2024 Automobile Deduction Limits and Expense Benefit Rates for Business

The ceiling on the capital cost of passenger vehicles for capital cost allowance (CCA) purposes has increased from $36,000 to $37,000 (plus applicable federal and provincial sales taxes) for non-zero-emission vehicles it remains at $61,000 for eligible zero-emission passenger vehicles. These ceilings restrict the cost of a vehicle on which CCA may be claimed for business purposes. The limit on deductible leasing costs has also increased from $950 to $1,050 per month (plus applicable federal and provincial sales taxes). This limit, which ensures that the level of deductions for leased and purchased vehicles is consistent, is one of two restrictions on the deduction of automobile lease payments. A separate restriction prorates deductible lease costs where the value of the vehicle exceeds the capital cost ceiling. The limit on the deduction of tax-exempt allowances paid by employers to employees increased from 68¢ to 70¢ per kilometer for the first 5,000 kilometers driven and 64¢ for each additional kilometer. The allowance amounts reflect the key cost components of owning and operating an automobile, such as depreciation, financing, maintenance, and fuel costs.