Do your employees use their personal vehicles for work-related travel? If so, you may provide them with an automobile or motor vehicle allowance to help cover expenses. It is important that you understand your responsibilities around these allowances.
What is an automobile or motor vehicle allowance?
An automobile or motor vehicle allowance is any payment that you give your employees for using their own vehicle in connection with their employment. This payment forms part of their salary or wages. An allowance is a taxable benefit to your employees unless it is based on a reasonable per-kilometre rate.
Please visit the CRA website here for additional informtion.