Allowable motor vehicle expenses
You can deduct your motor vehicle expenses if you meet all of the following conditions:
- You were normally required to work away from your employer's place of business or in different places.
- Under your contract of employment, you had to pay your own motor vehicle expenses.
- You did not receive a non-taxable allowance for motor vehicle expenses. Generally, an allowance is non-taxable when it is based solely on a reasonable per-kilometre rate.
- You keep with your records a copy of Form T2200, Declaration of Conditions of Employment, which has been completed and signed by your employer.
The types of expenses you can deduct include:
- fuel (gasoline, propane, oil);
- maintenance and repairs;
- licence and registration fees;
- capital cost allowance;
- eligible interest you paid on a loan used to buy the motor vehicle; and
- eligible leasing costs.
Sometimes, your employer will include an unreasonably low allowance as income on your T4 slip even though you do not want to claim any expenses. When this happens, have your employer complete and sign Form T2200, or get a letter from your employer stating that the allowance was unreasonably low. On line 229, deduct as an expense an amount equal to the allowance.
If you use a motor vehicle for both employment and personal use, you can deduct only the percentage of expenses related to earning income. To support the amount you can deduct, keep a record of both the total kilometres you drove and the kilometres you drove to earn employment income. We consider driving back and forth between home and work as personal use.
If you use more than one motor vehicle to earn employment income, calculate each vehicle's expenses separately.
For more information, see Interpretation Bulletin IT522, Vehicle, Travel and Sales Expenses of Employees.
For more information about allowable motor vehicle expenses, see Motor vehicle expenses.
Completing your tax return
Enter these amounts in the Calculation of Allowable Motor Vehicle Expenses area on Form T777, Statement of Employment Expenses, and attach it to your paper return.
Enter on line 229, the allowable amount of your employment expenses from the total expenses line of Form T777.
Forms and publications
- Form T777, Statement of Employment Expenses
- Form T2200, Declaration of Conditions of Employment
- IT522, Vehicle, Travel and Sales Expenses of Employees
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