Self-employed Canadians can deduct vehicle expenses using either the actual expense method (tracking fuel, insurance, repairs, and depreciation) or the simplified mileage method where permitted. Under the mileage approach, you claim a fixed amount per kilometer for business driving, then multiply by your total business kilometers driven in the tax year. The CRA does not publish an official "mileage rate" for self-employed workers, so you must use the actual expense method or calculate a reasonable per-kilometer cost based on your documented total vehicle expenses divided by business kilometers. Record keeping is essential: maintain a mileage log showing dates, destinations, business purpose, and kilometers for each trip. The CRA recognizes two main approaches for self-employed vehicle expense deductions: Actual Expense Method - Track all vehicle-related costs: fuel, insurance, maintenance, repairs, registration, and capital depreciation - Claim only the percentage of total expenses that relate to business use - Requires detailed receipts and documentation for each expense - More accurate if your vehicle costs are higher than average Mileage (Per-Kilometer) Method - Calculate your total annual vehicle expenses - Divide total expenses by total kilometers driven (business plus personal) - Multiply the result by business kilometers only - Simpler record-keeping if you
The CRA expects contemporaneous (written at the time) records of business trips. You do not need to log personal errands in detail, but you should record business trips as they happen with dates, destinations, and kilometers. A sample week of detailed logs can help support your overall business-use percentage if questioned.
No, commuting from home to a regular workplace is considered personal travel and is not deductible. However, trips from your home office to client meetings, site visits, or supply pickups are deductible business driving.
If you own the company vehicle, you can still claim vehicle expenses using the mileage or actual expense method. If your employer provides the vehicle and you also use it personally, you may receive a taxable benefit instead of claiming deductions.
Keep your mileage log, fuel receipts, insurance statements, and repair invoices together. Odometer readings at year-start and year-end help confirm total kilometers. If you don't have a complete log, the CRA may estimate based on your typical business driving patterns and documentation.
No. The CRA does not endorse fixed per-kilometer rates; you must calculate your own rate based on actual expenses divided by total kilometers. Some provinces publish advisory rates, but the CRA requires documentation of your real costs.