Automobile Deduction Limits for 2023 Announced

The general prescribed rate used to determine the taxable benefit for employees relating to the personal portion of automobile expenses paid by their employers will be increased by four cents to 33 cents per kilometre. For people employed principally in selling or leasing automobiles, the rate used to determine the employee’s taxable benefit will be increased by four cents to 30 cents per kilometre.

The limit on the deduction of tax-exempt allowances paid by employers to employees who use their personal vehicle for business purposes in all jurisdictions will increase by seven cents to 68 cents per kilometre for the first 5,000 kilometres driven and 62 cents for each additional kilometre. For the territories, the limit will increase by seven cents to 72 cents per kilometre for the first 5,000 kilometres driven and 66 cents for each additional kilometre. The 2023 Automobile Benefits Online Calculator will be available on the CRA’s website.