Calculate an estimated mileage allowance using the 2026 CRA prescribed automobile rates. Learn how employee mileage allowances, self-employed vehicle expenses, business kilometres and CRA mileage records work in Canada.
Canadian mileage rules depend on whether you are an employee, self-employed, or using a company-provided vehicle. The correct treatment also depends on how your kilometres are documented.
Enter your business kilometres to estimate the amount produced by the 2026 CRA prescribed employee automobile allowance rates.
The prescribed rates are grouped into provinces and territories. They are commonly used when determining whether an employee automobile allowance is reasonable for tax purposes.
| Location | First 5,000 km | Additional km |
|---|---|---|
| All Canadian provinces | $0.73/km | $0.67/km |
| Northwest Territories | $0.77/km | $0.71/km |
| Nunavut | $0.77/km | $0.71/km |
| Yukon | $0.77/km | $0.71/km |
An employer may pay an automobile allowance to an employee who uses their own vehicle for employment-related travel.
A mileage allowance should generally relate to kilometres driven for employment purposes rather than ordinary personal driving.
CRA prescribed rates can be used as a benchmark when determining whether an automobile allowance is reasonable. An allowance that does not meet the applicable conditions can have different tax treatment.
Employees should maintain records showing the kilometres driven for employment and enough trip information to substantiate the claim.
A mileage allowance paid by an employer and a motor vehicle expense deduction on a tax return are separate concepts.
Suppose an employee in an Ontario-based business drives 8,000 employment-related kilometres during the year.
5,000 × $0.73
$3,6503,000 × $0.67
$2,010Some employees may be able to deduct motor vehicle expenses when specific CRA requirements are satisfied.
Form T2200 is the Declaration of Conditions of Employment. It can be required when an employee claims certain employment expenses, including qualifying motor vehicle expenses.
Having kilometres recorded does not by itself make an employee eligible for a deduction. The employment conditions and CRA requirements must also be satisfied.
Self-employed individuals generally calculate the business portion of actual eligible motor vehicle expenses rather than simply applying the employee prescribed kilometre rate.
Eligible fuel, oil and certain electricity expenses may form part of vehicle costs, subject to the applicable rules.
Qualifying maintenance, repairs, insurance, licence and registration costs can form part of the calculation.
When a vehicle has both business and personal use, the business portion generally needs to be identified.
Imagine a self-employed person drives:
Business-use percentage:
18,000 ÷ 30,000 = 60%
Illustrative business portion:
$9,000 × 60% = $5,400
This is an educational example only. Actual deductibility depends on the expenses, vehicle, business circumstances and CRA rules.
One of the most important parts of Canadian vehicle recordkeeping is separating business driving from personal use.
CRA guidance emphasizes keeping records that support business or employment-related vehicle use.
Recording every trip manually can lead to forgotten journeys, missing distances and incomplete descriptions.
A GPS mileage tracker can automatically capture journeys and give you an organized history to review.
Try FirstMileageCRA allows certain taxpayers to use a simplified logbook approach when the required conditions are met. A detailed base-year log can establish a reasonable pattern of vehicle use, after which a shorter sample period may be used in qualifying circumstances.
Even when a simplified method may be available, keeping comprehensive records gives you stronger evidence of actual business travel.
For businesses with frequent driving, automatic GPS records can make this process much easier.
A company-provided automobile is treated differently from an employee using their own personal vehicle.
The employee uses their own automobile and may receive an employer-paid automobile allowance or reimbursement.
Different taxable benefit rules can apply when the employer provides the vehicle. Do not use the personal vehicle allowance calculator as a substitute for the company-car benefit calculation.
Electric vehicles still require accurate business-use kilometre records when the vehicle is used for work or business purposes.
Depending on the taxpayer and circumstances, eligible vehicle expenses can include electricity and other qualifying costs under the applicable CRA rules.
The key principle remains the same: accurately identify the kilometres related to earning business or employment income.
FirstMileage helps you keep an organized history of your actual journeys using GPS mileage tracking, so you can spend less time manually reconstructing where you drove.
Record your business journeys, review trip history and generate organized mileage reports for your records.
Capture the journeys you actually drive instead of relying entirely on memory at the end of the week.
Keep business trips organized so you can review mileage when preparing reports or records.
Turn recorded journeys into structured mileage reports instead of manually rebuilding every trip.
Always verify your tax situation against the latest Canada Revenue Agency guidance.
FirstMileage helps you track actual journeys with GPS, organize your business mileage and generate reports — so your mileage records are ready when you need them.
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