Calculating an operating expense benefit

When you (or a person related to you) provide an automobile to an employee and pay for the operating expenses related to personal use (including GST/HST and PST), this payment is a taxable benefit to the employee.

Operating expenses include:

• gasoline and oil;
• maintenance charges and repair expenses, less insurance proceeds; and
• licences and insurance.

Operating expenses do not include:

• interest;
• capital cost allowance for an automobile you own;
• lease costs for a leased automobile; or
• parking costs.

If you pay any amount of operating expenses, you have to determine the operating expense benefit by using either the optional or fixed-rate calculation.

Related topics

• Calculating automobile benefits