How to Track Mileage for CRA Tax Deductions in 2026

If you use your personal vehicle for business purposes in Canada, you could be leaving thousands of dollars on the table every tax season. The Canada Revenue Agency (CRA) allows self-employed individuals, sole proprietors, and commission-based employees to deduct a portion of their vehicle expenses — but only if you can back it up with a proper mileage logbook.

Without accurate records, the CRA can deny your deduction entirely, and in the worst case, trigger a reassessment that leads to penalties and interest. The good news? Maintaining a compliant logbook is straightforward once you understand the rules.

Who Qualifies for Vehicle Expense Deductions?

Not everyone can claim vehicle expenses on their tax return. The CRA permits deductions for the following groups:

Self-employed individuals and sole proprietors who drive for client visits, deliveries, or other business activities
Employees earning commission income who are required to pay their own vehicle expenses (with a signed T2200 from their employer)
Partners in a partnership who use a personal vehicle for partnership business
Salaried employees with a signed T2200 Declaration of Conditions of Employment, where the employer certifies the employee is required to use a personal vehicle for work

If you fall into one of these categories and you use your vehicle for both personal and business purposes, you can claim the business-use portion of your total vehicle expenses.

What the CRA Requires in Your Mileage Log

The CRA does not accept rough estimates or end-of-year guesses. To support your vehicle expense deduction, you need to maintain a logbook that records the following for every business trip:

Date of each trip
Destination — the name of the client, job site, or business location you drove to
Purpose of the trip — a brief description such as "client meeting," "supply pickup," or "site inspection"
Kilometres driven for that specific business trip
Odometer reading at the start and end of each trip (recommended but not strictly mandatory for every entry)

In addition to individual trip records, you also need to track:

Total kilometres driven during the tax year (business and personal combined)
Total business kilometres driven during the tax year
Odometer reading at the start of the year (January 1) and end of the year (December 31)

The CRA uses these totals to calculate your business-use percentage — the share of your total driving that was for business. This percentage determines how much of your vehicle expenses you can deduct.

The Business-Use Percentage Formula

The calculation is simple:

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

For example, if you drove 25,000 km in a year and 15,000 km were for business, your business-use percentage is 60%. You would then deduct 60% of your eligible vehicle expenses.

What Vehicle Expenses Can You Deduct?

Once you have your business-use percentage, you can apply it to a wide range of vehicle-related costs:

Fuel and oil
Insurance premiums
Licence and registration fees
Maintenance and repairs (tires, oil changes, brake service, etc.)
Loan interest on a vehicle purchased for business use (limited to CA$350 per month for passenger vehicles in 2026)
Lease payments (limited to CA$1,100 per month for passenger vehicles before tax in 2026)
Capital cost allowance (CCA) — a depreciation claim on the vehicle's purchase price (limited to CA$39,000 before tax for Class 10.1 passenger vehicles in 2026)
Parking fees related to business activities (but not home parking)
Supplementary business insurance riders

Keep all receipts and invoices for these expenses. The CRA can request supporting documentation at any time, even years after you file.

Common Mistakes That Trigger CRA Audits

Vehicle expense deductions are among the most scrutinized claims on Canadian tax returns. Avoid these common pitfalls:

1. Claiming Commuting as Business Travel

Your daily drive from home to your regular place of work is personal, not business. The CRA is clear on this: travel between your home and a fixed workplace does not qualify. However, if you work from a home office and drive to client sites or secondary locations, those trips typically qualify.

2. Inflating Your Business-Use Percentage

A business-use percentage above 75% is likely to draw attention unless you can demonstrate that your vehicle is used almost exclusively for work. Be honest and accurate — an inflated percentage without supporting logs is a red flag.

3. Reconstructing Logs After the Fact

Building a logbook from memory at tax time is risky. The CRA has stated that contemporaneous records — logs made at or near the time of each trip — carry significantly more weight than reconstructed ones. If your records appear fabricated, the entire deduction may be denied.

4. Failing to Separate Mixed-Use Trips

If you combine a personal errand with a business trip, only the business portion of the kilometres qualifies. Log these trips carefully and note the split.

5. Not Recording Odometer Readings

Without start-of-year and end-of-year odometer readings, you cannot accurately calculate your total kilometres driven, which makes your business-use percentage unverifiable.

The CRA's Simplified Logbook Method

The CRA offers a simplified logbook option for taxpayers who have maintained a full logbook for at least one complete 12-month base year. After establishing your base year, you can use a three-month sample period in subsequent years to confirm that your driving pattern has not changed significantly.

To qualify for the simplified method:

Keep a full logbook for one complete year (your base year)
In the following year, keep a logbook for a three-month sample period
If your business-use percentage in the sample period is within 10% of your base year, you can use your base-year percentage for the entire year

This is a legitimate time-saver, but you must still track your total annual kilometres and keep the sample-period log on file. If the CRA asks, you will need to produce both your base-year log and your sample-period records.

How automileage.ca Makes CRA Compliance Effortless

Manually maintaining a paper logbook is tedious and error-prone. Forgetting to log a trip, losing a receipt, or making a calculation mistake can cost you money — either through a missed deduction or a CRA reassessment.

automileage.ca was built specifically for Canadian business owners and self-employed professionals who need CRA-compliant mileage tracking without the hassle.

Log Trips in Seconds

Record each trip with a few taps — enter the date, destination, purpose, and distance. No paper forms, no spreadsheets, no guesswork.

Automatic Business-Use Calculation

The app calculates your business-use percentage in real time as you log trips throughout the year. You always know exactly where you stand.

CRA-Ready Reports

At tax time, generate a clean, formatted CSV or PDF report that contains every data point the CRA requires. Hand it directly to your accountant or attach it to your return.

Expense Tracking Built In

Track fuel, insurance, maintenance, and other vehicle expenses alongside your mileage. See your total deductible amount at a glance — no separate spreadsheets needed.

Secure and Private

Your data is encrypted and stored securely on Canadian infrastructure. Only you have access to your records.

Year-End Checklist for Vehicle Tax Deductions

As the tax year wraps up, make sure you have everything in order:

Record your December 31 odometer reading — this is essential for calculating your total annual kilometres
Review your logbook for completeness — fill in any gaps while the details are still fresh
Gather all vehicle expense receipts — fuel, insurance, repairs, lease or loan statements
Calculate your business-use percentage — total business km ÷ total km driven
Apply your percentage to each eligible expense category — this gives you your total deduction
File with confidence — with a complete logbook and organized receipts, you are fully prepared for any CRA inquiry

Frequently Asked Questions

What does the CRA require in a mileage logbook?

The CRA requires you to record the date, destination, purpose, and kilometres driven for every business trip. You must also track your total annual kilometres (business and personal combined) and record odometer readings at the start and end of each tax year.

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 home office and drive to client sites or secondary work locations, those trips typically qualify as business travel.

What is the CRA simplified logbook method?

After maintaining a full logbook for one complete base year, you can keep a three-month sample logbook in subsequent years. If your business-use percentage in the sample period is within 10% of your base year, you can use your base-year 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, 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 business-use 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.

Do I need to keep my mileage logbook if I get audited?

Yes. The CRA can request your logbook and supporting receipts at any time, even years after you file. You should retain all vehicle expense records for at least six years from the end of the tax year they relate to.

Start Tracking Today

The best time to start a mileage logbook 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 an audit.

Start your free trial and take the stress out of CRA mileage tracking.