2020 Automobile Deduction Limits

Capital Cost of Passenger Vehicles

The ceiling on the capital cost of passenger vehicles for capital cost allowance purposes will remain at $30,000.00 (plus HST) for purchases after 2019 for non-zero-emission passenger vehicles and $55,000.00 (plus HST) for eligible zero-emission passenger vehicles.

Leasing Costs

The limit on deductible leasing costs will remain at $800.00/month (plus HST) for leases entered into after 2019.  In addition, there is a second restriction on the deduction of automobile lease payments. This ensures that lease costs relating to the portion of the price of the vehicle that is in excess of the capital cost ceiling, are not deductible.

Tax-Exempt Allowance Limit

The limit on tax-exempt allowances paid by employers to employees has increased by 1 cent to $0.59/km for the first 5,000 kilometers driven and $0.53/km for each additional kilometer.

Maximum Allowable Interest Deduction

The maximum allowable interest deduction for amounts borrowed to purchase an automobile will remain at $300.00 per month for loans related to vehicles acquired after 2019.

The general prescribed rate used to determine the taxable benefit relating to the personal portion of automobile operating expenses paid by employers will remain at $0.28/km.

2020 Automobile Allowance

The automobile allowance rates for 2020 are:

  • 59¢ per kilometre for the first 5,000 kilometres driven
  • 53¢ per kilometre driven after that

December 19, 2019 – Ottawa, Ontario – Department of Finance Canada

Contact SSL Group for more information.