GST or HST on Employee Benefits
You can either deduct the GST or HST on taxable benefits from each paycheque, or pay the tax on behalf of the employee, recording an additional payroll expense.
If you prefer not to deduct GST from each paycheque, you can record a prior-year expense in February, when you calculate the total taxable benefits given to employees for the previous calendar year. (Alternatively, you could record this transaction each pay period.)