residence;
  • the SCDE must have been available to the employee throughout the entire time and not rented out to anyone else;
  • the employee could not have been expected to return daily to the SCDE given the distance; and
  • the work must have required the employee to be at the special work site for at least 36 hours.


In general, the employee must own or lease the SCDE and be responsible for its maintenance, alone or with other persons. However, a property that the employee neither owns nor leases may still be a SCDE if the employee pays expenses to, or for, the actual owner or tenant on a regular basis. Payments on a random or irregular basis in respect of the property would not be sufficient.


To exclude these allowances from income on the employee’s T4 slip, Form TD4 Declaration of Exemption – Employment at a Special Work Site should be completed and retained with the payroll records in case CRA would like to review it at a later date. Both the employer and employee have sections to complete in the Form.


ACTION ITEM: If planning to sell your residence because most of your time is spent at a special work site, note that your allowance may become taxable. To explore options, ensure to consult in advance.


The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions in a newsletter such as this, a further review should be done by a qualified professional.

No individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.


Marsha MacLean Professional Corporation