Employees, who are required to use cell phones in the performance of their duties and to have their cell phone contracts approved by the employer, but bear the monthly costs of the contracts personally. However, the employer pays each a fixed amount based on the particular requirements of each employee not in excess of their costs. The employees do not systematically provide copies of their invoices, but are required to retain them for possible future inspection. CRA stated (TaxInterpretations translation):
Given that you do not require detailed receipts…the monthly payments to your employees for using their personal cell phones required in the performance of their employment do not constitute a reimbursement of expenses. …[T]he monthly payment constitutes an allowance. Consequently, the monthly payment must be included in computing the income of the employee… .