Employers reimburse their employees allowance based on the number of kilometers traveled in the course of their employment when using their own vehicle. Generally speaking, for these allowances to be eligible for a GST/HST and QST refund for the employer, and for them not to constitute a taxable allowance for employees, a series of conditions must be met:
- A detailed travel log is created indicating:
-
- The date
- The destination
- The purpose of the trip
- The number of kilometers traveled
- The amount of the allowance reimbursed per kilometer must be reasonable
If employers have a policy of maximizing the amount of reimbursement per kilometer traveled in a province in 2025, they will reimburse the rate of 72 cents per kilometer, for the first 5,000 KM and they will reimburse at the rate of 66 cents for all kilometers reimbursed above 5,000 KM.
Advataxes sends an alert when an employee reaches 5,000 KM, in order to reduce the rate to 66 cents. You can consult the maximum authorized kilometer rates per year on the website of the Canada Revenue Agency and Revenu Québec. The GST/HST and QST recovery is automated as per the configuration of the account.
With Advataxes, the kilometers traveled can be calculated using the app or the web connection with the distance calculator (see our distance calculator page) and it contains the fields to populate tax authorities required information.
If you instead provide your employees with vehicles or if you grant fixed amount allowances, consult our “Kilometer log” page.