When can an employer use Form TD4 to keep special work site board, lodging and travel off the T4?
A special work site needs a TD4: temporary duties, an available, unrented home elsewhere, no daily commute and at least 36 hours away. A remote work location, 80 km or more from a community of 1,000, needs no TD4 and no home elsewhere. The CRA reads temporary as up to 2 years and too far as over 80 km.
What has to be true before a TD4 exemption works?
Every condition in ITA 6(6)(a)(i) has to hold at once, and the Act only excludes an allowance up to a reasonable amount laws-lois.justice.gc.ca. The Act gives no numbers for temporary or for distance. The CRA's payroll guidance supplies them
canada.ca.
| Condition | What the Act says | How the CRA tests it |
|---|---|---|
| Temporary duties | Duties at the site are of a temporary nature | Not expected to give continuous employment beyond 2 years, judged on facts known when the work started |
| A real home elsewhere | A self contained domestic establishment kept as the principal residence | A house, an apartment or a similar place of residence where the employee usually sleeps and eats |
| Home kept available | Available for the employee throughout the period, not rented to anyone | Same test, read literally |
| Too far to commute | Couldn't reasonably return daily because of distance | More than 80 km by the usual direct route, or less when shifts, roads or travel time make the trip unreasonable |
| Long enough away | Away from home, or at the site, for at least 36 hours | Travel time between home and the site counts toward the 36 hours |
The 2 year test uses the nature of the duties, the estimated length of the project or the part your client hired for, and the period in the employment contract canada.ca. An employee hired for a project everyone expected to run three years fails it from day one, even if the project later wraps early.
Distance under 80 km isn't fatal. The CRA weighs hours per shift, the rest the employee would get if they drove home, road and weather conditions, health, and the time of day of the drive canada.ca. A ship can qualify too, when the crew has to stay on board for 36 hours or more and the duties are temporary.
Worked example: a 14 day rotation keeps $35,280 off the T4
Take an employee who lives 420 km from a mine expansion expected to last 18 months. They work 14 days on, 14 days off. The employer provides a camp room and meals worth $160 a day and a return flight each rotation that costs $700, and the employee owns a house they don't rent out.
| Item | Arithmetic | Amount for 12 rotations |
|---|---|---|
| Board and lodging | 14 days x $160 x 12 | $26,880 |
| Return flights | $700 x 12 | $8,400 |
| Total excluded with a valid TD4 | $26,880 + $8,400 | $35,280 |
Every test passes: 18 months is under 2 years, 420 km is far past 80 km, each rotation is well over 36 hours, and the flights only cover periods when the employer also provides board and lodging, which the Act requires for transportation laws-lois.justice.gc.ca. The $35,280 goes nowhere on the T4 (unless the site is in a prescribed zone, covered below).
Now change one fact: at hiring the employer expected the work to run three years. The duties aren't temporary, so the $26,880 goes in box 14 and code 30, the $8,400 in box 14 and code 40, and both count in box 26 for CPP canada.ca. For EI, the regulations count the value of board or lodging when you also pay cash wages in that pay period
laws-lois.justice.gc.ca.
Why a remote work location never needs a TD4
ITA 6(6)(a)(ii) is a separate exemption for a place so remote the employee couldn't set up a home there, and it doesn't require a home elsewhere laws-lois.justice.gc.ca. The CRA generally treats a site as remote when it's 80 km or more from the nearest established community of at least 1,000 people, the board and lodging covers at least 36 hours, and you didn't provide the employee a self contained home
canada.ca.
The CRA tells employers not to complete a TD4 for a remote work location, because the form is only for special work sites canada.ca. A site can be both remote and a special work site, but the benefit is excluded only once, so pick the exemption that fits and document that one.
What do you and the employee each certify on the 2026 TD4?
The current form is TD4 E (26). The employee gives their home address, the one way distance in kilometres and where they live while at the site, then certifies the four home and distance conditions. You give your payroll account number, the exact site location, whether the benefits come from a collective agreement or company policy, the period away and the amounts paid or provided for board, lodging and transportation canada.ca.
Your certification covers three points: the duties are temporary and the employee can't be expected to return home daily, the board and lodging covers at least 36 hours at the site including travel, and any transportation benefit relates only to periods when board and lodging is also provided.
Fill it out when the employee starts at the site and again when their situation changes. Keep it with the payroll records and don't send a copy to the CRA canada.ca. The form itself warns that knowingly completing or accepting a TD4 with false statements is an offence, and that an employer who gets one with doubtful statements should contact its tax services office.
Where do excluded and taxable amounts go on the T4 and T4A?
| Situation | T4 | T4A (third party payer) |
|---|---|---|
| Exempt with a TD4, site outside a prescribed zone | Nothing reported | Nothing reported |
| Exempt with a TD4, prescribed zone site within 30 km of an urban area of 40,000+, employee's home outside a prescribed zone | Code 31, not in box 14 | Code 124 |
| Taxable board and lodging | Box 14, box 26 and code 30 | Code 028 |
| Taxable transportation | Box 14, box 26 and code 40 | Code 028 |
Excluded amounts carry no CPP or EI. The EI regulations remove any amount excluded under ITA 6(6) from insurable earnings laws-lois.justice.gc.ca, and CPP contributory salary is employment income computed under the Income Tax Act, so an excluded amount never enters it
laws-lois.justice.gc.ca.
The prescribed zone rule catches people. The CRA's example: of $4,000 of exempt board and lodging, $1,200 relates to a site 27 km from a town of 43,000, so you report $1,200 under code 31 even though nothing went under code 30 canada.ca. The employee uses it on Form T2222 because board and lodging that wasn't taxed reduces the residency amount of the northern residents deduction
canada.ca. Exempt amounts at a remote work location don't affect that deduction.
Sources
Do I need a new TD4 every year?
Not by rule. The CRA's trigger is an event, not the calendar: complete the form when the employee starts at the special work site and again when their situation there changes canada.ca. A move to a different site, or a new principal residence, changes the facts the form certifies, so a fresh TD4 is the safe file.
Can an employee who rents out their house while at the site still qualify?
No. The home has to stay available for the employee throughout the period and can't be rented to anyone else, so renting it out breaks ITA 6(6)(a)(i) for that period laws-lois.justice.gc.ca. The board, lodging and travel then go on the T4 as taxable benefits under codes 30 and 40.
Does an allowance have to match actual costs to be excluded?
No, but it has to be reasonable. The Act excludes an allowance only up to a reasonable amount, so an allowance well above the real cost of board and lodging near the site risks being taxable laws-lois.justice.gc.ca. The TD4 asks for the amounts paid, so the CRA can see the figure if it reviews the file.
Does travel time count toward the 36 hours?
Yes. The CRA counts the time the employee spends travelling between home and the special work site, and the employer certification on the TD4 says the same canada.ca. So a 30 hour stint at the site plus 3 hours of travel each way reaches 36 hours.
General information for the tax year shown, not advice for a specific client. Confirm the facts before you file or remit.