In an April 26, 2016 Technical Interpretation (2015-0623571I7, Waugh, Phyliss), CRA opined that where an employer provides a payroll advance to an employee in respect of their future earnings, the amount is not generally considered to be a loan. A salary advance is a payment for salary, wages or commissions that an employee is expected to earn in the performance of future services. These amounts are generally included in the employee’s income under Subsection 5(1) in the year the advance is received.

For further information see Video Tax News Monthly Tax Update Newsletter, Issue No. 424