Business -> Automobiles, Passenger Vehicles and Motor Vehicles -> Automobile Taxable Benefits -> Standby Charge Benefit
Automobile Standby Charge Benefit
Income Tax Act s. 6(1)(e), s. 6(2)
The standby charge benefit recognizes that the employee is receiving a benefit by having the automobile available to them during the year for their personal use.
The standby charge is calculated based on:
When the automobile is owned by the employer, the standby charge is:
If the automobile is available 12 months of the year, then 24% of the cost of the automobile is included in the employee's income each year.
When the automobile is leased by the employer, the standby charge
Standby Charge Reduction
For 2003 and later years, the standby charge may be reduced if:
The above example assumes no reimbursement has been made by the employee to the employer. When business use is 50% or greater, the operating cost benefit is also reduced.
The above rates are still in effect up to 2021.
Employees will be allowed to use their 2019 automobile usage to determine whether they use the automobile primarily for business purposes, in order to access the reduced standby charge in 2020 and 2021. Only employees with an automobile provided by the same employer as in 2019 are eligible for this option.
Dec 21, 2020 Backgrounder: Temporary Adjustments to the Automobile Standby Charge for the 2020 and 2021 Taxation Years due to COVID-19
This measure is included in Bill C-30, Budget Implementation Act, 2021, No. 1, tabled April 30, 2021.
All topics related to vehicles and business
Canada Revenue Agency (CRA) Resources
See the main Auto Taxable Benefits article for CRA resources.
Tax Tip: If your personal use is less than 50%, make sure your employer is aware that the standby charge benefit should be reduced.
Revised: September 29, 2021
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