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:
Example of standby charge calculation for owned vehicle:
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 remain unchanged for 2017.
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 standby charge benefit should be reduced.
Revised: December 28, 2017
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