Are Credit Card Rewards Taxable in Canada? CRA Rules
Do you have to pay tax on credit card points, cash back, or travel rewards in Canada? Here's what the CRA actually says — and what most Canadians get wrong.
The short answer: credit card rewards on personal cards are generally not taxable in Canada. The CRA treats points and cash back earned on personal spending as a discount on purchases, not as income. But there are important exceptions — especially for business use.
Personal Cards: Generally Tax-Free
Cash back earned on a personal credit card is not considered income by the CRA. Travel points (Aeroplan, Scene+, MR) redeemed for personal travel are also not taxable. Welcome bonuses, while technically a "benefit," have not been assessed by the CRA as taxable income in practice. The CRA's 2010 guide (Technical Interpretation 2010-0373321I7) concluded that loyalty points earned on personal purchases are generally not income.
Business use exception
If you use a personal or business card for employment expenses and your employer reimburses you, the points earned on those reimbursed expenses may be considered a taxable employment benefit. CRA has been known to audit this scenario.
When Business Card Rewards ARE Taxable
If you use a business credit card and your corporation pays the bill, points earned belong to the corporation — not you personally. Using corporate points for personal travel is a taxable benefit that should be reported as income. The value is typically the fair market value of the redemption. Small business owners who use personal cards for business expenses (and keep the points personally) are in a grey zone — consult a tax professional if significant amounts are involved.
Cards Mentioned in This Article
American Express Cobalt
American Express · Amex
Earn 1,250 Amex MR/month for 12 months (15,000 total)
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