Canadian Tax and
Financial Information
Automobile Operating Cost Benefit

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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
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


Total kilometres driven


Personal kilometres driven (40% of total)


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

Automobile Sales People

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

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