How to Claim Mileage on Taxes in Canada (2026 CRA Mileage Log Book Guide)

If you use your personal vehicle to earn income in Canada, understanding how to claim mileage on taxes in Canada can save you thousands of dollars every year. The Canada Revenue Agency (CRA) allows self-employed individuals, sole proprietors, partnerships, and eligible employees to deduct the business portion of their vehicle expenses — but only when backed by a compliant CRA mileage log book.

Without an accurate CRA mileage log, an auditor can disallow your motor vehicle deduction or reduce your claim, leading to reassessment, back taxes, and interest. This guide walks you through who qualifies, what the CRA requires in your mileage log book, step-by-step instructions for claiming vehicle expenses on your Canadian tax return, and how to export your logs for tax filing.

Who Can Claim CRA Mileage Deductions?

Not everyone who drives for work can deduct vehicle costs on their personal tax return. The CRA permits motor vehicle expense deductions for four main groups:

• Self-employed individuals, freelancers, and independent contractors who drive for client visits, deliveries, property inspections, or business errands (reported on Form T2125)
• Commissioned employees who are required to pay their own vehicle expenses under their employment contract (with a signed Form T2200 from their employer)
• Salaried employees required to work away from their employer's regular place of business and pay their own travel costs without a non-taxable allowance (with a signed Form T2200)
• Partners in a business partnership who incur unreimbursed personal vehicle expenses to earn partnership income

Important Distinction: Actual Expenses vs. Per-Kilometre Rates One of the most common misconceptions about CRA mileage is assuming you simply multiply your business kilometres by the 2026 CRA per-kilometre rate of 73¢/km. In Canada, the 73¢/67¢ per-kilometre rate is the maximum tax-free allowance an employer or corporation can pay an employee. When claiming mileage directly on your personal tax return (Form T2125 or Form T777), you must use the actual expense method, prorated by the business-use percentage shown in your CRA mileage log book.

CRA Mileage Log Book Requirements: What to Record

The CRA does not accept rough estimates or end-of-year guesses. According to CRA guidance on motor vehicle records, the best evidence to support the use of a vehicle is an accurate mileage log book maintained throughout the year.

For every business trip, your CRA mileage log must include:

• Date of the trip
• Destination — the street address, city, or client/business name you drove to
• Purpose of the trip — a clear business reason such as "client consultation," "inventory pickup," "showing property at 45 Maple Ave," or "site inspection"
• Kilometres driven — the exact distance driven for that business trip

In addition to trip-by-trip entries, your CRA mileage log book must capture your annual odometer totals:

• Start-of-year odometer reading at the start of your fiscal period, usually January 1 (or the day you acquired the vehicle)
• End-of-year odometer reading at the end of your fiscal period, usually December 31 (or the day you disposed of the vehicle)
• Total kilometres driven during the tax year (business + personal combined)
• Total business kilometres driven during the tax year

Sample CRA Mileage Log Book Entry Table

The CRA Business-Use Percentage Formula

The CRA uses your mileage log totals to calculate your business-use percentage — the share of your total annual driving that was for business:

Business-Use % = (Total Business Kilometres ÷ Total Kilometres Driven in the Year) × 100

For example, if your odometer started at 40,000 km on January 1 and ended at 65,000 km on December 31, your total distance driven is 25,000 km. If your CRA mileage log shows 15,000 km of business trips, your business-use percentage is 60%. You can then deduct 60% of your eligible vehicle operating expenses.

How to Claim Mileage on Taxes in Canada (Step-by-Step)

Once your mileage log book and receipts are totaled for the year, here is exactly how to claim mileage on your Canadian income tax return depending on your tax situation:

Step 1: Total Your Kilometres From Your Logbook

Calculate your business kilometres and total annual kilometres for each vehicle you used during the fiscal period. If you changed vehicles mid-year, record the odometer dates and readings for each vehicle separately.

If you track your driving in automileage.app, most of this step is already done: your business kilometres, logged kilometres, and business-use percentage are calculated for each vehicle and aligned to your fiscal year. Just check your total against your fiscal-year start and end odometer readings, which you can record right in the app.

