The CRA mileage rate sets the official per-kilometre allowance for using a personal vehicle for business purposes in Canada. These rates are reviewed annually by the Canada Revenue Agency (CRA) and are based on the average cost of fuel, maintenance, insurance, depreciation, and other vehicle operating expenses.
This guide explains:
- The latest official CRA mileage rates (2025)
- The expected 2026 mileage rates (planning estimates only)
- How employees and self-employed Canadians use the km rate
- How to calculate reimbursements and deductions
- Logbook requirements and practical tips
CRA Mileage Rate 2026 (Estimated)
Status (as of January 2026):
The CRA has not yet released the official 2026 prescribed automobile allowance.
Based on recent trends, the expected planning estimates are:
| Category | Estimated 2026 Rate |
|---|---|
| First 5,000 business km (provinces) | $0.74 per km |
| Additional km over 5,000 | $0.68 per km |
| Territories (YT, NWT, NU) | + $0.04 per km |
These are not official CRA rates and are provided for budgeting only. They will be updated once the CRA publishes the confirmed 2026 amounts.
Official CRA Mileage Rate for 2025 (Current Confirmed Rates)
Until the 2026 rates are released, the 2025 rates remain the official benchmark.
| Category | Rate |
|---|---|
| First 5,000 km | $0.72 per km |
| After 5,000 km | $0.66 per km |
| Territories | + $0.04 per km |
5-Year CRA Mileage Rate History
| Year | First 5,000 km | Additional km |
|---|---|---|
| 2025 | $0.72 | $0.66 |
| 2024 | $0.70 | $0.64 |
| 2023 | $0.68 | $0.62 |
| 2022 | $0.61 | $0.55 |
| 2021 | $0.59 | $0.53 |
Territories typically receive an additional $0.04 per km.
How the CRA Sets the KM Rate
The CRA reviews:
- National fuel prices
- Maintenance and repair costs
- Insurance premiums
- Registration fees
- Inflation and depreciation
The goal is to reflect the true average cost of owning and operating a vehicle.
How to Calculate Using the 2026 Estimated Rate
Example — Consultant in Ontario driving 12,000 business km:
- First 5,000 km × $0.74 = $3,700
- Remaining 7,000 km × $0.68 = $4,760
Estimated total: $8,460
This calculation is only valid if supported by a proper mileage log.
What Counts as Business Kilometres?
Business kilometres include:
- Travel to client sites or job locations
- Travel between multiple work locations
- Trips to suppliers, trade shows, or conferences
- Travel for networking or business development
Commuting from home to a regular workplace is normally personal.
How Employees Use the CRA Mileage Rate
Employees may receive a per-kilometre allowance from their employer. If the rate is reasonable and the employee pays their own vehicle costs, the allowance may be non-taxable.
Employees should:
- Log each business trip (date, purpose, km)
- Submit records regularly
- Separate business and personal driving
How Self-Employed Canadians Use the CRA Rate
Self-employed individuals can:
- Deduct actual vehicle expenses using a business-use percentage, or
- Use the per-km allowance as a simplified method or reasonableness benchmark
In both cases, a detailed mileage log is required.
CRA Mileage Log Requirements
A compliant log should include:
- Date of trip
- Starting point and destination
- Business purpose
- Odometer start and end readings
- Total kilometres driven
Practical Tips for 2026
- Record odometer reading on January 1
- Log trips immediately after they occur
- Write short business purpose notes
- Keep digital backups of records
- Update your systems once CRA releases official 2026 rates
FAQ: CRA Mileage Rate 2026
Has the CRA released the 2026 rate?
No. As of January 2026, it has not yet been published.
What is the predicted 2026 rate?
$0.74/km for the first 5,000 km and $0.68/km after — planning estimate only.
Do I have to use the CRA rate?
No. You can claim actual expenses instead.
Is a logbook required?
Yes. All claims must be supported by a mileage log.
