The Department of Finance Canada announced today the automobile income tax deduction limits and expense benefit rates for 2025.
The limit on the deduction of tax-exempt allowances paid by employers to employees who use their personal vehicle for business purposes in the provinces will increase by two cents to 72 cents per kilometre for the first 5,000 kilometres driven, and to 66 cents for each additional kilometre.
The rates for the territories are traditionally set 4 cents higher and they will also increase by two cents to 76 cents per kilometre for the first 5,000 kilometres driven, and to 70 cents for each additional kilometre.
While the above information will be sufficient for most churches and ministries, additional details for specific situations including standby charges for the personal use of an employer provided vehicle, capital cost allowance, leasing costs, interest costs, etc. may be viewed in the news release on the Department of Finance Canada website at
https://www.canada.ca/en/department-finance/news/2024/12/government-announces-the-2025-automobile-deduction-limits-and-expense-benefit-rates-for-businesses.html