What are Union Dues?

As per Canadian labor laws, it is compulsory for you to pay trade union dues even if you are not a signed member of any union.

Union Dues in Detail

Union dues ensure that employees compulsorily pay for the benefits they get out of bargaining or negotiation power of unions. These benefits could be higher compensation, increased healthcare benefit, etc. This compulsory arrangement is also known as the Rand formula, which is a result of a 1946 Supreme Court ruling. If not made compulsory, many will opt out of this payment; yet they will still get the benefits of the bargaining power of unions.

How are Union Dues utilized?

If a single worker has to take some issue to arbitration, the cost will be too much. Similarly, in the event of a strike or lockout, workers cannot survive without strike pay. The amount collected through union dues is used for creating a national strike fund. At times the money may be used as a donation to striking workers. It may be even be donated to recognized charities, such as the United Way. At other times, the money can be used to support campaigns for pension or medicare rights of all workers. So all in all, the dues are used for maintaining the financial viability of unions.

Taxation of Union Dues

You can deduct any union dues paid by you from your taxable income. For example, if your annual income is $40,000 and you paid $1,000 as union dues, your taxable income will be only $39,000.

Other similar items

Similar to union dues, you are also eligible for tax deductions on certain other items. These include professional board dues, which may be compulsory under territorial or provincial laws, and professional liability/malpractice insurance. Also, professional membership dues, which may be compulsory under law to retain a professional status, and dues paid to parity or advisory committees or similar bodies are eligible for deduction. However, you cannot claim this deduction on initiation fees, licenses, payments for pension plans, and other similar items.

How do Union Dues affect your tax?

Union dues are deducted from your income. To calculate the impact of Union Dues on your taxes, use the tax calculator (select advanced tax calculator options for Union Dues).

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