Business -> Automobiles, Passenger Vehicles and Motor Vehicles -> Automobile Taxable Benefits -> Operating Cost Benefit
Automobile Operating Cost Benefit
Income Tax Act s. 6(1)(k), Income Tax Regulations s 7305.1
If the employer has paid the operating costs of an automobile which has been available for the personal use of an employee, an operating cost benefit must be included in the employee's income, less any reimbursements by the employee to the employer. The operating cost benefit is based on the kilometres of personal use by the employee, at the following rates per kilometre:
| Years | Rate per km |
| 2019 | $0.28 |
| 2018 | $0.26 |
| 2017 | $0.25 |
| 2016 | $0.26 |
| 2013-2015 | $0.27 |
| 2012 | $0.26 |
| 2008-2011 | $0.24 |
| 2006/2007 | $0.22 |
| 2005 | $0.20 |
| 2004 | $0.17 |
Operating Cost Benefit Reduction
For 2003 and later years, if the employee uses the automobile primarily (at least 50%) for business purposes, the operating cost benefit may be calculated as 50% of the standby charge, less any reimbursements.
Operating Cost Benefit Example
|
# of months available for use |
12 |
|
Total kilometres driven |
35,000 |
|
Personal kilometres driven (40% of total) |
14,000 |
Using the standby charge example, the operating cost benefit
for 2013 would
be:
14,000 km x $0.27 per km = $3,780
The automobile was used more than 50% for business purposes, so the
alternate calculation available, based on a calculated standby
charge of $4,199, is:
$4,199 x 50% = $2,099.50
Thus, the total taxable benefit to the employee in this example is:
$4,199 standby charge + $2,099.50
operating cost = $6,298.50
Other Resources:
All topics related to vehicles and business
Tax Tip: If your personal use is less than 50%, make sure your employer is aware that the operating cost benefit should be reduced.
Revised: December 28, 2018