Compute the automobile benefit and generate the right entry per regime
The worksheet automatically calculates the standby charge, the operating expense benefit, and the GST and QST to remit for each vehicle made available to an employee or a shareholder. It handles both tax regimes (6(1) ITA employee, 15(1) ITA shareholder) and produces a separate entry for each, with the right offset account.
The central distinction: 6(1) employee vs 15(1) shareholder
The recipient receives the vehicle in their capacity as an employee
The alternative calculation (½ × standby charge) is available if they provide a written notice and employment use is > 50%.
Deductible for the corporation (Salaries-Taxable benefits).
The recipient receives the vehicle in their capacity as a shareholder
The alternative calculation is NOT available: only the general rule (personal km × rate) applies.
NOT deductible for the corporation, reclassified as “Advances to shareholder”.
A Help, 6(1) vs 15(1) dialog in the app details each line of the table and cites the public sources (Folio S2-F3-C2, Guide T4130, ITA sections 6 and 15). This is the point to settle for each vehicle as soon as you enter it.
Initial configuration
Ledger opens Initial configuration. Confirm:
- Tax year: by default, the year in which the file's fiscal year ends.
- Per-kilometre rate: “General rule”, “Automobile dealership” (reduced rates), or “Custom”. The values are pre-filled from the Department of Finance's official announcements, from 2020 to 2026 (for 2026: $0.34/km, $0.31/km for a dealership). For a later year, Ledger uses the rates of the most recent known year and says so: confirm them against the official announcement and adjust them if needed.
The other rates (2%/month for the standby charge, 1.5% for dealerships, the 2/3 fraction for leases, the prescribed sales tax rates) are set by law and cannot be edited. Sales tax rates follow the client's province: in Quebec, GST 4/104 and 3% plus QST 9.975/109.975 and 6%; in Ontario, HST 12/112 and 9%; in Alberta and the other provinces without harmonized sales tax, GST 4/104 and 3%, with no QST. Outside Quebec, the worksheet hides the QST and the RL-1.
Vehicles tab: add an employee and a vehicle
Use the Add an employee button. Fill in:
- Employee name (e.g. “Martin Tremblay”).
- Vehicle (optional): make, model, plate.
- Type of availability: Purchased or Leased. The fields requested change with your choice: Cost of the vehicle (incl. taxes) for a purchased vehicle; Total lease costs (incl. taxes) plus Insurance included in the lease payment (annual) for a leased one.
- Months available (12 by default, fewer if the vehicle was acquired or sold during the year).
- Automobile dealership: check it if the employer is a dealer (reduced rates of 1.5%/month and $0.31/km).
- Type of beneficiary: Employee 6(1) or Shareholder 15(1). A critical choice: it determines the slip and the entry.
- Total km, personal km: the worksheet calculates the employment use percentage.
- Standby charge reimbursement and operating cost reimbursement (within the year OR within the following 45 days).
- Written notice for the alternative calculation: check it only under the employee regime, if the vehicle is used > 50% for employment.
In Insurance included in the lease payment (annual), enter only the insurance portion included in the lessor's monthly payment (bundled lease). If the insurance is billed separately by a third-party insurer (the most common case), this field must be $0. Otherwise, the formula (2/3) × (E − F) drops the standby charge to zero, which often zeroes out the entire benefit.
Understand the calculation details
Each vehicle shows a Calculation details panel, made up of the three blocks below:
Standby charge benefit
Operating cost benefit
GST and QST to remit
The rates follow CRA Guide T4130, sections 4.3 and 4.4, and the client's province: in Quebec, 4/104 for the GST and 9.975/109.975 for the QST on the gross standby charge, 3% and 6% on the net operating expenses; in Ontario, HST 12/112 and 9%; in Alberta and elsewhere outside Quebec, GST 4/104 and 3%, with no QST. They cannot be edited.
Summary tab: overview and reminders
The summary totals:
- The total taxable benefit (T4 + T4A combined).
- The 6(1) Employees subtotal (the amount to report in box 34 of the T4, and in box W of the RL-1 in Quebec).
- The 15(1) Shareholders subtotal (the amount to report in box 28 of the T4A).
- The taxes to remit (to report in the next sales tax return): GST and QST in Quebec, HST in Ontario, GST only in Alberta and the other provinces without harmonized sales tax.
The Important reminders section at the bottom lists the routine checks: the Quebec travel log (s. 41.1.4 TA, $200 penalty per employee for failure to comply, s. 1049.34 TA), the written notice for the alternative calculation, the remittance of taxes, the allocation over pay periods, and a note on the 15(1) shareholder regime (not deductible).
Entry tab: two separate entries if the file is mixed
If the file has both 6(1) employee and 15(1) shareholder vehicles, Ledger shows a banner and prepares two independent entries:
- Employees 6(1): DR “Salaries-Taxable benefits” (deductible) / CR source account of the automobile expense / CR GST (or HST) payable / CR QST payable (Quebec only).
- Shareholders 15(1): DR “Advances to shareholder” (receivable on the balance sheet, not deductible) / CR source account of the automobile expense / CR GST (or HST) payable / CR QST payable (Quebec only).
For each entry, choose:
- The receiving account (Salaries-Taxable benefits for 6(1), Advances to shareholder for 15(1)).
- The source account of the expense (Fuel, Auto, Auto operating costs…) where the personal portion had been recorded.
- The taxes payable accounts: GST (HST in Ontario), and QST in Quebec only.
The receiving account amount is calculated automatically and equals the regime's total taxable benefit (GST and QST included). By default, the source account amount is the benefit minus GST and QST (since the taxes are already included in the benefit, they are extracted rather than added). You can adjust it if your client allocates differently.
Click Submit to adjustments for each block.
The Print button produces a PDF with the summary, the detail per vehicle (standby charge, operating expenses, GST/QST), the entries and the regulatory reminders. The firm's branding is applied.
Frequently asked questions
The calculation gives the same amount under 6(1) and 15(1). Is that normal?
Yes, often. The only calculation difference is that the alternative method (½ × standby charge) is available under the employee regime. Since that method is only retained when it gives a lower amount, if the general rule already gives the lowest result (low personal kilometres), both regimes arrive at the same figure. The difference shows up when personal km > 20,004 km × employment use, with an expensive vehicle.
The employee did not provide their travel log on time. What should I do?
In Quebec, the employee must give the employer a copy of the log no later than the 10th day after the end of the year; otherwise, a $200 penalty per employee applies (s. 1049.34 TA). Without a log, calculate with a presumed personal use percentage of 100% (maximum benefit) until the log is produced.
Do the GST and QST on the benefit have to be paid separately?
No. They are added to the next sales tax return (“GST/QST to remit”). The generated entry already credits them to the taxes payable accounts.