Canadian Bookkeeping Tax Rates
For The Business Owner Working From Home

Canadian tax compliance rate information for bookkeepers.Canadian Tax Rates

by L. Kenway BComm CPB Retired

These tax compliance rates that would be of interest to Canadian small business owners and bookkeepers working from a home office.

You may want to exhale and take a tea break so you can look through all of my notes on this subject.

You may also be interested in "The Deadlines" page which discusses tax compliance filing deadlines.


Compliance Tax Rates Series      Click on an image below to go to the chat.

Canadian bookkeeping and tax rates

Interest Rates, Mileage

Auto Allowance,

Canadian payroll tax rates


Current EI & CPP Rates, Paying Employees With Cash

Quick Method of accounting for sales tax in Canada.

Quick Method Notes

Current & Historical Rates

BC PST rates effective April 1, 2013.

BC PST Rates

Invoicing, Transportation Summary of Announcements

Notice to Site Visitor

I developed this tax rates page as a handy reference for myself. While I do my best to ensure it is accurate and complete, I make it available for your use with the understanding that I cannot be held liable for errors and/or omissions.

Tax information is subject to frequent change so professional advice should be sought prior to acting on any of this information. Please make yourself familiar with my site policies prior torelying on any of the information on this site.

Taxable Benefits
Company Vehicle Tax Rates


Company automobile operating expenses have a personal use portion that is a taxable benefit to the employee.Company Owned Cars

Company Owned Cars

This tax tip about company cars comes to you from my favorite tax site,

"It is much simpler for an employee to use their own automobile and be paid a tax-free automobile allowance for the business use of the automobile."

Released December 18, 2023

The taxable benefit (means this is reported on the T4 as employment income) relating to the personal portion of automobile operating expenses paid by employers are:

Year Operating Expense Benefit** Selling / Leasing Benefit***
2024 33.0 30.0
2023 33.0 30.0
2022 29.0 26.0
2021 27.0 24.0
2019-2020 28.0 25.0
2018 26.0 23.0
2017 25.0 22.0
2016 26.0 23.0
2013-2015 27.0 24.0
2012 26.0 23.0
2008-2011 24.0 21.0
2006-2007 22.0 19.0

Temporary Standby Charge
for 2020 and 2021

"In light of the impact COVID-19 lockdowns and public health measures have had on how employees use their employer-provided vehicles, the government introduced temporary adjustments to the automobile standby charge. For the 2020 and 2021 taxation year,  employees be allowed to use their 2019 automobile usage to determine eligibility for the reduced standby charge. Only employees with an automobile provided by the same employer as in 2019 would be eligible for this option."

Source: CRA website

Operating cost benefit** (taxable benefit-see table above) are now 27 cents per kilometer PLUS standby charge (taxable benefit). The standby charge in not optional and assigns a dollar value for the availability of the car for personal use. You MAY be eligible for an operating cost benefit reduction IF the vehicle was used at least 50% for business (i.e. your personal use of the company car is less than 50%).

CRA defines personal driving use to include (excerpted from their website):

  • driving to conduct personal activities;
  • travel between home and a regular place of employment, other than a point of call. (Include any refunded expenses such as taxi fares); and
  • travel between home and a regular place of employment even if you insist the employee drive the vehicle home, such as when he or she is on call.
  • vacation trips;

*At year-end, you can claim the lesser of the actual interest paid or $10 per day times the number of days interest was paid.

**If employer pays the operating cost of the vehicle, defined as gas and oil, maintenance and repairs (less insurance proceeds), insurance and licence. It does not include interest, CCA, lease costs, or parking costs.

***Used if you are employed in selling or leasing vehicles and excludes the standby charges which are applicable.

Need more information, read more here ...

Vehicle Purchase Limitations

These tax rates are deduction limits for the "passenger vehicle category" and used on Form T2125 Page 5 in Charts B and C. They are reviewed and revised annually each December. The Department of Finance announced on December 18, 2023 that due to recent inflationary increases, allowances will be increased for 2024 rates.

  • Maximum monthly interest $350 (up from $300) on money borrowed to buy vehicle*
  • Maximum monthly lease payments $1,050 (up from $950) plus taxes
  • Maximum Class 10.1 capital cost $37,000 (up from $36,000) plus taxes for non zero-emission passenger vehicles less ITCs where maximum GST ITC claimable 5% of $37,000 = $1,850
  • Maximum Class 54 capital cost $61,000 (no change) plus taxes for zero-emission passenger vehicles less ITCs where maximum GST ITC claimable 5% of $61,000 = $3,050
  • See GST Memorandum 8-2 for GST/HST ITC limits for purchased passenger vehicles

Historical Tax Rates - Maximum Class 54 Capital Cost Restrictions

Jan 1, 2023 to Dec 31, 2024 -- zero emission $61,000 plus taxes
Mar 19, 2022 to Dec 31, 2022 -- zero emission $59,000 plus taxes
Mar 19, 2001 to Dec 31, 2021 -- zero emission $55,000 plus taxes

The Department of Finance clarified that "zero emission passenger vehicles include plug-in hybrids with a battery capacity of at least 7 kWH and vehicle that are fully electric or fully powered by hydrogen."

In 2019, the government introduced accelerate CCA for ZEV. They expanded the write-off in 2020 for other ZEVs.

