Tax Unit 3

standby charge

Employer owns the vehicle:

• 2% x (full original cost of vehicle incl. sales tax x # of months available when employer owned the vehicle)

Employer leases the vehicle:

• 2/3 x (lease PMTs for the year incl. tax x portion of lease PMTs made for insurance)

reduction in standby charge

reduced if the following all apply:

• required to use vehicle for employment duties

• used primarily (more than 50%) for employment purposes

• personal-use km for the year is less than 20,004 (or 1,667 per month, if used for less than 12 months)

calculation:

• personal-use km / (1,667 x # of months available)

operating cost benefit on employer-owned vehicle

when vehicle is used < 50% for employment purposes

• personal km x prescribed rate ($0.34 in 2025, $0.33 in 2024)

when vehicle is used > 50% for employment purposes

• lesser of:

  • personal km x prescribed rate

  • ½ standby charge

operating cost benefit on employee-owned or employee-leased vehicle

• determined if employee owns or leases vehicle & the employer pays the operating costs

• (personal km / total km) x actual operating costs paid by employer

stock options - public company

• exercise date: benefit = (FMV on exercise date - exercise price) x # of shares acquired

• selling date: TCG/ACL = 50% x # of shares sold x (POD less FMV on exercise date)

• conditions for Div C deduction: FMV of share on grant date <= exercise price (NOT IN THE MONEY)

• timing of Div C deduction: year option is exercised (same as income inclusion)

stock options - CCPC

• exercise date: no impact

• selling date: employee benefit = (FMV on exercise date - exercise price) x # of shares sold; TCG same as public company

• conditions for Div C deduction: FMV of share on grant date <= exercise price (NOT IN THE MONEY); OR FMV of share on grant date > exercise price (IN THE MONEY) & shares held for at least 2 years after exercised

• timing of Div C deduction: year the shares are sold (same as income inclusion)

deductible home office expenses

home office expenses deductible if one of the following conditions are met:

• place where individual principally (50% or more) performs their employment duties; OR

• both of the following:

  • exclusively used for purpose of earning employment income during the period

  • used on a regular & continuous basis for meeting customers or other persons in the ordinary course of performing their employment duties

home office expenses potentially deductible

different categories depending on the type of employee

moving expenses

conditions

• residence must be at least 40 km closer to new work/school location

• expenses that exceed income

• expenses must be paid and NOT reimbursed

qualified moving expenses, to extent income is earned in new location

• travelling costs

• transportation & storage costs

• cost of meals & accommodations up to 15 days

• lease cancellation on old residence

• selling costs of old residence (if was owned & sold)

• legal fees & title transfer of new residence (if old residence owned was sold)

• simplified method for meals = flat rate of $23, daily max of $69, x per-km rate

spousal support

• child support payments are not deductible to person making the PMT & are not taxable to the recipient (in-n-out transaction)

• spousal support that is taxable/deductible to payer/recipient = total payments made in the year less amounts for child support

annual childcare expense limits for lower-income earner

actual child care expenses incurred

• actual amount paid must be substantiated by receipts, other than for boarding school or overnight camp + limited amount for boarding school or overnight camp

• max amount that may be claimed for child attendance at board school/overnight camp:

  • $200/week for each child under age of 7

  • $275/week for child who is eligible for DTC

  • $125/week for other eligible children

max childcare deduction for lower-income earner

least of 3:

• actual amount paid for childcare

• total of annual limits

• 2/3 taxpayer’s earned income

max childcare deduction for higher-income earner

allowed to deduct childcare expenses for period where lower income earner was basically incapacitated (e.g., FT/PT school, hospitalized, prison lol)

max deduction is least of:

• actual amount paid for childcare

• sum of $200 x children under age of 7; $275 x # of children eligible for DTC; $125 x # of other eligible children

• 2/3 x taxpayer’s earnred income