# Company pays per KM but it's really low - can I deduct something?



## iherald (Apr 18, 2009)

My company pays me a flat rate km rate for km I drive for work. It's not for home to work, but while I'm at work. However, they pay $0.15 per km. I see that the CRA allows $0.53 for the first 5000 km and then $0.47 per afterwards. 

Obviously there is a huge difference, can I deduct $0.38 per km (the difference between the two)?


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## stardancer (Apr 26, 2009)

1. Is this mileage counted as income on your T4?
2. Does the company give you a completed T2200 for tax purposes?

If yes, to the above, then you must do the following:
- keep track of all the mileage (personal and work) for the year, and keep track of the work mileage
- keep every single receipt for gas, repairs, insurance and permits for the year as these will be prorated for work purposes
- keep the parking receipts you collect for work purposes

Then you get the T2200 from the employer, and complete a T777 for motor vehicle expenses. If it works out, you have a deduction against your income.

If the mileage from the company is not on your T4 as a taxable benefit, or if the company refuses to give you a T2200, then you are out of luck; you will not be able to deduct any motor vehicle expenses. If the mileage is a non-taxable benefit, then it is basically free money.

http://www.cra-arc.gc.ca/ebci/cjcm/srch/bscSrch?lang=en&bscSrch=employment+expenses

Unless you are self-employed, it is not adviseable to deduct CCA on your vehicle. It might be worthwhile to deduct lease payments or interest payments on the car loan. But that's another story.


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## kcowan (Jul 1, 2010)

I think the CRA rate/km is an all-in rate. So claiming CCA will be scrutinized/disallowed if you use the CRA rate. Same for leasing costs. Also you have to claim gross costs and then net what the company reimburses. I am sure they pay for client-related parking so that also needs to be netted. Remember that the CRA does not allow any claim for travel to and from work, so your gross will include that and then have the % used for work.


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## TaxGuy (Apr 7, 2009)

The mileage you get at $0.15 will not be reported on your T4 because it is below the taxable allowance amount. They must not report it!

If you think the reimbursement is too low, you will need to add the $0.15/KM you are paid throughout the year to your employment income. Then you claim your actual costs. You will have to obtain a T2200 from the employer and claim the expenses on the T777. 

This may or may not work to your advantage but it would be worthwhile doing the calculation at $0.15.

Claiming the difference or claiming the $0.53/$0.47 as an expense would likely raise questions and you would get questioned on it (it’s not allowed).

With respect to CCA, if you opt to claim all the actual expenses, then claim CCA as well. There is no issue whatever with claiming CCA on your vehicle (a house is a different matter).


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