This guide reflects the rules for the tax year ending December 31, 2025.
It applies to individuals filing their 2025 tax return in 2026.
If you use your vehicle for business, CRA requires you to keep a mileage log to support your vehicle expense claims. This guide explains how to track mileage properly, what CRA requires, and includes ready-to-use templates and examples.
🧭 1. Why Mileage Tracking Matters #
Mileage tracking determines your business-use percentage, which is used to calculate your deductible vehicle expenses.
\[ \text{Business km} \div \text{Total km} = \text{Business-use percentage} \]Without a mileage log, CRA can:
- Deny your vehicle expenses
- Reassess previous years
- Charge interest and penalties
A proper logbook protects you during an audit.
📘 2. CRA Mileage Log Requirements #
CRA requires:
✔ A full logbook for the first year #
Record every business trip, including:
- Date
- Destination
- Purpose
- Starting odometer
- Ending odometer
- Total km
✔ A simplified logbook for future years #
If your usage is consistent:
- Track business km for 3 months
- CRA extrapolates for the year
✔ Annual odometer readings #
Required every year:
- January 1
- December 31
🧾 3. What Counts as Business Mileage? #
✔ Eligible business trips #
- Client meetings
- Deliveries
- Job sites
- Picking up supplies
- Banking for business
- Travel between temporary work locations
❌ Not eligible #
- Commuting from home to a regular workplace
- Personal errands
- Driving family members
- Vacations
📋 4. Mileage Log Template (Copy & Use) #
Daily Log Template #
| Date | Start Odometer | End Odometer | Total KM | Destination | Purpose |
|---|---|---|---|---|---|
| 2025-03-12 | 45,200 | 45,260 | 60 | Downtown Office | Client meeting |
Annual Summary Template #
| Description | KM |
|---|---|
| Total KM Driven | 20,000 |
| Business KM | 8,000 |
| Personal KM | 12,000 |
| Business-Use % | 40% |
🧮 5. Full Example: Mileage Calculation #
Your annual odometer readings:
- January 1: 40,000 km
- December 31: 60,000 km
Total km:
\[ 60,000 - 40,000 = 20,000 \]Your business trips total: 7,500 km
Business-use percentage:
\[ 7,500 \div 20,000 = 37.5\% \]You can deduct 37.5% of eligible vehicle expenses.
📱 6. Best Mileage Tracking Apps (CRA-Friendly) #
You can track mileage manually or with apps.
✔ Recommended apps #
- MileIQ
- Everlance
- QuickBooks Self-Employed
- Driversnote
These apps automatically:
- Track trips
- Classify business vs. personal
- Export CRA-compliant reports
🧮 7. Example: Using the Simplified Logbook #
If your usage is consistent year-to-year:
- Track business mileage for 3 months
- Calculate business-use percentage
- Apply it to the full year
Example:
- Q1 business km: 2,000
- Q1 total km: 5,000
If your annual total km is 22,000:
\[ 22,000 \times 0.40 = 8,800 \]Business km for the year: 8,800
🧾 8. Common CRA Audit Issues #
CRA often denies claims when:
- No mileage log exists
- Logbook is incomplete
- Business purpose is unclear
- Odometer readings are missing
- Business-use percentage is unrealistic
A clean logbook avoids these issues.
🧹 9. Best Practices for Mileage Tracking #
- Record trips daily
- Use an app if possible
- Keep odometer photos
- Save receipts for fuel and repairs
- Keep a backup of your logbook
- Use consistent descriptions (e.g., “Client meeting – ABC Corp”)
❓ 10. Frequently Asked Questions #
Can I estimate my mileage? #
No — CRA requires actual logs.
Can I claim mileage instead of expenses? #
No — Canada does not use a per‑km rate for self-employed individuals.
Do I need a logbook if I use an app? #
Apps generate CRA-compliant logs.
Can I claim 100% business use? #
Only if the vehicle is used exclusively for business (rare).
🔗 11. Related Guides #
- Business Use of Vehicle (Deep Dive)
- Self-Employment Expenses
- CCA for Self-Employed Canadians
- T2125 Step-by-Step Guide
