If you use your personal vehicle for business driving in Canada, staying up-to-date with the latest Canada Revenue Agency (CRA) mileage rate is essential for accurate reimbursements, tax deductions and compliant mileage reporting. For the 2026 tax year, the CRA has recently confirmed the official per-kilometre allowances that employers and self-employed individuals should use for reference.
In this post, you will find:
- The 2026 CRA mileage rates you need to know
- Differences compared with 2025 rates
- How the mileage rate applies to employees, business owners and self-employed Canadians
- Best practices for mileage tracking in Canada
- How MyCarTracks helps you capture and report business kilometres accurately
What Is the CRA Mileage Rate for 2026?
For travel starting January 1, 2026, the CRA has confirmed the official prescribed automobile allowance rates. These are the rates considered reasonable for reimbursing business use of a personal vehicle without creating a taxable benefit.
2026 CRA Mileage Rates (Canada)
- 73 cents per kilometre for the first 5,000 business kilometres driven
- 67 cents per kilometre for each additional kilometre
- In Yukon, Northwest Territories and Nunavut, the mileage rate is 4 cents higher for both tiers (77 cents and 71 cents per kilometre) due to higher travel and operating costs.
These rates reflect a small increase from 2025, keeping pace with rising fuel prices, insurance, maintenance and vehicle operating costs.
2026 vs. 2025 Mileage Rates
| Tax Year | First 5,000 km | After 5,000 km | Territories Additional |
|---|---|---|---|
| 2026 | 73¢ | 67¢ | +4¢ |
| 2025 | 72¢ | 66¢ | +4¢ |
Consistent annual adjustments like this ensure that mileage reimbursements better reflect real driving costs.
Download MyCarTracks and start tracking your mileage now
Who Uses the CRA Mileage Rate?
Employees
If you are reimbursed by an employer for business driving using your own vehicle, the mileage rate your employer uses matters. Reimbursements up to the CRA-prescribed rate are generally non-taxable to you, provided your employer pays only for business kilometres. If your employer pays above these amounts, the excess may be treated as a taxable benefit.
Employers are not required to use the CRA rate, but many choose to because it is a widely recognized benchmark for reasonable reimbursement of vehicle operating costs.
Self-Employed Individuals and Small Business Owners
The CRA mileage rate itself does not directly determine your tax deduction. Instead, you may either:
- Claim actual vehicle expenses based on documented costs (fuel, insurance, maintenance, depreciation), proportionate to business use; or
- Use the CRA’s per-kilometre rates as a benchmark when calculating a simplified deduction or when justifying the reasonableness of expenses.
In all cases, you must separate business and personal travel and maintain accurate evidence of business kilometres driven.
Employers
Employers setting a mileage reimbursement policy should consider CRA rate guidelines. Reimbursements at or below the CRA rate are generally deductible as business expenses and non-taxable to employees. Reimbursements above that rate may create taxable benefits and additional reporting requirements. Documenting business kilometres accurately is essential.
Why Accurate Mileage Tracking Matters
Driving a personal vehicle for business without a detailed travel record can lead to lost tax savings or reimbursement opportunities. Manual mileage logs, based on memory, paper notebooks, or simple spreadsheets, are often inaccurate and time-consuming.
Accurate trip logging is necessary for:
- CRA-compliant mileage reports when claiming deductions or allowances
- Avoiding audits or disputes over mileage claims
- Calculating reimbursement amounts correctly based on actual business use
Best Practices for Mileage Tracking in Canada
Here are key actions to improve mileage reporting:
Track trips in real time: Logging trips manually at the end of the week or month increases the risk of missing or inaccurate data.
Separate business and personal travel: Only business kilometres count toward CRA allowances and tax deductions.
Record date, start/end odometer or GPS distance, destination and purpose: These details support compliance and reporting accuracy.
Simplify Mileage Tracking With MyCarTracks
MyCarTracks provides an automated solution that makes capturing and reporting business kilometres easy, compliant and accurate. Key features include:
- Automatic trip detection and logging so you never miss business travel
- Business vs personal trip classification for precise mileage data
- CRA-ready reports for tax returns or employer reimbursement
- Mobile and web access so you can view and export mileage anytime
Whether you are a freelancer, self-employed professional or mobile employee, using MyCarTracks ensures your mileage data is reliable and ready for tax season.
