Split Receipting: When You Can't Receipt the Whole Gift

The one number that invalidates a receipt

The trickiest part of receipting is not the donation, it is what the donor got back. The CRA calls that an advantage: the fair market value of anything a donor receives in return for a gift, such as a meal, a ticket, a gift bag, or childcare for the afternoon. Only the gift minus that value can go on a receipt. Get the advantage wrong and you can issue a receipt for more than was actually given, which is invalid and lands on the donor first when the CRA disallows their claim. This part is federal, so it works the same in BC as anywhere in Canada.

How split receipting actually works

Split receipting just means splitting a payment into the part that is a gift and the part that is a benefit. The formula is simple: eligible amount equals the fair market value of the gift minus the fair market value of the advantage.

Say someone pays $50 to attend a fundraising dinner and the meal is worth $20. The eligible amount is $30. You still record the full $50 as received; the receipt is issued for $30. One caution: if you cannot put a fair market value on the advantage at all, the CRA's position is that you cannot issue a receipt. So value it before the event, not after.

When a small thank-you does not count

Not every little token reduces the receipt. Under the de minimis rule, if the advantage does not exceed the lesser of $75 and 10% of the gift, you ignore it and receipt the full amount. For example, a $300 gift and a branded tote worth $20: ten percent of $300 is $30, and $20 is under that, so you receipt the full $300.

There is one exception to keep in mind. The de minimis rule does not apply to cash or near-cash items like gift cards, vouchers, or coupons. Those always come off the gift, no matter how small.

When you cannot receipt at all

There is an upper limit too. If the advantage is worth more than 80% of the gift, the CRA generally considers there was no real intention to make a gift, and you cannot issue a receipt at all. The money is still recorded; it just cannot carry a receipt.

For example, a $25 pay-what-you-can dinner where the meal is worth $22: the benefit is 88% of the payment, so no receipt. Note that you use the fair market value of the advantage even if it cost you nothing to provide, and even a comped ticket counts toward the threshold.

Dinners, galas, and gift bags

Fundraising events are where advantages pile up. Some are the whole point of the event and always come off the gift: the meal at a dinner, the green fees and cart at a golf tournament, a comparable ticket price for a concert. Others, like door prizes and small complimentary gifts, only come off if they push the total advantage over the de minimis threshold.

The method is always the same: add up the advantages per person, compare to the thresholds, and receipt the remainder. If your event has no entry fee and people simply give what they can, the math is simpler but the advantage still matters. See how to accept donations at a community event for the practical side, and privacy basics for community organizations for looking after the donor names and addresses every receipt obliges you to record.