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 Employees' allowable employment expenses.
This section explains common forms of automobile and motor vehicle allowances.
- Reasonable per-kilometre allowance
- Per-kilometre allowance rates that we do not consider 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.
- Employees' 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
- Webinar: Automobile and motor vehicle benefits and allowances | 41:55 min.
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