(A) Employment income ITA Reference
Salary — gross $ 80,000 5
Group term life insurance 250 6(1)(a)
Trip to Europe 6,000 6(1)(a)
Income protection payments ($12,000 – $2,300) 9,700 6(1)(f)
Stock option benefit (1,000  ($4.50 – $2.00)) 2,500 7 $ 98,450
Less: Registered pension plan $ 5,500 8(1)(m), 147.2(4)(a)
Professional fees 800 (6,300) 8(1)(i)
Employment income $ 92,150
(B) (i) Private health plans such as those offered by Sun Life and Liberty Mutual are statutory exemptions [par. 6(1)(a)]. In addition, Health Services tax levies, such as those in Manitoba, Ontario, and Newfoundland, are not taxable benefits.
(ii) Membership fees paid by the employer for social clubs may not be included in the income of the employee if the membership was principally for the employer’s advantage rather than employee’s [IT-470R, par. 34].
(iii) There is no stock option benefit when the option is granted. The sale of shares in December results in a capital gain of $0.50 per share (i.e., $5.00 – $4.50), which is not employment income.
(iv) Registered retirement savings plan — Subdivision e, not Subdivision a deduction.
(v) Legal fees — tax assessment — Subdivision e, not Subdivision a deduction.
(vi) Income tax not deductible — Subsection 8(2).
(vii) Charitable donation — Division E tax credit,
(viii) CPP contributions and El premiums are tax credits deductible under Division E.
(C) GST rebate
13/113 of professional fees (13/113  $800) $92
Par. 6(8)(c) employment income inclusion in year of receipt of rebate $92

He would also be able to claim an HST rebate on the legal fees (13/113  $1,900 = $219) had this expense been deducted in arriving at employment income. However, legal expenses incurred in appealing an income tax assessment are deductible under paragraph 60(o) and not from employment