2017-03-29 00:00:00 Taxes English Check out the Canada Revenue Agency's free Automobile Benefits Online Calculator, and learn how it can determine employees' vehicle... https://d1bkf7psx818ah.cloudfront.net/wp-content/uploads/2017/06/08213922/Courier-driver-discusses-automobile-benefits-standing-near-vehicle.jpg Use This Calculator to Estimate Taxable Automobile Benefits for Your Employees

Use This Calculator to Estimate Taxable Automobile Benefits for Your Employees

1 min read

If you require your employees to drive vehicles for work, you may have to report taxable benefits on their paycheques. The Canada Revenue Agency has an online calculator that can help you determine the amount of these benefits. To use the Automobile Benefits Online Calculator, you need the following pieces of information:

  • Whether you or the employee owns the vehicle
  • The province where your business is located
  • The tax year
  • The cost of the vehicle, including tax
  • Details on employee reimbursement, if applicable
  • Total kilometres driven
  • Business kilometres driven
  • Personal kilometres driven

You also need to note if the employee has agreed to use the alternative method of calculating operating expenses. If so, you need to have that in writing. Based on that information, the calculator tells you how much of a benefit you need to include on your employee’s paycheque for each pay period. In most cases, if you own the vehicle, you only have to report a taxable benefit if your employee uses the vehicle for personal use. If your employee owns the vehicle, you may have to report any allowances you provide to cover business use of the vehicle as benefits. In these cases, your employees can usually offset that income by deducting vehicle expenses on their tax returns. If the calculator instructs you to report a taxable benefit on your employee’s paycheque stub, you need to withhold income tax and pay Canada Pension Plan contributions (or Quebec Pension Plan contributions) on that amount. You don’t have to pay Employment Insurance premiums, because it isn’t a cash benefit. After using the calculator, you should clear the cache on your browser. That ensures that no personal employee information gets accidentally stored on your computer. Payroll can be challenging, especially when you’re dealing with company cars or similar benefits. This calculator can really be helpful when you need to estimate taxable automobile benefits.

References & Resources

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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