Effective January 1, 2025, the general prescribed rate used to determine the taxable benefit of employees relating to the personal portion of automobile expenses paid by their employers will increase from 33 to 34 cents per kilometre. For people employed principally in selling or leasing automobiles, the rate used to determine the employee’s taxable benefit will increase from 30 to 31 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 provinces will increase from 70 to 72 cents per kilometre for the first 5,000 kilometres driven and from 64 to 66 cents for each additional kilometre. For the territories, the limit will increase from 74 to 76 cents per kilometre for the first 5,000 kilometres driven and from 68 to 70 cents for each additional kilometre.
Employers providing a per-kilometre non-taxable allowance to their employees must ensure that the rates adhere to the Canada Revenue Agency's guidelines for reasonableness.