Step 2: Gather All Eligible Vehicle Expense Receipts

Add up your total annual spending across each CRA motor vehicle category:

• Fuel and oil (gasoline, diesel, propane, or EV charging costs)
• Insurance premiums (full annual auto policy plus any commercial riders)
• Licence and registration fees
• Maintenance and repairs (oil changes, winter tires, brakes, washes, tune-ups)
• Eligible leasing costs (capped at CA$1,100/month before tax in 2026)
• Eligible loan interest (capped at CA$350/month in 2026)
• Capital cost allowance (CCA) — depreciation up to CA$39,000 for Class 10.1 passenger vehicles or CA$61,000 for Class 54 zero-emission vehicles (calculated separately in Area A of Form T2125 and claimed on line 9936, not on line 9281)

Step 3: Complete the Correct CRA Tax Form

Option A: Self-Employed, Freelancers & Independent Contractors (Form T2125)

1. Open Form T2125 (Statement of Business or Professional Activities) in your tax software or return.
2. Scroll to Chart A – Motor Vehicle Expenses.
3. Enter your business kilometres on Line 1 and total kilometres on Line 2.
4. Enter your total annual expenses by category (amounts 3 to 11, with the total on amount 12).
5. Multiply total vehicle expenses by your business-use fraction (Business km ÷ Total km).
6. Add 100% of any business parking fees and supplementary business insurance (these do not need to be prorated by personal kilometres).
7. Carry the final deductible amount to Line 9281 (Motor vehicle expenses, not including CCA) in Part 4 of Form T2125. Claim the business portion of your vehicle's CCA separately on line 9936.

Option B: Salaried or Commissioned Employees (Form T777 + Form T2200)

1. Obtain a completed and signed Form T2200 (Declaration of Conditions of Employment) from your employer confirming you were required to use your own vehicle and did not receive a non-taxable reasonable per-kilometre allowance.
2. Complete the Calculation of Allowable Motor Vehicle Expenses section on Form T777 (Statement of Employment Expenses).
3. Enter your business and total kilometres, apply your business-use percentage to your operating costs, and subtract any rebates, allowances, or reimbursements you received that were not included in your income.
4. Claim the allowable deduction on Line 22900 (Other employment expenses) of your T1 General return. Keep your signed T2200 and CRA mileage log book on file in case the CRA requests them.

Option C: Incorporated Business Owners (Per-Kilometre Allowance)

If you operate through a corporation and drive your personal vehicle for corporate business, your corporation can reimburse you tax-free using the 2026 CRA km rates (73 cents/km for the first 5,000 km and 67 cents/km thereafter in the provinces). Your corporation deducts the allowance as a business expense, and you receive the cash tax-free — provided you maintain a trip-by-trip CRA mileage log verifying every kilometre reimbursed.

The CRA Simplified Logbook Method

Keeping a full logbook every day for years can feel repetitive if your driving routine never changes. To reduce paperwork for established businesses, the CRA offers a simplified logbook method:

1. Establish a Base Year: Keep a complete, 12-month CRA mileage log book covering a full year of business operations. This establishes your baseline business-use percentage (for example, 68%).
2. Keep a 3-Month Sample Log: In a subsequent tax year, maintain a continuous three-month sample logbook (for example, April 1 to June 30).
3. Check the 10% Threshold: Calculate your business-use percentage during the three-month sample period and compare it to the same three-month period in your base year. If it is within 10 percentage points of the base-year quarter, you can calculate your annual business-use percentage using the formula: Annual Business Use % = (Base Year Annual % ÷ Base Year 3-Month %) × Current Year 3-Month %
4. Stay Within 10% Overall: The resulting calculated annual percentage must also be within 10 percentage points of your base-year annual percentage.

Even when using the simplified logbook method, you must still record your January 1 and December 31 odometer readings each year and retain both your original base-year logbook and your 3-month sample logbook for at least six years after the latest year that relies on that base year.

Common Mistakes That Trigger CRA Mileage Audits

Motor vehicle expense claims are among the most frequently reviewed items on Canadian tax returns. Avoid these five audit triggers:

1. Claiming Commuting as Business Travel

Driving between your home and a regular, fixed workplace is personal travel in the eyes of the CRA — even if you carry tools or take client calls on the way. However, if your home is your principal place of business, or if you drive directly from home to a client location or temporary job site before visiting an office, those kilometres qualify as business mileage.

