News & Events Payroll Bulletins: 2026 Automobile Deduction Limits and Periodic Leave Rate Adjustments

Payroll Bulletins: 2026 Automobile Deduction Limits and Periodic Leave Rate Adjustments

Dear CLR Members,

Finance Canada has released updated automobile deduction limits and expense benefit rates for 2026, including changes to mileage allowances and capital cost allowance (CCA) thresholds. Effective January 1, 2026 the annual mileage allowance has been increased to $0.73 per KM for the first 5,000 KM and $0.67 thereafter.

Please review the 2026 Automobile Deduction Limits and Expense Benefit Rate bulletin as well as the 2026 Periodic Leave Rate Adjustments bulletin for details of these changes related to both mileage allowances and periodic leave adjustments under the collective agreements.

We encourage employers to ensure their payroll teams are aware of these updates. If you have any questions please do not hesitate to contact us.

Please click the links below to read the full bulletins: Read the bulletins here.

Resources:
Review the Government of Canada’s announcement on 2026 automobile income tax deduction limits and expense benefit rates here.

Sincerely,

Your CLR Team