# CRA mileage rate 2026: 73 cents, and who it is for > For 2026 the CRA rate is 73 cents per km for the first 5,000 km and 67 cents after that, in every province. In Yukon, the Northwest Territories and Nunavut it is 77 and 71 cents. It is the limit for tax-free allowances an employer pays. Self-employed people deduct the business share of actual vehicle costs instead. Canonical: https://blueanchor.app/guides/cra-mileage-rate-2026 Updated 30 September 2026. Sources are listed at the end. ## The 2026 numbers Finance Canada announced these on 14 January 2026, effective 1 January 2026 ([Finance Canada news release](https://www.canada.ca/en/department-finance/news/2026/01/government-announces-the-2026-automobile-deduction-limits-and-expense-benefit-rates-for-businesses.html)). The per-kilometre rates match the CRA's table ([CRA, allowances for an employee's own vehicle](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/benefits-allowances/automobile/automobile-motor-vehicle-allowances.html)). | 2026 limit or rate | Amount | What it is for | |---|---|---| | Allowance, provinces, first 5,000 km | 73 cents/km | Employer deduction limit for tax-exempt allowances | | Allowance, provinces, each km after 5,000 | 67 cents/km | Same | | Allowance, territories, first 5,000 km | 77 cents/km | Same, for driving in Yukon, NWT, Nunavut | | Allowance, territories, each km after 5,000 | 71 cents/km | Same | | CCA ceiling, Class 10.1 passenger vehicles | $39,000 | Before tax, vehicles acquired on or after 1 Jan 2026 (was $38,000) | | CCA ceiling, Class 54 zero-emission passenger vehicles | $61,000 | Before tax, unchanged | | Deductible leasing costs | $1,100/month | Before tax, new leases from 1 Jan 2026 | | Interest on a car loan | $350/month | New loans from 1 Jan 2026 | | Operating cost benefit, general | 34 cents/km | Taxable benefit for personal driving when the employer pays operating costs | | Operating cost benefit, car sales or leasing employees | 31 cents/km | Same, for people employed mainly selling or leasing cars | ## By province: one rate for all ten People search for the rate in Nova Scotia, Ontario, Alberta or British Columbia. There is no provincial version. Nova Scotia, Ontario, Alberta, BC and every other province use the same 73 cents for the first 5,000 km and 67 cents after. The higher rate is for kilometres driven in Yukon, the Northwest Territories or Nunavut: [Income Tax Regulation 7306](https://laws-lois.justice.gc.ca/eng/regulations/C.R.C.,_c._945/section-7306.html) adds an amount for "kilometres driven in the Yukon Territory, the Northwest Territories or Nunavut". ## Who the 73 cents is for Finance Canada describes it as "the limit on the deduction of tax-exempt allowances paid by employers to employees who use their personal vehicle for business purposes." Two things follow: - An employee who gets a per-km allowance at or under these rates, for business kilometres only, generally does not pay tax on it. - The employer can deduct allowances up to these rates. The CRA says an allowance is not taxable when all of these apply: it is based only on business kilometres, the per-km rate is reasonable, and you did not also reimburse the employee for the same use of the vehicle (reimbursing supplementary business insurance, tolls or ferry charges is allowed if they were left out of the allowance). The CRA "generally" considers an allowance at the prescribed rates to be reasonable. The employee should keep a log of each work trip (date, destination, purpose), and the employer must get those records. With no record, the allowance is generally taxable. If you own a corporation and it pays you, as its employee, a per-km allowance for driving your own car on its business, these are the limits that apply to that allowance. Worked example: 8,000 business km in the provinces is 5,000 km at 73 cents ($3,650) plus 3,000 km at 67 cents ($2,010), a total of $5,660. ## If you are self-employed: actual costs, not a rate A sole proprietor reports vehicle costs in Chart A of Form T2125. The CRA's rule: "If you use a motor vehicle or a passenger vehicle for both business and personal use, you can deduct only the portion of the expenses that relates to earning business income" ([CRA, motor vehicle expenses](https://www.canada.ca/en/revenue-agency/services/tax/businesses/small-businesses-self-employed-income/business-income-tax-reporting/business-expenses/motor-vehicle-expenses.html)). The