Personal Finance

Company's car compensation.

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  • Sep 3rd, 2021 8:16 am
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[OP]
Member
Apr 22, 2008
442 posts
58 upvotes
Ajax, On

Company's car compensation.

Hi. I have an option to choose a company car or take a salary rise. Does anyone know any formula (if such exist) to calculate equivalent annual expense?
11 replies
Deal Expert
User avatar
Jan 27, 2004
50022 posts
14067 upvotes
ONTARIO
Karall wrote: Hi. I have an option to choose a company car or take a salary rise. Does anyone know any formula (if such exist) to calculate equivalent annual expense?
Would be a sweet deal if it was fully paid for and insured. Plus you can drive it anywhere for personal and business needs.

Car is worth @ least $25k minimum for something economy.
Member
Dec 5, 2017
265 posts
241 upvotes
What is the difference in salary if you don't take the car? I would run the costs of having your own car. If you have your own car would it be new or used? If it's used it would be harder to estimate the expenses.

I've always used excel for comparisons like this. Here is an online one. Although it doesn't account for the real depreciation of the car, which is what I would use.
https://www.nerdwallet.com/article/loan ... owning-car

@Urbenpoet, 25K per year? That is some crazy expensive economy car.
Deal Addict
User avatar
Oct 13, 2007
4382 posts
3232 upvotes
Edmonton
Karall wrote: Hi. I have an option to choose a company car or take a salary rise. Does anyone know any formula (if such exist) to calculate equivalent annual expense?
Keep in mind that the car is taxed for all personal usage.
Deal Fanatic
Jan 19, 2017
7451 posts
4347 upvotes
Karall wrote: Hi. I have an option to choose a company car or take a salary rise. Does anyone know any formula (if such exist) to calculate equivalent annual expense?
When you say to choose a company car, do you get to keep it and sell it or just let you to drive? Do you need the car for your job( I.e. go to customer locations)?
Deal Addict
User avatar
Dec 24, 2007
1686 posts
2136 upvotes
BC
Karall wrote: Hi. I have an option to choose a company car or take a salary rise. Does anyone know any formula (if such exist) to calculate equivalent annual expense?
Company would likely be leasing the car, so you can probably use the annual lease payments you would make on the car as an equivalent.
[OP]
Member
Apr 22, 2008
442 posts
58 upvotes
Ajax, On
I'm just in the middle of negotiation, so cost is unknown. I can, obviously estimate car expenses to what I think if fair which company might not accept. I thought there might be some "official" numbers that I can present.
[OP]
Member
Apr 22, 2008
442 posts
58 upvotes
Ajax, On
AFAIK the car is fully paid by company. I will be able to use if for personnel and business needs. Taxation is keeping me away of accepting this offer but, on the other hand knowing that I don't have to spend a cent on it make a deal quite attractive. I just need to counteroffer in monetary value.
Deal Fanatic
Jan 21, 2018
7575 posts
8163 upvotes
Vancouver
The federal government sets a standard fee per km for use of a personal vehicle on government business. It is intended to include all costs, including depreciation, and gets revised every year (except apparently this year): https://www.canada.ca/en/revenue-agency ... -2020.html

For example: Ontario 56.5 cents.km

Keep in mind the comment from @starchoice that any personal use of the company car is taxed as a taxable benefit. Otherwise companies would just give their managers a tax-free "car allowance" instead of taxable salary.
Deal Addict
Jan 31, 2007
4831 posts
4845 upvotes
Richmond Hill
Scote64 wrote: The federal government sets a standard fee per km for use of a personal vehicle on government business. It is intended to include all costs, including depreciation, and gets revised every year (except apparently this year): https://www.canada.ca/en/revenue-agency ... -2020.html

For example: Ontario 56.5 cents.km

Keep in mind the comment from @starchoice that any personal use of the company car is taxed as a taxable benefit. Otherwise companies would just give their managers a tax-free "car allowance" instead of taxable salary.
This is what i get, $700 a month as car allowance.
Much easier on fiing tax, and i dont have to drive the only 3 model the company lease.
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Bright side of RFD: Often find good deal
Dark side of RFD: Tons of stuff that I don't need but still got them because of RFD
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Newbie
Apr 12, 2005
84 posts
14 upvotes
Car allowance may not be tax free. Our company was audited, and all allowances became taxable. We had to change our policy for the employee to claim auto expenses. In my opinion, driving the company car is worth it if you use it mostly for business, especially if maintenance/repairs are expensive.
Deal Addict
Jan 31, 2007
4831 posts
4845 upvotes
Richmond Hill
aquafina sucks wrote: Car allowance may not be tax free. Our company was audited, and all allowances became taxable. We had to change our policy for the employee to claim auto expenses. In my opinion, driving the company car is worth it if you use it mostly for business, especially if maintenance/repairs are expensive.
In my case, i drive Zero for business (work from home for last 8 years). I think the car allowance show up as taxable benefits, so to me it is taxable.
******************************************************
Bright side of RFD: Often find good deal
Dark side of RFD: Tons of stuff that I don't need but still got them because of RFD
******************************************************

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