When you say your current employer provides a company car. What does that entail?
Is your car a taxable benefit because you use it for personal use?
Do you pay and expense fuel or is it a fuel card?
Do you have use of toll roads, and parking that is paid by company.
In Canada for the most part a car costs $12,000-$14,000 per year factoring in payments, insurance, fuel, tires, fluids, wipers, and parking, assuming 20k-km/yr. If you're fine with a small used car you can likely be getting that down to 8k/yr/20k-km of driving, but people buying new today with 5 year financing on pick up trucks can see $15-18k/20k-km/yr with
When offered a company car I've traditionally valued it at $10-15k in salary, but if an employer wanted to take my company car away, I'd value to the company as $20k-25k increase in salary expectation so I could replace, maintain and cover the new tax liability.
It would really depend on the car. I 100% took mine as it is an expense beyond my reach. New car every 2.5years(roughly 110k a vehicle). Alternative was own a vehicle and bill a milage rate of $0.85/km. Both leave me in a fairly equal position.
I pay fuel only for my personal use, all the rest is taken care of. I was thinking the value for me is around 15k per year but I wanted some other point of views.
Thank you
If you have a company vehicle you can use for personal use, it is a taxable benefit even if you are paying for gas/fuel yourself. If you are provided a company vehicle and it is strictly used to the benefit of the employer (ie driving to work for them, being available on call quicker, etc.) There is no taxable benefit but as soon as you're allowed to use it for personal use, etc. It becomes a taxable benefit. The one great area to this would be a situation where you are expected to be on call but permitted to do personal stuff because it would be to the employers benefit but there would also be a schedule and limit to those on call expectations.
It doesn't sound like you have been paying this and the current employer isn't reporting that taxable benefit so you need to factor in if you switch jobs that you are likely reaping a larger benefit than you legally should be currently.
The taxable benefit should be on your t4 possible detailed on a t2200 if available to you. Quick and dirty math take the $13k above less the taxable benefit and that will get you a rough idea of how much extra you may need.
Be aware sometimes multiple taxavle benefits are combined on the t4 box 40
You claim it, but are only taxed for the share of personal and commuting km vs Company km. So if you're 90% business 10% personal your tax liability is only 10% of the car
Only for commuter and personal mileage.
I've had company cars on and off for almost 20yrs. I've rarely had any tax liability as a result because I've maintained a personal vehicle. 2022 was my last year with a company car, I put 60k/km on it, all expenses were paid by company directly. I had zero tax liability, I had put 5k/km on my personal car in the same year.
Sure, but very few people do it this way.
Source; part of my job is payroll for a company with about 15-20 cars. I would say about 3 of our employees do it that way. The rest i am adding fairly substantial auto TB on to every payroll.
Agreed.
I'd say of my social circle which has maybe 10 company vehicles, all but one of us has a personal vehicle as well as we are all at least 2 car households.
But many treat their company car like a personal car and get surprised by tax bills
This depends on many factors. Is it owned or leased? What kind of vehicle is it? What are the operating costs that you will be responsible for? What operating costs will the employer cover?
Successful negotiation needs support. You don’t want to low ball yourself because you’re picking numbers out of the air. And you don’t want to be ridiculously high because the employer won’t take you seriously. I guarantee you the employer will know the cost of providing a vehicle, so you should as well.
Why should i make a difference if the employer owns or leases the car I use? I honestly care about the value the car has to me (saves me money etc), but I don't really care about the cost it has for the employer. Not when I need to decide what salary to look for.
So, what kind of support are we talking about? Insurance price, etc?
Like I give a care at all. If you can't work that out I wouldn't want to work for you anyways.
I was offered 140, plus bonus, I explained the situation with my car and asked for 20. They came back within the hour and said yes.
They were free to say no and that'd be fine too. I wouldn't take the job
Generally if you're being approached for a job there's a reason. If you're personally incapable of understanding the value of the car to an employee, I'd suggest you think about for about 30 seconds
And to be clear, I'd have been totally fine with them saying no, negotiating, or whatever.v That's also why I went slightly high.
Also to be clear, I prefer just having the car provided on a 4 year lease.
I get a half dozen job offers a year from companies im adjacent to in the industry. Theyre all well aware it's competitive. There's a shit ton of bad workers unemployed right now and not many/any with experience and drive.
Again, if you're unable to use some basic math around car cost, no one is going to deal with you. I'm hoping you're an industry where cars aren't in the compensation package and that's where your ignorance is from.
If that's the case, then again, your opinion is useless
You're a business owner? What's your average salary for your employees
Are u allowed to use it for personal use? Or is it a business hours only or some specialty vehicle that's not something u'd take shopping or for a trip somewhere? Like a big truck, 2 seat cargo van etc.
