Automobile Expense Deduction Limits for 2022

The Canada Revenue Agency (CRA) has announced the automobile expense deduction limits which will apply during the 2022 taxation year. Owing to increases in the Consumer Price Index, most such limits have been increased for 2022.

Some of the changes include:

  • An increase in the ceiling for capital cost allowances for passenger vehicles, from $30,000 to $34,000.
  • Deductible leasing costs increased, from $800 to $900 per month, for new leases entered into.
  • The limit on the deduction of tax-exempt allowances paid by employers to employees who use their personal vehicle for business purposes will increase by two cents per kilometre.
  • Finally, the general prescribed rate used to determine the taxable benefit of employees relating to the personal portion of automobile expenses paid by their employers is also increased by two cents per kilometre.

Detailed information on the rates and limits applicable for 2022 can be found on the CRA website at https://www.canada.ca/en/department-finance/news/2021/12/government-announces-the-2022-automobile-deduction-limits-and-expense-benefit-rates-for-businesses.html.

Person Driving Car on Highway