Usually, if you provide an employee with a vehicle or an allowance for driving between home and a regular place of employment, the employee receives a taxable benefit (including any refunded expenses such as taxi fares).

The CRA does not consider it to be personal driving if you require or allow the employee to travel directly from home to a point of call (such as a salesperson visiting customers) other than your place of business to which the employee regularly reports, or to return home from that point.

Any location to or from which the employee regularly reports for work or performs the duties of employment is generally considered a regular place of employment.

For security or other reasons, there are times when public and private vehicles are neither allowed nor practical at an employment location. As a result, you may need to provide your employees with transportation from pickup points to that location. This transportation is not a taxable benefit. Do not deduct CPP contributions, EI premiums, or income tax from these amounts.

If the vehicle you provide your employee is an Automobile, see Calculating automobile benefits for more information.

Include any GST/HST that applies in the value of this benefit.

Payroll deductions

If the benefit is taxable, it is also pensionable. Deduct CPP contributions and income tax. If the taxable benefit is paid in cash, it is insurable. Deduct EI premiums. If it is a non-cash benefit, it is not insurable. Do not deduct EI premiums.

Reporting the benefit

Report the taxable benefit in box 14 "Employment income" and in the "Other information" area under code 40 at the bottom of the employee's T4 slip. For more information, see T4 – Information for employers.

Forms and publications

• Income Tax Folio S2-F3-C2, Benefits and Allowances Received from Employment