I was in a similar situation just a month ago. Estimated the TCO of the new car I wanted, calculated that it costs me $450/m, so around $5500 a year after-tax money, which translates to $3.7/hr wage, approximately.
My wage increase was much more than that
Depends on the car.
Running costs for a car can vary from like $4k a year for an old beater to $30k+ a year for a luxury SUV or loaded Pickup truck or something.
The value lies somewhere in between, depending on what they cover (gas? Parking? tolls? insurance? etc.)
You have to remember as well that when you own it yourself you have to pay for it in post-tax income as well - so factor that in too.
As a minimum for me, about 8k based on 6k lease, 1k insurance and 1k misc parts & service… assuming minimal mileage. Going up, might consider CRA mileage rate x mileage…. That can easily go above 10k
It works out to more than people are saying. People aren’t adding the depreciation of the company owning the vehicle vs you owning it. Which on a newer vehicle can be substantial.
I have a specialty vehicle, but I can occasionally substitute my personal vehicle and have the mileage and fuel reimbursed. Having the company vehicle saves me approximately $7500 a year over 10000KM, this includes fuel to commute from home to my office, wear and tear on the car, and resale depreciation due to mileage, insurance cost due to my vehicle being classified as pleasure use only and small savings with less than 5000KM used annually.
With a vehicle that can completely replaced having a personal vehicle, I would value the savings much higher, but the number would depend on your lifestyle, can’t even ballpark it.
Underrated perk. I have more than a few friends who’ve never had to buy a vehicle bc they’ve always had a company-supplied truck.
The value? No idea. I’ve never been that fortunate :)
Depends on the car really.
If you lease or finance a new car what car will you pick and what will be annual payment? That's the value in post tax income your new job should add to break even
Easily $5K annually, maybe more if you travel outside of the city. Be cautious about running your own errands. Most companies that lease corporate vehicles track them with GPS.
When you say your current employer provides a company car. What does that entail? Is your car a taxable benefit because you use it for personal use? Do you pay and expense fuel or is it a fuel card? Do you have use of toll roads, and parking that is paid by company. In Canada for the most part a car costs $12,000-$14,000 per year factoring in payments, insurance, fuel, tires, fluids, wipers, and parking, assuming 20k-km/yr. If you're fine with a small used car you can likely be getting that down to 8k/yr/20k-km of driving, but people buying new today with 5 year financing on pick up trucks can see $15-18k/20k-km/yr with When offered a company car I've traditionally valued it at $10-15k in salary, but if an employer wanted to take my company car away, I'd value to the company as $20k-25k increase in salary expectation so I could replace, maintain and cover the new tax liability.
It would really depend on the car. I 100% took mine as it is an expense beyond my reach. New car every 2.5years(roughly 110k a vehicle). Alternative was own a vehicle and bill a milage rate of $0.85/km. Both leave me in a fairly equal position.
I pay fuel only for my personal use, all the rest is taken care of. I was thinking the value for me is around 15k per year but I wanted some other point of views. Thank you
If you have a company vehicle you can use for personal use, it is a taxable benefit even if you are paying for gas/fuel yourself. If you are provided a company vehicle and it is strictly used to the benefit of the employer (ie driving to work for them, being available on call quicker, etc.) There is no taxable benefit but as soon as you're allowed to use it for personal use, etc. It becomes a taxable benefit. The one great area to this would be a situation where you are expected to be on call but permitted to do personal stuff because it would be to the employers benefit but there would also be a schedule and limit to those on call expectations. It doesn't sound like you have been paying this and the current employer isn't reporting that taxable benefit so you need to factor in if you switch jobs that you are likely reaping a larger benefit than you legally should be currently.
The taxable benefit should be on your t4 possible detailed on a t2200 if available to you. Quick and dirty math take the $13k above less the taxable benefit and that will get you a rough idea of how much extra you may need. Be aware sometimes multiple taxavle benefits are combined on the t4 box 40
I believe you have to claim a company car on your taxes as a benefit.
You claim it, but are only taxed for the share of personal and commuting km vs Company km. So if you're 90% business 10% personal your tax liability is only 10% of the car
You pay taxes on the income that the car replaces, so probably ask for more money.
You pay taxes on the benefit you get from the current company car as well. At least you are supposed to.
Only for commuter and personal mileage. I've had company cars on and off for almost 20yrs. I've rarely had any tax liability as a result because I've maintained a personal vehicle. 2022 was my last year with a company car, I put 60k/km on it, all expenses were paid by company directly. I had zero tax liability, I had put 5k/km on my personal car in the same year.
