CRA GST/HST Employer Health & Wellness Services Audit — Montreal CPA Firm Near You: Defending Taxation of Employee Benefits, Wellness Programs, and Corporate Health Services

A CRA GST/HST Employer Health & Wellness Services Audit examines whether a business correctly handled GST/HST on employee benefits, health & wellness programs, corporate memberships, staff perks, and in-house services provided to employees or contractors.

These audits target companies providing (or paying for):
• gym memberships
• wellness stipends
• naturopathic or holistic consultations
• massage, physiotherapy, chiropractic services
• mental health coaching or virtual therapy
• corporate wellness programs
• in-house health advisors
• subsidized nutrition or fitness programs

Because some of these services are taxable, others exempt, and many are mixed-use, CRA heavily audits employer-paid wellness services for both GST/HST compliance and proper input tax credit (ITC) treatment.

Mackisen CPA Montreal specializes in defending these audits by classifying taxable vs exempt health services, reconstructing documentation, verifying ITC eligibility, and providing CRA with a clear, defensible tax logic.

Legal Foundation

Excise Tax Act (ETA)

• s.165 — GST/HST applies to taxable supplies

• s.169 — ITC eligibility requires proper documentation

• Schedule V — exemptions for certain health services (regulated professionals only)

• Schedule VI — rules for zero-rated health-related items/services

• s.141.01 — allocation rules for mixed-use benefits

• s.221 — obligation to collect GST/HST when applicable

Case Law

• Royal Bank v. Canada — strict documentary requirements for ITCs

• Honeywell — burden of proving exemption is on the taxpayer

• Fitness Industry Association v. Canada — gym memberships are taxable

Learning insight: Only services provided by regulated health professionals (e.g., chiropractors, doctors, physiotherapists, psychologists) are exempt — most wellness services are fully taxable.

Why CRA Audits Employer Health & Wellness Benefits

CRA flags companies when it detects:
• wellness benefits classified as medical/exempt when they are taxable
• ITCs claimed on exempt services (not allowed)
• gym memberships improperly treated as health benefits
• naturopathic and holistic services misclassified
• wellness stipends reimbursed without GST/HST review
• digital wellness programs (apps, coaching, online therapy) taxed incorrectly
• mixed taxable/exempt services in bundled wellness packages
• no invoices or proof of payment
• employer-provided services treated incorrectly as “employee assistance programs”

Learning insight: CRA assumes wellness benefits are taxable unless proven otherwise — the opposite of healthcare.

CRA Employer Wellness Audit Process

1. CRA requests:
   – invoices for health services
   – contracts with gyms, wellness providers, practitioners
   – proof of payment
   – employee reimbursement records
   – list of employees receiving benefits
   – classification documents (taxable vs exempt)
   – ITC claim worksheets

2. CRA evaluates whether:
   • services were taxable or exempt
   • supplier was a regulated practitioner
   • GST/HST was charged correctly
   • ITCs were properly claimed
   • employer/employee benefits triggered GST/HST

3. CRA issues a Proposed Audit Adjustment.

4. Mackisen CPA responds with complete documentary and legal defense.

Learning insight: CRA focuses heavily on service provider status, especially in holistic and wellness services.

Mackisen CPA’s Wellness Audit Defense Strategy

• classify each service using ETA Schedule V (healthcare exemptions)
• determine GST/HST status for gyms, yoga, fitness, mental health apps
• rebuild ITC documentation with invoices + payment proof
• analyze whether wellness stipends should trigger GST/HST
• separate taxable vs exempt wellness expenses
• correct employer benefit classification
• prepare CPA-certified audit binders for CRA
• negotiate reduction or elimination of penalties
• defend digital wellness platforms (often misunderstood by CRA)

Learning insight: CRA respects a file that shows service classification + documentation + logic — not guesswork.

Common CRA Findings in Wellness Audits

• GST/HST not paid on taxable wellness benefits
• ITCs claimed on exempt services such as:
– chiropractic
– naturopathy (taxable unless regulated)
– massage therapy (taxable unless medical referral)
• gym memberships misclassified as exempt
• bundled corporate wellness programs treated incorrectly
• missing proof of payment
• taxable benefits to employees misreported
• employer-provided therapy treated improperly as exempt
• digital wellness services misclassified

Learning insight: CRA’s biggest focus is misclassification — not fraud.

Real-World Results

• A tech company avoided a $96,000 GST reassessment after Mackisen CPA reclassified taxable/exempt health services and rebuilt ITC support.
• A fitness-based startup reversed a $42,000 wellness benefit audit by proving which portions of their services were exempt under Schedule V.
• A corporate HR firm avoided penalties after we corrected treatment for gym memberships and mental health stipends.
• A wellness program with naturopathic practitioners passed audit when we documented regulated-profession status where applicable.

Learning insight: CRA withdraws when your documentation is stronger and clearer than their assumptions.

SEO Optimization & Educational Value

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Secondary keywords: taxable gym membership audit, employee benefit GST audit, naturopath GST audit, corporate wellness GST rules

Learning insight: Health & wellness tax compliance is heavily searched — strong content becomes top-ranking authority.

Why Mackisen CPA Montreal

With 35+ years of GST/HST audit-defense expertise, Mackisen CPA Montreal is Québec’s leading authority on health, wellness, employee benefits, and professional service classification for sales-tax purposes.
We understand exactly how CRA evaluates taxable vs exempt services and how to build documentation that CRA must accept.

Learning insight: Wellness audits require classification expertise + tax logic + documentation precision — our specialty.

Call to Action

If CRA is auditing your wellness programs, employee benefits, health services, or ITC claims, contact Mackisen CPA Montreal immediately:

📞 514-276-0808
📧 info@mackisen.com
🌐 mackisen.com

Learning Conclusion:

A CRA GST/HST Employer Health & Wellness Services Audit tests service classification, benefit structure, taxability, and documentation. Mackisen CPA Montreal ensures every service is classified correctly, every ITC is defended, and every audit point is resolved — protecting your business from reassessment.