Is a low-interest or interest-free loan from my employer a taxable benefit?

Generally, yes. When an employer gives you a loan at no interest, or at an interest rate below the market rate, the Income Tax Act treats the difference as a taxable benefit to you. The way this gets calculated is by comparing what you're actually paying in interest against a benchmark rate CRA prescribes for this purpose — if you're paying less than that rate, the shortfall is generally added to your income as a taxable benefit.

Because CRA's prescribed rate is set and updated periodically rather than being a fixed number, the specific rate used in this calculation should always be checked as of the relevant period rather than assumed from an old figure — this is exactly the kind of detail that changes and needs confirming case by case. The loan doesn't have to be interest-free to trigger this; any rate meaningfully below the prescribed benchmark can create at least a partial taxable benefit.

If your employer has extended you a loan like this — whether for a specific purpose like a home purchase or as a general benefit — it's worth confirming with payroll or a tax advisor exactly how the benefit is being calculated and reported, since this is an area where the math depends on a rate that moves over time.