Most reasonable per-kilometre allowance limits and rates remain the same in 2021.
Every year, the Canada Revenue Agency (CRA) updates the reasonable per-kilometre allowance rates. In December of 2020, they announced that most of the limits and rates applied in 2020 will continue to apply in 2021.
The most commonly used method by employers is the deduction of tax-exempt allowances paid by employers to employees who use their personal vehicle for business purposes. This limit will remain at 59 cents per kilometre for the first 5,000 kilometres driven and 53 cents per kilometre for each kilometre above 5,000. If you have any questions about allowable automobile rates or other tax-exempt allowances, please reach out to your Bateman MacKay Tax and Business Advisor.
Other Rates Remaining the Same:
Changed Rates for 2021:
Sign up for our newsletter and receive tax, accounting, and COVID-19 resources for your business!