The sixty-second answer
Record every uniform and piece of protective clothing against the employee who received it: item, size, date issued, whether it is a required uniform or safety gear, and its return. Distinctive required uniforms and protective clothing are not a taxable benefit [1]; other clothing generally is [2]. Issue records support that treatment and your safety obligations [3][4].
Why bother tracking clothing at all
Nobody starts a business intending to run a clothing store, yet many trades, hospitality, cleaning, security and healthcare employers end up issuing hundreds of items a year: shirts, jackets, aprons, high-visibility vests, gloves, safety boots and glasses. Each item is modest. Together, across staff turnover and seasonal hires, they add up to a real line on the books.
Without records, three things go wrong. Gear leaves with departing staff and is simply bought again. Nobody can say which employee has which protective equipment or when it was last checked. And when the tax treatment of clothing comes up, the business has no evidence of what was issued and why.
The tax rule: when clothing is not a benefit
The starting point is broad. Paragraph 6(1)(a) of the Income Tax Act includes in employment income the value of benefits of any kind whatever received or enjoyed because of the employment [2]. Clothing an employer buys for an employee is, by default, caught.
The CRA's employers' guide carves out the common cases. Your employee does not receive a taxable benefit if you supply a distinctive uniform that they have to wear while carrying out their duties, or if you provide protective clothing, including safety footwear and safety glasses, designed to protect them from hazards associated with the employment [1].
Two features of that wording matter for record keeping. The uniform must be distinctive and required; general clothing an employee could wear anywhere does not fit neatly inside it. And protective clothing must be designed to protect against hazards of that job. Tracking each item as either "required uniform" or "protective equipment" is how you show which exception applies.
Reimbursements, advances and allowances
Many small employers let staff buy their own boots or uniform pieces and pay them back. The guide sets conditions for that to stay non-taxable [1].
- Reimbursement or accountable advance, with receipts: not a taxable benefit if the cost is reasonable and, by law, the employee has to wear the protective clothing on the work site.
- Allowance without receipts: not a taxable benefit only if, by law, the employee has to wear the protective clothing on site, the employee used the allowance to buy it, and the amount is reasonable.
- Cleaning: paying a laundry or dry cleaner to clean uniforms and protective clothing, or paying a reasonable allowance or receipted reimbursement to the employee for it, is not a taxable benefit.
Each condition is a fact someone may later ask you to show. Receipts, the legal requirement to wear the item, and evidence the allowance was actually spent on protective clothing belong in the employee's issue record, not in a drawer.
The safety side: protective equipment records
Protective equipment is also a workplace safety matter. For federally regulated workplaces, the Canada Occupational Health and Safety Regulations require that employer-provided protection equipment be properly stored, maintained and inspected, fitted to each user, and kept clean and sanitary when worn [4]. They also require a record of all protection equipment the employer provides, other than disposable equipment, including its description, date of acquisition, inspections, tests and maintenance [3].
Provincial occupational health and safety rules govern most other employers and often expect similar care. CCOHS describes an effective PPE program as including selection, fitting, training, maintenance and auditing, and recommends that PPE be individually assigned [5]. It also notes that who pays for PPE depends on the jurisdiction and the type of equipment [5]. An issue record naming the person, the item and its size is individual assignment in practice.
What a good issue and return record looks like
For each item issued, record:
- Employee name and role.
- Item, size, quantity and, for serialised or higher-value gear, an identifier.
- Category: required distinctive uniform, protective equipment, or other clothing.
- Date issued and condition at issue.
- For protective equipment, inspection and maintenance dates and results.
- Date returned, condition, and outcome: reissued, cleaned, or disposed of.
Returns are where most systems fail. Make returning gear part of offboarding, with the issue record as the checklist. What comes back in good condition returns to stock for the next hire; what is worn out is disposed of and recorded as such, rather than silently vanishing.
A simple workflow from hire to exit
- Onboarding. Decide the standard kit for the role: how many shirts, which protective items, which sizes. Issue it, record each item against the new employee, and have them confirm receipt.
- Replacement. When an item wears out or is damaged, record the return of the old item and the issue of the new one together, so the count per person stays accurate.
- Inspection. For protective equipment, schedule checks and record the date and result against the item, not in a separate notebook.
- Role change. Moving from the shop floor to the office may mean returning protective gear. Treat it like a small offboarding.
- Exit. Print what the person holds, collect it, and mark each item returned, reissued or disposed of.
Common gaps that cost money
The usual failures are small and repetitive: replacement items issued without the old one being recorded as returned, so a person appears to hold six jackets; protective gear bought by the employee and reimbursed without keeping the receipt; allowances paid without any record that the employee was legally required to wear the gear; and seasonal staff who leave without anyone checking what they took. Each is cheap to prevent at the moment it happens and expensive to reconstruct later.
Clothing is company property, not resale stock
Uniforms and protective gear you issue to staff are not goods you sell, so they do not belong in your resale inventory or its year-end valuation. They are company assets or supplies in the hands of employees, and they are best tracked in an asset register that follows each item from purchase, to issue, to return or disposal. Keeping them separate also keeps your resale margins and inventory counts clean.
Records should be retained with the rest of your business records. The CRA's general rule is six years from the end of the last tax year they relate to [6]. Where safety rules set a separate period for protective equipment records [3], keep whichever is longer.
Sizing and reordering without guesswork
An issue history is also a purchasing tool. It shows which sizes you actually go through, how quickly each item wears out in each role, and how many sets a new hire really needs. Buying to that pattern avoids a cupboard of unworn extra-large jackets and the rush order when a new starter needs boots on day one.
How MapleInventory handles issued clothing
MapleInventory keeps a company asset register alongside resale stock. Clothing and uniforms are a category in it, next to tools, equipment, vehicles, IT and furniture. Each item can be assigned to a person, with its location and status, and marked disposed of when it is retired. The company assets report can be run by category, location, person, GIFI code or status, so a single view shows everything a departing employee should hand back, and every piece of protective gear currently in use.