The following principles determine eligibility and reimbursement amounts or travel allowances for travel expenses incurred by rostered ministers serving one or more congregations in a full-time, part-time, multi-point parish, interim or supply basis:
1. Rostered ministers who are required to travel as part of their work shall be reimbursed for travel, meals and accommodations. Compensation options specific to an minister’s vehicle are as follows:
- Vehicle Expenses KM Rate Paid – When the rostered minister is required to use their own vehicle, a per kilometer rate as set by CRA may be paid. The rate is specified for the first 5,000 km driven and then at a reduced rate on km driven thereafter for the balance of a calendar year. These amounts are updated annually and can be found on the CRA website.
- Vehicle Allowance – When the rostered minister is required to use their own vehicle, the employer may provide a flat annual amount for the cost of using the vehicle. This is a taxable benefit to which income tax, CPP and EI deductions apply.
2. All travel incurred on congregational business must be logged by the rostered minister. If the rostered minister is receiving payment under #1a above, a copy of the log must be provided to the congregational treasurer prior to receiving payment. If the rostered minister is receiving payment under #1b above and/or planning to claim an income tax deduction for travel, the log is retained by the rostered minister for use when filing their income tax return.
3. Travel between a rostered minister’s home and his/her primary place(s) of employment is considered personal driving and is not eligible for reimbursement on a tax free-basis, in accordance with CRA requirements.
In those situations where travel reimbursement on a tax-free basis is not permissible, a travel allowance based on an estimate of mileage may be negotiated between the congregation and the rostered minister. This approach may be advisable in situations where a rostered minister is serving one or more congregations on an interim or supply basis where significant travel between home and these congregations is required.
This travel allowance is a taxable benefit to which income tax, CPP and EI deductions apply. The rostered minister is responsible for determining whether this allowance is eligible to be claimed as a deduction on their income tax return, based on information provided by the congregation on the T2200 Declaration of Conditions of Employment form (see below) and CRA guidance (refer to Automobile and Motor Vehicle Benefits and Allowance).
4. Group Pension and Group Benefits are not paid on compensation for travel.
Regardless of whether a rostered minister is reimbursed for travel expenses (refer to #1a above), receives a travel allowance (refer to #1b above) or receives no reimbursement or allowance, the congregation should provide the pastor with a completed T2200 Declaration of Conditions of Employment form.
If a travel allowance is provided (refer to #1b and #3 above), the congregation must issue a T4 to the rostered minister indicating the amount of the travel allowance in Box 14 “Employment income” and in the “Other information” area under code 40 at the bottom of the T4 slip.
Note: Normally an “employer-employee” relationship exists between the congregation and the rostered minister serving that congregation. This applies even in the case of a rostered minister serving in a supply capacity.