PROFESSIONAL MEMBERSHIP DUES
Professional membership fees are payments made to maintain membership in organizations that support professional credentials or trade qualifications. These fees may be deductible under certain conditions, depending on whether they are paid by the employee, employer, or self-employed individual.
Deductibility for Employees
- Eligible Deductions: Employees can deduct annual membership fees if:
- The membership is a condition of employment.
- The fees are not reimbursed by the employer.
- The membership maintains a professional status recognized by Canadian or provincial law.
- Non-Deductible Fees: Initiation fees, licenses, and special assessments do not qualify as annual membership dues.
Employer-Paid Membership Dues
- If an employer pays for an employee's membership dues, the taxability depends on the purpose:
- Non-Taxable: The dues are non-taxable if the membership is necessary for the employee's job, and the employer is the primary beneficiary.
- Taxable: The dues are taxable if the employee is the primary beneficiary and the membership is not required for the job.
Non-taxable dues reimbursed by an employer cannot be claimed as deductions by the employee.
Deductibility for Self-Employed Individuals
- Self-employed individuals can claim deductions for:
- Membership dues related to their profession or trade.
- Subscriptions to professional journals and publications.
- Membership dues for clubs engaged in dining, recreation, or sports are not deductible.
Reporting Requirements
Employers must include taxable membership dues in the employee's T4 slip under the appropriate income section. Non-taxable reimbursements do not need to be reported.
Recent Updates
- As of 2024, changes to Chartered Professional Accountants (CPA) membership structures in Ontario and Quebec allow members to opt for separate memberships with CPA Canada, subject to a fee of $195.
