Automobile and motor vehicle allowances

An allowance is any payment that employees receive from an employer for using their own vehicle in connection with or in the course of their office or employment without having to account for its use. This payment is in addition to their salary or wages. An allowance is taxable unless it is based on a reasonable per-kilometre rate.

Employees receiving a taxable allowance may be able to claim allowable expenses on their income tax and benefit return. For more information, see Employee's allowable employment expenses.

Topics

• Reasonable per-kilometre allowance
• Per-kilometre allowance rates that are not considered reasonable
• Flat-rate allowance
• Combination of flat-rate and reasonable per-kilometre allowances
  Explanation and examples of situations where a flat-rate and reasonable per-kilometre allowances are given.
• Employee's allowable employment expenses
• Reimbursement or advance for travel expenses
• Averaging allowances
• Reducing tax deductions at source on automobile or motor vehicle allowances
• Facts about automobile and other vehicle benefits and automobile allowances

Multimedia

Webinar: Automobile and Motor Vehicle Allowances