An employee was on extended sick leave but nonetheless received remuneration from the payroll service, which was not informed of the leave. On the employee's return to employment a number of years later, the error was discovered, and it was agreed that the overpayments would be repaid over a period that straddled two calendar years through deduction from the employee's post-return remuneration. CRA stated (TaxInterpretations translation):
[T]he fact that the employee reimburses the overpayments gradually does not constitute a non-interest bearing loan. Accordingly, the employer should not calculate a taxable benefit for imputed interest.