Federal Civil Servants are allowed a tax free allowance (no receipts required) of $70. per day while away from their desks. An employer can pay an employee a Subsistence Allowance that is tax free to the employee and expensed out by the employer who also gets a GST Input Tax Credit of 6 over 106. No receipts are required.                                                     

I first came upon this method when my past employer was being audited by the GST Department. The Auditor commented that I paid out a large amount of Subsistence and asked if I was aware that I could get an Input Tax Credit. He then printed out the memo referencing this Factor Method. It is a method that has been in use for many years.                                                                                         

Subsistence is a fixed amount negotiated between the employer and employee and has been negotiated into many union collective agreements for years. In the Pipe Line Construction industry, this amount is $108 per day. (2002 rates) In some Teamsters Union Collective Agreements for highway drivers the rate ranges from $40 and up plus the reasonable cost of a hotel room. Approach your employer and negotiate with him to reduce your wages, mileage rate, commission, etc, and replace it with a fixed amount of Subsistence. You'll pay less taxes and take home a bigger pay check. Lease Operators and Owner Operators, get incorporated and negotiate your own Subsistence agreement. Here is a quick example of someone presently getting $48,000 per year. Let's reduce that to $38,400 plus Subsistence of $9,600 per year. You are still getting a gross of $48K however you are taking home $2,439 more and your employer is getting an Input Tax Credit of $543. and lower CPP, EI and WCB contributions of $1,149.