When an employer makes an automobile available to an employee, the employee must keep a logbook of the trips made with the automobile. The employee must give the employer a copy of the logbook so that the employer can calculate the taxable benefit derived from the use of the automobile.
The employee must enter the following information in the logbook:
- the total number of days that the automobile was made available to the employee during the year;
- the total number of kilometres travelled (on a daily, weekly or monthly basis) in the days that the automobile was made available to the employee.
For each trip made to perform his or her duties, the employee must also enter the following information on a daily basis:
- the place of departure and the place of destination;
- the number of kilometres travelled between those two places; and
- any information necessary to establish that the trip was made by the employee to perform his or her duties.
The same rules apply when the automobile is made available to a person related to the employee. Employees who use their own automobiles should keep a logbook if they wish to claim a deduction for automobile expenses incurred to carry out their duties.
Simplified logbook for individuals in business
An individual in business can also keep a logbook during the year for a period of at least three consecutive months (known as the “sample period for the year”), which can be used to extrapolate the percentage of business use for the entire year. A simplified logbook can be used when the following conditions are met:
- The individual kept a comprehensive logbook of his or her motor vehicle use over a typical 12-month period starting in 2009 or later (known as the “base year”), which has since served as a reference period for subsequent years. This period is not required to correspond to a calendar year.
- The percentage of business use for the sample period for the year is within 10 percentage points of that determined for the same period in the base year.
- The percentage of business use for the year is within 10 percentage points of that determined for the base year.