CRA Kilometre Rates 2026: 73¢ for the First 5,000 km, Then 67¢

For 2026 the CRA’s reasonable per-kilometre allowance is 73¢ for the first 5,000 km and 67¢ for each kilometre after, or 77¢ and 71¢ in the Northwest Territories, Yukon and Nunavut. Before you use those figures, know what they are: the rate an employer can pay you tax-free. They are not a deduction a self-employed Canadian can claim.

CRA automobile allowance rates

Year	First 5,000 km	Each km after	Territories (first / after)
2026	73¢	67¢	77¢ / 71¢
2025	72¢	66¢	76¢ / 70¢

Source: Department of Finance Canada, 2026 automobile deduction limits and expense benefit rates (14 January 2026). Checked 22 September 2026. The calendar year is the tax year, so the 5,000 km resets on 1 January.

Employee or self-employed: two different claims

Employees paid a per-kilometre allowance

An allowance based only on business kilometres, at a reasonable rate, is generally not taxable to you. The CRA figures above are also the most an employer can deduct for tax-exempt allowances it pays. If your employer reimburses at or below them, you need the kilometre log to show the allowance matched real business driving.

Self-employed and sole proprietors

There is no flat per-kilometre deduction. You claim your actual vehicle costs — fuel, insurance, licence and registration, maintenance, interest, leasing and capital cost allowance — multiplied by your business-use percentage, on Chart A of Form T2125. That percentage is business kilometres divided by total kilometres for the year, which is why the CRA says the best support is a logbook of every business trip: date, destination, purpose and distance. After one full year’s log as a base year, a three-month sample log can support later years if the results stay within 10% of the base year (CRA: motor vehicle records).

So for a self-employed driver, the number that matters is the business-use percentage, not 73¢. A courier with 18,000 business km out of 24,000 total is at 75%: three-quarters of the year’s eligible car costs are deductible.

A worked example for an allowance

An employee drives 8,000 business km in 2026 outside the territories. The CRA-rate value is 5,000 × $0.73 = $3,650, plus 3,000 × $0.67 = $2,010, so $5,660. Rated at 73¢ throughout it would be $5,840. In Yukon the same driving is $3,850 + $2,130 = $5,980.

How TaxMiles handles Canada

• Kilometres and Canadian dollars. A phone set to Canada uses the CRA scheme automatically; choose the territories version under Settings > Tax Region if you live in the Northwest Territories, Yukon or Nunavut.
• The 5,000 km band is walked trip by trip in date order and resets on 1 January. 2025 trips use the 2025 rates.
• The dollar figure is the CRA-rate value of your business kilometres — what an employer could reimburse tax-free. If you are self-employed, use the app for what the CRA actually asks of you: dated business trips with purpose, and odometer readings for the year’s total, which give you the business-use percentage for T2125.
• No medical or charity rate is shown, because the CRA publishes none for this purpose.
• Tax estimate uses a combined federal-plus-provincial rate you choose, and CPP contributions for the self-employed. An estimate, not a return.

Want a quick number first? The mileage calculator has a tab for this scheme.

For how Canada compares with the UK and Australia, see mileage deductions outside the US. The base-year and three-month sample rules are set out alongside the ATO logbook in keeping a logbook that holds up.

General information about CRA vehicle rules, not tax advice. Check CRA guidance or ask an accountant about your circumstances before you file.

Frequently asked questions

What is the CRA mileage rate for 2026?

73 cents per km for the first 5,000 km and 67 cents per km after that. In the Northwest Territories, Yukon and Nunavut it is 77 and 71 cents. For 2025 it was 72 and 66 cents.

Can self-employed Canadians deduct 73 cents per km?

No. The CRA rate is a reasonable-allowance limit for employer-paid allowances. Self-employed people deduct actual vehicle costs multiplied by their business-use percentage on Form T2125.

What log does the CRA expect?

A logbook of each business trip with date, destination, purpose and distance, plus total kilometres for the year. After a full base year, a three-month sample log can support later years if use stays within 10%.