Canada: Reduced automobile allowance limits, personal use in 2021

Canada: Reduced automobile allowance limits

The Department of Finance announced a $0.01* (one cent) decrease to the prescribed rates used to compute certain employee taxable benefits for 2021.

  • The rate used to determine the taxable benefit relating to the personal portion of automobile operating expenses paid by employers decreased to 27 cents per kilometer (from 28 cents per kilometer), as of 1 January 2021.
  • The rate used to determine the taxable benefit of an employee who is employed principally in selling or leasing vehicles also decreased to 24 cents per kilometer (from 25 cents per kilometer) for 2021.

Most other limits and rates that applied in 2020 will continue to apply in 2021.

Read a January 2021 report prepared by the KPMG member firm in Canada

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