Company car taxable benefit calculator
Updated
Quick answer: A corporation-owned vehicle creates a taxable benefit on your T4. Estimate both parts of it before you buy the car, not after.
How the standby charge and operating benefit are worked out: company car taxable benefit explained.
The estimate is only as good as the kilometres behind it, and the log is what a review asks for. Ask a CPA to check your figures.
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General estimates, not tax advice. Rates change and your result depends on details a calculator cannot capture; we confirm the numbers once we review your enquiry.
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What taxable benefit goes on the T4 for an employee or owner driving a company-owned vehicle?
Any corporation with a company-owned vehicle, a common audit item. It models owned vehicles; leases use a different standby charge.
On this page
A worked example
These are the numbers already in the calculator above, so you can follow the arithmetic against the result it is showing.
| Step | Figure |
|---|---|
| Full standby charge | 2% × $55,000 × 12 months = $13,200 |
| Business use | (30,000 − 8,000) ÷ 30,000 = 73% — above the 50% test |
| Personal km test | 8,000 is below 1,667 × 12 = 20,004, so the reduction applies |
| Reduced standby charge | 8,000 ÷ 20,004 × $13,200 = $5,279 |
| Operating benefit | 8,000 personal km × $0.34 = $2,720 |
| Total taxable benefit | ≈ $7,999 on the T4 |
What it assumes, and where it stops
Every estimate rests on assumptions. These are the ones that would change your number most.
| Assumption | What it means for your number |
|---|---|
| A kilometre log exists | Every reduction above depends on personal and total kilometres. With no log, the CRA can assess the full standby charge — here, $13,200 instead of $5,279. |
| The vehicle is owned, not leased | A leased vehicle uses two-thirds of the lease cost rather than 2% of cost. |
| Both reduction tests are met | The reduced standby charge needs business use above 50% AND personal kilometres under 1,667 per month. Failing either gives the full charge. |
| The operating benefit has an alternative | Where business use exceeds 50%, half the standby charge can be elected instead of the per-kilometre rate — but the election has a deadline. |
General information, not advice. Have a CPA confirm it for your situation
The automobile benefit is two benefits, not one
A company car creates two taxable benefits. The standby charge is 2% of the original cost (including GST and PST) for each month it is available to you, driven or not. The operating benefit is 34¢ per personal kilometre for 2026, for company-paid running costs. This standby charge calculator works out the 2% monthly charge and the operating benefit together, so both parts of the T4 benefit show in one result.
The reduced standby charge is the whole game
If business use is at least 50% and personal driving stays under 1,667 km per month (20,004 a year), the standby charge is prorated by personal use. Miss either by one kilometre and the full 2% a month applies. Enter your business and personal kilometres in the auto benefit calculator above to see whether both conditions for the reduced standby charge are met.
Personal use of a company vehicle: before you buy the car
Run the number first. On an expensive vehicle with meaningful personal use, the taxable benefit frequently exceeds what you would have received as a per-kilometre allowance for using your own car. That allowance is 73¢ for the first 5,000 km and 67¢ after that, paid tax-free to you and deductible to the company. That comparison, not the purchase price, is the real decision. The full guide to company cars
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Automobile benefit calculator FAQ
How is the standby charge calculated?+
What is the reduced standby charge?+
What is the operating benefit rate for 2026?+
Is a company car worth it?+
Do I need a logbook?+
How do I read the benefit amount this calculator produces?+
What does the vehicle benefit calculator not account for?+
Is this the same as the CRA’s automobile benefits online calculator?+
Related reading
Guides and tools that go deeper on what this page covers.
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