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May 4, 2024 · We’ll start by defining stipends and looking at the critical differences between stipends and other types of employee compensation. We’ll then explore who typically receives stipends, how stipends work from a logistical and tax perspective, and what expenses stipends can cover.
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Apr 29, 2024 · Stipends are lump-sum allowances (or reimbursements for work-related expenses) provided to individuals who pursue unpaid work to achieve goals such as expanding their learning, completing internships, and volunteering. Unlike wages, stipends aren’t direct financial compensation for specific services or hours rendered by individuals.
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May 21, 2024 · Find out what stipends are, who is eligible to receive one, and the different types of stipends to help you further your career, education, or explore a life path.
- Stock Options
- Restricted Stock
- Restricted Share Units
- Deferred Share Units
- Share Appreciation Rights
These rules apply to options granted by corporations or mutual fund trusts. Provided the stock options are granted with an exercise price at least equal to fair market value (FMV) of the optioned share as at the date of grant (which is generally the date the Board of Directors approves the grant unless the Plan provides otherwise). The tax implicat...
Restricted Stock is issued to an employee subject to forfeiture if certain conditions are not met. These awards can have adverse tax consequence and are rarely used. The employee is taxable on the value of the stock upon issuance. If the stock is later forfeited, no deduction is available to the employee. Further, no tax deduction is available to t...
RSUs that are cash-settled (or settled in cash or stock at the option of the employer) are widely used in Canada. To avoid immediate taxation, these types of awards must be designed to avoid the salary deferral arrangement (SDA) rules. The SDA rules cause the value of the amount to be taxed to the employee in the year the award is granted, not in t...
A DSU is a bonus plan that is also exempt from the SDA rules by virtue of qualifying as a prescribed plan or arrangement. DSUs have the following requirements: 1. There must be an agreement between the recipient and the employer (or related corporation) pursuant to which the recipient becomes entitled to DSUs; 2. The DSUs must reasonably be attribu...
A SAR awards the recipient with the right to receive a payment equal to the increase in share value from the date of grant to the date of exercise. The Canada Revenue Agency has administratively accepted that where the award settlement amount payout is based on increase in share value from date of grant, the award will avoid the SDA rules. SARs gen...
Post-secondary school scholarships, fellowships, and bursaries are not taxable if you received them in 2023 for your enrolment in a program for which you are considered a full-time qualifying student for 2022, 2023 or 2024.
This page describes the difference between a grant and a contribution and the different funding processes used by programs to receive funding applications.
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Are stipends taxable?
This Folio Chapter provides tax professionals and individuals with a technical overview of the Canada Revenue Agency’s application of the federal income tax rules related to scholarships, research grants and other education assistance.
