Personal Finance

Company car tax question

  • Last Updated:
  • Mar 18th, 2019 12:36 am
[OP]
Deal Addict
Jun 18, 2018
1456 posts
901 upvotes
Toronto

Company car tax question

I am currently provided with a company car that my employer leases from another company. They pay for all vehicle related expenses, which is inclusive of gas, maintenance and insurance. Based on my T4, this is Box 34 that is the taxable benefit amount that is added to my total income. To my understanding, this includes both the operating cost (based on per km of personal use) and the standby charge (based on purchase price of the car and how long I had the car available to me). Am I able to confirm with the lease company how they came up with the box 34 value? Is it confidential by any means?

Now, I also contribute about $100 per month via payroll deduction for personal usage of a company vehicle. Is this taken into consideration in the above calculation? Since the amount on my T4 is based on what I provided the lease company (in terms of personal vs business km), I am not sure if this payroll deduction was communicated by my company, or again, if it is even supposed to be. If it's not in this calculation, am I able to claim this anywhere else?

Thanks!
3 replies
Deal Addict
User avatar
Dec 24, 2007
1649 posts
2032 upvotes
BC
For lease cars, there is a different formula, the standby charge is:

(2/3) x Lease payments for the year x availability ratio

Availability ratio = # of days car is made available to you / # of days in the lease period for the year

If your car is driven on business more than 50% of the time it is available to you, you get a reduced standby charge = regular standby charge x # of personal use kilometers/ # of months available x 1667 kms.

Operating benefit = $.26 per kms on personal use.

Any amounts you paid to the employer for the personal use of the car would be deducted from the standby charge or operating benefit.

You should be able to confirm the calculation with your employer, not the lease company.
[OP]
Deal Addict
Jun 18, 2018
1456 posts
901 upvotes
Toronto
WetCoastGuy wrote: For lease cars, there is a different formula, the standby charge is:

(2/3) x Lease payments for the year x availability ratio

Availability ratio = # of days car is made available to you / # of days in the lease period for the year

If your car is driven on business more than 50% of the time it is available to you, you get a reduced standby charge = regular standby charge x # of personal use kilometers/ # of months available x 1667 kms.

Operating benefit = $.26 per kms on personal use.

Any amounts you paid to the employer for the personal use of the car would be deducted from the standby charge or operating benefit.

You should be able to confirm the calculation with your employer, not the lease company.
I talked to HR and they told me that the lease company determines it based on the km's I submitted to them and not them, which is why I asked. That's why I feel like the money I contributed is not being counted.
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Dec 24, 2007
1649 posts
2032 upvotes
BC
Electrah wrote: I talked to HR and they told me that the lease company determines it based on the km's I submitted to them and not them, which is why I asked. That's why I feel like the money I contributed is not being counted.
Talk to whoever issued the T4 as it is their responsibility to get it right.

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