BU547 Lecture Notes - Lecture 13: Capital Cost Allowance, Mobile Phone, Financial Institution
Document Summary
An allowance is an amount paid by the employer to the employee without a requirement for the employee to substantiate the amount spent (that is, the employee does not provide the employer with receipts). The general rule is that allowances are taxable. Allowances that are exceptions to the general rule above: Allowances: motor vehicles used in travelling in the performance of employment duties. The cra sets limits on the reasonability of the per-kilometre amount of a motor vehicle allowance. If the per-kilometre rates are greater than the amounts below, the entire amount becomes taxable, not just the incremental difference. In 2018, the limits are sh. 55 per kilometre for the first 5,000 kilometres driven, and. If an allowance is either unreasonably high or unreasonably low, it is included in the employee"s income as a taxable benefit, and the employee can then deduct expenses to the extent that the employee qualifies to deduct those expenses.
