Motor vehicle leasing costs – employees

Note: Line 22900 was line 229 before tax year 2019.

You can deduct amounts you paid to lease a motor vehicle you used to earn employment income. Include the leasing costs you paid when you calculate your allowable motor vehicle expenses.

If you use a passenger vehicle to earn employment income, there is a limit on the amount of the leasing costs you can deduct. If you leased a passenger vehicle before January 1, 2001, you will need to refer to the applicable chart in the 2008 version of the Guide T4044, Employment expenses to assist you in calculating the eligible leasing costs.


The restrictions on the leasing cost deduction that apply to other passenger vehicles also apply to a zero-emission passenger vehicle.

You can get this version of the guide by going to T4044, Employment Expenses and clicking on the "Previous year versions" link, or calling the CRA at 1-800-959-8281.

Use the Chart, Eligible leasing costs for passenger vehicles leased after December 31, 2000 to calculate your eligible leasing costs for a passenger vehicle leased after 2000.


Most leases do not include items such as insurance, maintenance, and taxes. You have to pay these amounts separately. Therefore, list these expenses separately on Form T777, Statement of Employment Expenses. Do not include them in your calculation of eligible leasing costs.

If the lease agreement for your passenger vehicle does include items such as insurance, maintenance, and taxes, include them as part of the lease charges in your calculation.


On February 1, 2022, Tom, a resident of Nova Scotia, began leasing a car that meets the definition of a passenger vehicle. He used the car to earn employment income. Tom will complete the Chart using the following information for 2022:

  • Monthly lease payment: $500
  • Lease payments made for 2022: $5,500
  • Number of days the car was leased in 2022: 333
  • Manufacturer's list price: $28,000
  • HST $35,294 x 15% = $5,294
  • HST $900 x 15% = $135
  • HST $34,000 x 15% = $5,100

Repayments and imputed interest
When you lease a passenger vehicle, you may have either a repayment owing to you, or you may have imputed interest. If this is your situation, you cannot use the Chart, "Eligible leasing costs for passenger vehicles leased after December 31, 2000". Instead, contact us.

Imputed interest is interest that would be owing to you if you were paid interest on money you deposited to lease a passenger vehicle. You can only consider imputed interest as leasing costs on a passenger vehicle if all the following apply:

Completing your tax return

Enter your eligible leasing costs on line 25 of Form T777, Statement of Employment Expenses.

Enter on line 22900, the allowable amount of your employment expenses from the total expenses line of Form T777.

Forms and publications

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