CRA Mileage Rate 2026 and How to Claim Vehicle Expenses

The 2026 rate

For 2026, CRA's reference rate is $0.73 per kilometre for the first 5,000 business kilometres driven in a year, and $0.67 per kilometre for every kilometre after that. If your business is based in Yukon, the Northwest Territories, or Nunavut, add $0.04 per kilometre on top of both tiers.

Who this rate is actually for

This tiered rate is CRA's reasonable per-kilometre allowance — the rate an employer can pay an employee, tax-free, to reimburse them for using their own vehicle for work. It was never designed as a self-employed deduction formula.

Why self-employed sole proprietors can't just use it directly

If you're a sole proprietor, CRA doesn't let you multiply your business kilometres by this rate and call that your vehicle expense deduction on Form T2125. The only method available to an unincorporated business is the actual-expense method: add up your real vehicle costs for the year (fuel, insurance, maintenance, depreciation, and so on), then multiply by your business-use percentage — business kilometres divided by total kilometres driven, personal and business combined.

The published rate is still useful, though — as a quick benchmark to sanity-check whether your actual-expense calculation is in a reasonable range, and as the number CRA itself uses when someone is reimbursing you per kilometre rather than paying your actual costs.

Our mileage log tool uses this published rate to give you a fast estimate as you log trips throughout the year — treat the number it shows as a reference point, not your final tax deduction, and confirm your actual claim with your vehicle expense records or a professional.