Revenue Canada Kilometer Allowance

To keep up with the rising costs of operating vehicles revenue canada has increased the maximum tax exempt car allowance deductible for employees to 59 cents per kilometre for the first 5 000 kilometres and to 53 cents per kilometre for distances travelled in excess of 5 000 kilometres.

Revenue canada kilometer allowance. The usual drive to work is not deductible for tax. This is known as the cra mileage rate or the automobile allowance rate and just as the u s. Reasonable per kilometre allowance rates are the same as for automobiles. In the northwest territories yukon and nunavut there is an additional 4 per kilometre allowed for travel.

If you receive an allowance for business driving according to prescribed rates that s part of your income. 59 per kilometre for the first 5 000 kilometres driven. Automatic mileage tracking. Anywhere from 200 00 per month to 1000 00 per month.

This booklet is not a substitute for professional advice which you should seek when you are considering important actions. 53 per kilometre driven after that. Referred to as the automobile allowance rate this rate is not a fixed value and just as the u s. If the amount is too low or too high then it would be considered taxable.

59 per kilometre for the first 5 000 kilometres driven. 53 per kilometre driven after that. For 2020 they are. Your employer does not include this amount on your t4 slip.

Nevertheless it will answer many questions and help. One common misconception is that the canada revenue agency cra allows tax deductions for car expenses related to an individual s commute to and from their place of work. The canada revenue agency cra which is the canadian equivalent to the irs recently announced its 2020 income tax deduction limits and expense benefit rates that will apply when using an automobile for business purposes. Manually entering trip information in a log book is tedious particularly if you make a lot of business trips.

You do have to report a flat rate allowance which is considered a taxable benefit. The automobile allowance rates for 2020 are. What is the 2020 cra car allowance rate. The canada revenue agency also referred to as cra and the canadian equivalent to the irs allows residents to deduct business mileage on a cost per kilometre basis.

Tax law in canada is complicated and ever changing affected by frequent legislative changes court decisions and the administrative practices of the tax authorities. So before you accept that job offer 100 kilometres km s away think twice. Employers must be careful when providing a non taxable car allowance. Fortunately there are several mileage tracking applications available for apple and android smartphones that make use of the phone s gps to keep track of every mile kilometer driven for business purposes.

In my 9 years here at peo canada i have seen many variations of car allowance amounts. Standard mileage rate it is not a fixed value and can vary year to year.