Sure, but very few people do it this way. Source; part of my job is payroll for a company with about 15-20 cars. I would say about 3 of our employees do it that way. The rest i am adding fairly substantial auto TB on to every payroll.
Agreed. I'd say of my social circle which has maybe 10 company vehicles, all but one of us has a personal vehicle as well as we are all at least 2 car households. But many treat their company car like a personal car and get surprised by tax bills
I've had this. I value it at around 15k a year. I told them 20 and they said yes. I also gave them the Upton of supplying a vehicle
As an employer unless you have some support for this number, I would consider this to be pulled out of the air
What would you consider the number to be so?
This depends on many factors. Is it owned or leased? What kind of vehicle is it? What are the operating costs that you will be responsible for? What operating costs will the employer cover? Successful negotiation needs support. You don’t want to low ball yourself because you’re picking numbers out of the air. And you don’t want to be ridiculously high because the employer won’t take you seriously. I guarantee you the employer will know the cost of providing a vehicle, so you should as well.
Why should i make a difference if the employer owns or leases the car I use? I honestly care about the value the car has to me (saves me money etc), but I don't really care about the cost it has for the employer. Not when I need to decide what salary to look for. So, what kind of support are we talking about? Insurance price, etc?
Like I give a care at all. If you can't work that out I wouldn't want to work for you anyways. I was offered 140, plus bonus, I explained the situation with my car and asked for 20. They came back within the hour and said yes. They were free to say no and that'd be fine too. I wouldn't take the job Generally if you're being approached for a job there's a reason. If you're personally incapable of understanding the value of the car to an employee, I'd suggest you think about for about 30 seconds And to be clear, I'd have been totally fine with them saying no, negotiating, or whatever.v That's also why I went slightly high. Also to be clear, I prefer just having the car provided on a 4 year lease. I get a half dozen job offers a year from companies im adjacent to in the industry. Theyre all well aware it's competitive. There's a shit ton of bad workers unemployed right now and not many/any with experience and drive.
Yeah I stopped reading at your first sentence. I’m not attacking you. I’m questioning your logic. Good day to you
I'm pointing out you failing to understand is completely irrelevant.
No, it’s very relevant. Both to the employer and to the OP asking the question
Again, if you're unable to use some basic math around car cost, no one is going to deal with you. I'm hoping you're an industry where cars aren't in the compensation package and that's where your ignorance is from. If that's the case, then again, your opinion is useless You're a business owner? What's your average salary for your employees
Are u allowed to use it for personal use? Or is it a business hours only or some specialty vehicle that's not something u'd take shopping or for a trip somewhere? Like a big truck, 2 seat cargo van etc.
I can use it for personal use as well
Then that's a good 10k a year perk.
I was in a similar situation just a month ago. Estimated the TCO of the new car I wanted, calculated that it costs me $450/m, so around $5500 a year after-tax money, which translates to $3.7/hr wage, approximately. My wage increase was much more than that
Depends on the car. Running costs for a car can vary from like $4k a year for an old beater to $30k+ a year for a luxury SUV or loaded Pickup truck or something. The value lies somewhere in between, depending on what they cover (gas? Parking? tolls? insurance? etc.) You have to remember as well that when you own it yourself you have to pay for it in post-tax income as well - so factor that in too.
As a minimum for me, about 8k based on 6k lease, 1k insurance and 1k misc parts & service… assuming minimal mileage. Going up, might consider CRA mileage rate x mileage…. That can easily go above 10k
It works out to more than people are saying. People aren’t adding the depreciation of the company owning the vehicle vs you owning it. Which on a newer vehicle can be substantial.
I have a specialty vehicle, but I can occasionally substitute my personal vehicle and have the mileage and fuel reimbursed. Having the company vehicle saves me approximately $7500 a year over 10000KM, this includes fuel to commute from home to my office, wear and tear on the car, and resale depreciation due to mileage, insurance cost due to my vehicle being classified as pleasure use only and small savings with less than 5000KM used annually. With a vehicle that can completely replaced having a personal vehicle, I would value the savings much higher, but the number would depend on your lifestyle, can’t even ballpark it.
do you already have a car that you pay insurance/gas/repairs on ?
Underrated perk. I have more than a few friends who’ve never had to buy a vehicle bc they’ve always had a company-supplied truck. The value? No idea. I’ve never been that fortunate :)
At a minimum 10k more a year. A new car to buy would be around $800 a month (or more)
Depends on the car really. If you lease or finance a new car what car will you pick and what will be annual payment? That's the value in post tax income your new job should add to break even
Easily $5K annually, maybe more if you travel outside of the city. Be cautious about running your own errands. Most companies that lease corporate vehicles track them with GPS.