2. Round Numbers and Reconstructed Logs

A spreadsheet full of rounded distances (20 km, 50 km, 15 km) created the week before your tax filing deadline is an immediate red flag. Contemporaneous records — entries logged on the day of the trip — carry far greater credibility during a CRA audit.

3. Claiming 90%+ Business Use on a Single Family Vehicle

If you own only one vehicle and claim 90% to 100% business use, an auditor will ask how you handle groceries, errands, and personal travel. Always log personal vs. business kilometres honestly.

4. Missing Start and End Odometer Readings

Many taxpayers carefully log every client trip but forget to record their odometer at the start and end of the year. Without total annual kilometres, you cannot prove the denominator of your business-use percentage.

5. Losing Receipts for Actual Expenses

Unlike the US standard mileage deduction, claiming mileage on a T2125 or T777 in Canada requires both a mileage log book and receipts for fuel, insurance, repairs, and lease/loan statements. Credit card statements alone are often insufficient because they do not show itemized details or GST/HST breakdowns.

How to Manage and Export Your CRA Mileage Log with automileage.app

Paper glovebox logbooks get lost, coffee-stained, or abandoned by February. automileage.app was designed specifically to make maintaining a CRA mileage log book fast, accurate, and audit-ready:

• Log Trips in Seconds: Record the date, origin, destination, business purpose, and exact kilometres from your phone or browser.
• Automatic Business-Use Percentage: Log your business and personal trips and your business-use percentage updates as you go, with your fiscal-year start and end odometer readings recorded alongside.
• Receipt & Expense Tracking: Attach photos of fuel, maintenance, and insurance receipts directly alongside your vehicle log.
• One-Click Tax Filing Exports: Export your complete mileage and expense log as a formatted PDF or CSV report containing every data point required for Form T2125, Form T777, or a CRA audit inquiry.
• 10-Year Secure Retention: Your logs and receipt attachments are stored securely for 10 years — exceeding the CRA's six-year retention rule and covering base-year logbooks used under the simplified method.

Frequently Asked Questions

How do I claim mileage on my taxes in Canada?

In Canada, most self-employed taxpayers and qualifying employees do not multiply kilometres by a flat rate on their tax return. Instead, you keep a CRA mileage log book to calculate your business-use percentage (business km divided by total annual km) and apply that percentage to your actual vehicle expenses on Form T2125 (self-employed) or Form T777 with a signed T2200 (employees).

What does the CRA require in a mileage log book?

A compliant CRA mileage log book must record the date, destination, business purpose, and kilometres driven for every business trip. You must also record your vehicle odometer reading at the start and end of the year (your fiscal period if you're self-employed, usually January 1 and December 31) to establish your total annual kilometres.

Can I deduct my daily commute as a business expense?

No. The CRA considers travel between your home and your regular place of work to be personal driving. However, if you operate from a qualifying home office and drive to client sites or secondary work locations, those trips typically qualify as deductible business travel.

What is the CRA simplified logbook method?

After maintaining a full CRA mileage log for one complete 12-month base year, self-employed taxpayers can keep a three-month sample logbook in subsequent years. If your business-use percentage in the sample period is within 10 percentage points of the same three-month period in your base year, and the resulting annual figure is within 10 points of your base-year annual percentage, you can use the extrapolated percentage for the entire year.

What vehicle expenses can I deduct on my Canadian tax return?

You can deduct the business-use portion of fuel, electricity for EVs, insurance, licence and registration fees, maintenance and repairs, loan interest (up to CA$350/month), lease payments (up to CA$1,100/month before tax), capital cost allowance, and business-related parking fees.

How do I calculate my CRA business-use mileage percentage?

Divide your total business kilometres by your total kilometres driven during the tax year, then multiply by 100. For example, 15,000 business km out of 25,000 total km equals a 60% business-use percentage.

How long do I need to keep my CRA mileage log if I get audited?

The CRA requires you to keep your mileage log book and supporting vehicle expense receipts for at least six years from the end of the last tax year to which they relate.

Start Your CRA Mileage Log Book Today

The best time to start your mileage log book was January 1. The second best time is today. Every business trip you log from this point forward strengthens your tax position and protects your deductions in the event of a CRA review.

Get started risk-free and take the stress out of CRA mileage tracking.