Accelerated ZEV Rates for eligible vehicles:

  • 100% write-off from March 18, 2019 to 2023
  • 75% write-off in the first year for 2024 & 2025
  • 55% write-off in the first year for 2026 & 2027

Historical Tax Rates - Maximum Class 10.1 Capital Cost Restrictions

Jan 1, 2024 to Dec 31, 2024 -- non zero emission $37,000 plus taxes
Jan 1, 2023 to Dec 31, 2023 -- non zero emission $36,000 plus taxes
Jan 1, 2022 to Dec 31, 2022 -- non zero emission $34,000 plus taxes
Mar 19, 2001 to Dec 31, 2021 -- non zero emission $30,000 plus taxes
Jan 1, 2001 to Mar 18, 2019 -- $30,000 plus taxes
Jan 1, 2000 to Dec 31, 2000 -- $27,000 plus taxes
Jan 1, 1998 to Dec 31, 1999 -- $26,000 plus taxes
Jan 1, 1997 to Dec 31, 1997 -- $25,000 plus taxes
Jan 1, 1991 to Dec 31, 1996 -- $24,000 plus taxes
Sep 1, 1989 to Dec 31, 1990 -- $24,000
Jun 17, 1987 to Aug 31, 1989 -- $20,000

Source of Historical Rates: CCH publication 'Preparing Your Income Tax Returns' 810a

Click Here For Historical Tax Rates - Monthly Lease Limits

Click Here For Historical Tax Rates - Daily Interest Limits

Site Build It! Questions


Canadian Personal Tax

Looking for personal tax information? Personal taxes is outside the theme of this website (except for pieces and parts that relate to your home based business) as its niche is bookkeeping for the work from home business owner. But ...

... personal tax planning is an important aspect of your overall financial plan that should not be ignored. Soooo ... I am introducing you to my favorite tax site. I found this site quite a few years back and I drop in on a regular basis. is an all Canadian reference site for easy to understand tax, financial and investing information. It also has terrific calculators. The one I like is the Canadian income tax calculator . You input a few key pieces of information and it estimates your taxes - all for free. Now that's easy tax planning! After every federal or provincial budget, the information is updated to reflect the changes. is owned by a small private company located in Cedar, B.C. The web content is prepared by a husband and wife team who are retired from owning and operating a small business, with one being a retired professional accountant.

I just love this site ... and I hope you do too! Make tax planning part of your overall financial plan because you don't want to forget that ... Freedom is the Goal, Right?

2024 Personal Tax Rates

CRA has released the 2024 indexation adjustment for personal income tax and benefit amounts in a fact sheet. The chart reflects an indexation increase of 4.7% for 2024 and compares the indexed amounts to the 2021 to 2023 tax years.


How To Figure Out Your Marginal Tax Rate

In Canada we have a progressive tax system based on individual incomes not family incomes. A low rate is imposed on lower incomes and a high rate is imposed on higher incomes. Currently there are four different federal tax brackets.

The federal government has their tax schedule and each province / territory has one as well. So it's tough to know what your combined marginal tax rate is, which is the highest rate at which your last dollar of income is taxed.

If you are in the lowest tax bracket, your income is taxed just on one rate. If you are in the second to fourth tax bracket, you pay tax at different rates.

Capital gains and dividend income attract different marginal tax rates than other income because of special tax rules. Only 50% of capital gains are included in taxable income while dividends are included in taxable income at 125% or 145% with an offsetting deduction from taxes payable.

Have you ever wanted to calculate your marginal tax rate but don't know how? Well here's how to do it.

Get your latest tax return filed with the CRA. Find the Schedule 1 Federal Tax and Your Provincial Tax Schedule in your tax return package. In BC, it's form BC428 British Columbia Tax. Each province has their own tax schedule. The form will start with two letters for your province / territory followed by 428.

On page 2 of both schedules, you will see the four different tax rates imposed on various levels of incomes. Federally, they are 15%, 22%, 26%, and 29%. Provinces set their own rates.

Take your taxable income reported on line 260 of your T1 return and pick the highest tax rate you paid tax on. If you are looking at your filed return, it should be easy to spot as you will see a completed calculation in one of the four columns.

Add the federal rate from your Schedule 1 and the provincial rate from your provincial tax schedule to get your marginal tax rate.

So if you had taxable income of $45,000 in the province of BC, your marginal tax rate would be 22% plus 7.7% = 29.7%. That means on your last dollar earned, you paid 30 cents in tax. Your marginal rate is the highest rate your income is taxed.

But here's the thing. Your marginal tax rate is not your actual tax liability.

To calculate that, you want your average tax rate. Your average tax rate will be lower than your marginal tax rate.

The easiest way to calculate your average tax rate ... take your tax payable from line 435 of your T1 (page 4). Divide it by your taxable income on line 260 of your T1 (page 3).

My favorite tax site has an average tax rate table for every province or territory at varying levels of employment income, showing average tax rates for each. You can also find marginal tax rates by following the links to your province or Canada.

So why do you want to know these rates?

Well, you can calculate what if scenarios (instead of letting the computer software do it for you). Suppose you couldn't decide whether to purchase a $1000 RRSP or donate $1000 to a charity.

With the above information, we can figure out which gives you the most tax savings. Using the $45,000 taxable income again, here's how:

(1) RRSP contribution of $1000 x marginal tax rate of 22% = tax savings of $220 plus future interest/dividends are sheltered.

(2) Charitable contribution of $1000 ... 200 x 15% = $30 + ($1000-$200) x 29% = $232 = tax savings of $262

That's just one example of what you can do when you know your marginal tax rate.

It's been great chatting with about bookkeeping today.

It's been great chatting with you .
Your tutor Lake

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