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CRA Mileage Log Rules for Self-Employed Contractors

If you're self-employed, your truck is probably one of your biggest expenses. The good news: you can deduct the business part of it. The catch: CRA wants a logbook to show how much of your driving was business, and gas receipts alone don't show that.

This is general information, not tax advice. Your accountant should confirm what applies to you.

The most common mistake: using the per-kilometre rate

You've probably seen CRA's cents-per-kilometre rates. Those are the reasonable allowance rates an employer can pay an employee tax-free for using their own vehicle. If you're a sole proprietor, that rate is not how you calculate your deduction.

Instead, you claim your actual vehicle costs, multiplied by the share of your driving that was for business.

How the deduction actually works

1. Add up the year's vehicle costs: fuel, repairs and maintenance, insurance, licence and registration, and (with limits) loan interest or lease payments. Depreciation is claimed separately as capital cost allowance.
2. Work out your business-use percentage from your logbook: business kilometres ÷ total kilometres driven that year.
3. Multiply: total vehicle costs × business-use %. That's the business portion you can claim.

Example: you drove 40,000 km in the year and your log shows 30,000 km were for business. That's 75% business use. If the truck cost $14,000 to run (fuel, repairs, insurance, registration), the business portion is $10,500. Your accountant handles depreciation and any limits on top of that.

That's why the log matters: without it, there's no solid number for that percentage.

What the logbook needs

For each business trip:

• the date
• where you went (the job site, supplier or customer)
• why (the job or purpose)
• the kilometres driven

Also write down your odometer reading at the start and end of the year, so total kilometres can be worked out.

CRA also describes a simplified option: after you keep a full logbook for one year, you may be able to use a shorter sample period in later years, as long as your driving pattern stays similar. Ask your accountant whether it fits your situation.

What usually doesn't count as business driving

• Driving from home to a regular place of work is generally treated as personal. If your home is your main place of business, the rules can be different, so check with your accountant.
• Personal errands, even in the work truck.

Trips between job sites, supplier runs, and driving to a customer to quote or fix something are typical business kilometres.

Keep the receipts too

The log proves the percentage. The receipts prove the costs. You need both: fuel, repairs, tires, insurance and registration, and the loan or lease papers.

The easy way to keep a log from the truck

• Write the odometer reading on January 1 and December 31. Take a photo of the dash.
• Log trips as they happen: a quick note or a mileage app. "Mar 3: Kerr St job to Home Depot Kanata to Kerr St, 38 km, Kerr St reno."
• Once a week, make sure every job day has its trips written down.
• Keep every vehicle receipt in one place, and match fuel receipts to the week's trips.

The bottom line

Your deduction is your real vehicle costs × your business-use %, and the logbook is what backs up that percentage. Keep the log and the receipts, and let your accountant do the final math.