Each year the Department of Finance announces the new limits that apply to vehicles. For 2019 you can reimburse an employee 58 cents per kilometer for the first 5000 km that are driven for business in 2019. For each subsequent business kilometre you can reimburse them at 52 cents a kilometre. This is a 3 cents increase over 2018 which is good to see. If you use your personal vehicle for work, and your business is incorporated, then these are the limits you need to know.
If your business is not incorporated, then you cannot reimburse yourself this way, but you can reimburse your employees by kilometer. The other limits remain unchanged. You can only depreciate for tax purposes the first $30,000 that you pay for a passenger vehicle. The monthly lease payment that can be deducted is capped at $800 per month and interest is only deductible at $300 per month.
If you look at the list prices for vehicles that you might use for work, most of them are higher than $30,000. When the limit went into effect in 2001 vehicle prices were much lower. If any federal politicians are looking for your vote sometime soon, you might want to mention that the vehicle you need to run your business costs more than this out-of-date limit. The best time to get a politician’s attention is when they are looking to get re-elected.