Example 1.

Employment Income
Taxable Benefits
Stand-by Charge
Employer owned vehicle is made available for Employee pe
Cost of Vehicle
$
52,000.00
HST
$
6,760.00
Total Value of Vehicle
$
58,760.00
Used
11
Total Km's driven
27000
Business Use
60%
Prescribed rate for operating benefit

Part 1.

Stand-by charge (2%*Cost*#of mos.used)

Reduction factor If business use > 50%, apply ((avg km's/m

Part 2.

Operating Benefit
If business use > 50%, choice of
lower of

Notes:

Insrurance and actual maintenance cost is irreleva

calculation of this taxable benefit

If business use was not > than 50%, reduction is not applicable
If business use was not > than 50%, no choice in lower operatin
If Employee reimburses Employer for personal operating expens
45 days after December 31, then no operating benefit applies
Employee taxable benefit is based on value of vehicle, however

resulting is a dis-incentive to provide luxury vehicles for emply

Example 2

Leased Vehicle is made available to employee for personal

Monthly Lease cost
Used 12 month's during year
Total Km's Driven
Personal Km's

Part 1.

Stand-by

$400
22000
12000

2/3 *Monthly lease plus taxes * #

No reduction available, Bus. Use

Operating Benefit.27*personal Km's

No option available, Bus. Use <5
Total Stand-by

Approximate cost to employee @

vailable for Employee personal use.

mos.

Feb 01 through Dec 31

Personal Use

40%

10800

$ 0.27 per KM
53.99%

t*#of mos.used)

12,927.20

50%, apply ((avg km's/mo.)/1667)

1. 50% of Stand-by
or
.27 per personal Km

((27000*.4/11)/1667)

3,806.89
Lower of

2,916.00

Total Stand-by Taxable Benefit

Estimated cost to employee

ntenance cost is irrelevant in the

%, reduction is not applicable, stand-by would be $12,927.20

%, no choice in lower operating benefit, would still be $2,916
for personal operating expenses during year or within
no operating benefit applies
d on value of vehicle, however, employer's cost for CCA purposes is limited to $30,000 pus taxes

ovide luxury vehicles for emplyee use

o employee for personal use

plus taxes

nthly lease plus taxes * # of mos. Available

$3,616.00

ction available, Bus. Use <50%

onal Km's
n available, Bus. Use <50%

mate cost to employee @ 40% MR

3,240.00

$6,856.00
$2,742.40

Avg.Km's/mo.

982

7,613.77 Reduced Stand-by

As bus use >50%

2,916.00

$ 10,529.77
$

4,211.91 Estimated 40% marginal tax rate

Practice Question #1
Cost
Insurance
Used from May 01 to Dec 31

$ 47,000.00
$1,200

Total Km's Driven

Business Km's

23000
14700

Operating Costs for the year

$1,600

Calcualte the taxable benefit for using this vehicle for personal use

$8,497.60

Stand by
Operating

Business Use Percentage

62%

$5,288.70 lower of
1
2

2644.349130174
2241

Total Taxable Benefit

7529.6983

64%

0.27
plus HST
20004
12
1667
8300 pkms

Practice Question #2
Cost

$420 lease per month

Used from Jan 01-Dec 31, 2011

Total Km's
Personal Km's

18000
12000

Calcualte the taxable benefit for using this vehicle for personal use.

stand by
$3,360
Op Ben

Tax Benefit

3240

$6,600

ase per month

Practice Question #3
Cost of Vehicle
Used from Feb 01, to Dec 31
Odometer
Feb-01
Odometer
Dec-31
Personal Km's
Employee reimbursed Employer $50 per month for operating costs

Tax Benefit to employee

5856.7487

t1
t2

2928.31
1944

Less employee return

1944
7800.7487
550
7250.7487

$ 60,000.00 PLUS hst

14000
32500
7200

per month for operating costs

18500 Used
11300 Business