Benefit for motor vehicles not defined as an automobile

A motor vehicle is an automotive vehicle designed or adapted for use on highways and streets. It does not include a trolley bus or a vehicle designed or adapted for use only on rails. Although an automobile is a kind of motor vehicle, we treat them differently for income tax purposes.

Zero-emission vehicles are cars and trucks powered by rechargeable electric batteries or hydrogen fuel cells.

Even if the vehicle you provide to your employee is not included in the definition of automobile, there is still a taxable benefit for the employee for their personal driving.

You have to reasonably estimate the fair market value of your employee's personal use of your motor vehicle, including the GST/HST and PST. A reasonable estimate is considered to be the amount an employee would have had to pay in an arm's length transaction for the use of comparable transportation. It includes items such as the cost of leasing a comparable vehicle and any other related operating costs. For more information, go to paragraph 23 in Archived Interpretation Bulletin IT-63R5, Benefits, Including Standby Charge for an Automobile, from the Personal Use of a Motor Vehicle Supplied by an Employer – After 1992.

Although other methods of calculating the value of your employee's taxable motor vehicle benefit are acceptable, the CRA generally accepts that the employment benefit arising from the employee's personal use of the vehicle will be considered reasonable if it is calculated using the rates shown in Reasonable per-kilometre allowance.


The standby charge and operating expense benefit calculations should not be used.

Depending on how your motor vehicle is used by your employee and the conditions that you place on the use of it, you may be able to calculate your employee's taxable benefit using the Motor vehicle home at night policy below.

Motor vehicle home at night policy

Administratively, you can calculate the taxable benefit for your employee's personal use of the motor vehicle between home and work using the rates shown under Fixed rate calculation as long as your employee meets all of the following conditions:

1. The motor vehicle is not an Automobile

2. You tell your employee in writing that they cannot make any personal use of the vehicle, other than travelling between work and home

Your employee will have to maintain full logbooks of the vehicle's use as proof that there was no other personal use.

3. You have valid business reasons for making the employee take the vehicle home at night, such as:

  • it would not be safe to leave tools and equipment at your premises or at a worksite overnight
  • your employee is on call to respond to emergencies (see Note), and you provide the vehicle so the employee can respond more effectively to emergencies

4. The motor vehicle is specifically designed or suited for your business or trade and is essential for the performance of your employee's duties. Just transporting the employee to the work location does not meet the condition of "essential in the performance of employment duties." The following examples meet both conditions:

  • The vehicle is designed, or significantly modified, to carry tools, equipment, or merchandise. Your employee has to have the vehicle to do their job
  • The vehicle, such as a pickup truck or a van, is suitable for and is consistently used to carry and store heavy, bulky, or numerous tools and equipment. It would be difficult to load and unload the contents. The vehicle is essential to your employee in performing their job
  • The vehicle is regularly used to carry harmful or foul-smelling material, such as veterinary samples or fish and game. The vehicle is essential to your employee in performing their job
  • Your employee is on call for emergencies (see Note), and has to use a vehicle which:
    • is a clearly marked emergency-response vehicle
    • is specially equipped to respond rapidly
    • is designed to carry specialized equipment to the scene of an emergency

      We generally consider an emergency to relate either to the health and safety of the general population or to a significant disruption to the employer's operations.

For examples of situations where transportation to and from home is considered a taxable benefit, go to Examples – Transportation to and from home.

Report a problem or mistake on this page
Please select all that apply:

Thank you for your help!

You will not receive a reply. For enquiries, contact us.

Date modified: