Question

When an employer provides a loan to an employee, how must it be classified?

a) Tangible Asset
b) Non-Performing Liability
c) Financial Benefit
d) Taxable Benefit

Answer 1

An employer providing a loan to an employee is classified as a Taxable Benefit.

Step-by-step explanation:

An employer providing a loan to an employee is classified as a Taxable Benefit. When an employer provides a loan to an employee, it is considered a taxable benefit because it represents an additional financial benefit provided by the employer. The value of the loan is added to the employee's income and is subject to taxation.