Norman Grosman of Grosman, Grosman, & Gale LLP maintains that vehicle allowances are typically treated as a form of compensation and not usually as a reimbursement from the employer for the business use of an employee’s vehicle. Many employers argue that their vehicle allowance obligations cease on termination since the employee is no longer using their vehicle for business purposes. In the absence of a written term in the employment contract (e.g. a termination clause that makes it clear that the vehicle allowance is not part of the severance entitlement), this argument tends to be rejected by the Courts since most vehicle allowances are treated as part of an employee′s overall compensation. In other words, vehicle allowance should be included in an employee′s severance package in most cases (e.g. absent a contract to the contrary).
Click here to view this answer in French.
About the Canadian Professional Sales Association
Since 1874, we’ve been developing and serving sales professionals by providing programs, benefits, and resources that help you sell more, and sell smarter.
Contact us today at MemberServices@cpsa.com or 1-888-267-2772 to see how we can help you and your team reach new heights in sales success.
Copyright ©2013 by The Canadian Professional Sales Association
For permissions, contact firstname.lastname@example.org.
- What is the 2013 cents per kilometre limit on vehicle allowances in Canada?
- Should Sales People be Using a Company Car or a Driver-Owned one?
- What kinds of vehicle cost reimbursement programs exist, and which should I use for my sales team?
View the full list of Ask A Sales Expert questions and answers.
Got a sales, marketing, or business-related question? Email us at email@example.com.