share is business kilometres divided by total kilometres. Costs that go into the calculation, per the CRA: licence and registration fees, fuel and oil, electricity for zero-emission vehicles, insurance, interest on money borrowed to buy the vehicle, maintenance and repairs, and leasing costs. The result goes on line 9281. Capital cost allowance is claimed separately on line 9936. The CRA says parking fees for business and supplementary business insurance are deductible in full, not prorated. For passenger vehicles and zero-emission passenger vehicles, the CRA says CCA, interest and leasing costs are capped. The 2026 caps are in the table above. ### Worked example You drove 30,000 km in 2026, 12,000 of them for business. Fuel, insurance, repairs, licence and interest came to $9,000. Business use is 12,000 / 30,000 = 40%. Deductible: 40% of $9,000 = $3,600, on line 9281. CCA is worked out separately. If you had used 73 cents a kilometre instead, you would have written down $8,340 (5,000 km at 73 cents plus 7,000 km at 67 cents), which is not how a T2125 works. The web page has a calculator for the employer allowance, the self-employed business share, and the US standard mileage deduction. ## What a CRA mileage log needs The CRA calls a full-year logbook "the best evidence to support the use of a vehicle" ([CRA, motor vehicle records](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/business-expenses/motor-vehicle-expenses/motor-vehicle-records.html)). For each business trip, record: - date - destination - purpose - number of kilometres driven Also record the odometer reading at the start and end of the fiscal period, and, if you change vehicles, the dates and odometer readings when you buy, sell or trade. With more than one vehicle, keep a separate record for each. ### The simplified logbook Keep a full logbook for one complete year to set a base year. In later years you can keep a logbook for a three-month sample period and scale it: **(sample period % ÷ same period in base year %) × base year annual % = business use for the year** The CRA's example: the base year showed 49% business use for the year and 46% for April to June. A later year's April to June sample showed 51%. So (51 ÷ 46) × 49 = 54%. The CRA accepts that because it is within 10 points of the base year (between 39% and 59%). If the result falls outside that range, the sample only covers its own three months, and the CRA suggests starting a new base year. Keep the base-year logbook for six years from the end of the last tax year you use it for. More on retention in [how long to keep receipts](https://blueanchor.app/guides/how-long-to-keep-receipts), and on the fuel and repair receipts themselves in [CRA receipt requirements](https://blueanchor.app/guides/cra-receipt-requirements). ## US: the IRS standard mileage rate for 2026 The IRS rate for business driving is 72.5 cents per mile from 1 January to 30 June 2026 ([IR-2025-128](https://www.irs.gov/newsroom/irs-sets-2026-business-standard-mileage-rate-at-725-cents-per-mile-up-25-cents)) and 76 cents per mile from 1 July 2026. The IRS raised it mid-year "from recent increases in the price of fuel" ([Announcement 2026-11, IRB 2026-29](https://www.irs.gov/irb/2026-29_irb)). The earlier rate still applies to driving before 1 July ([IRS, standard mileage rates](https://www.irs.gov/tax-professionals/standard-mileage-rates)). Unlike Canada, the US rate is available to the self-employed. It is optional: you can deduct actual costs instead. If you want the standard rate for a car you own, the IRS says you must choose it in the first year the car is available for business use; in later years you can pick either method. Worked example: 4,000 business miles from January to June at 72.5 cents ($2,900) plus 5,000 miles from July to December at 76 cents ($3,800) is US$6,700. ## About BlueAnchor BlueAnchor records drives on your iPhone, lets you mark the business ones, and prices them at the 2026 CRA allowance rates or the IRS rate, with each business kept in its own books. It is not yet released. Pricing: https://blueanchor.app/pricing. See also [using one card for two businesses](https://blueanchor.app/guides/one-card-two-businesses). Waitlist: https://blueanchor.app/#join ## Questions ### What is the CRA mileage rate for 2026? 73 cents per kilometre for the first 5,000 km driven in 2026 and 67 cents for each kilometre after that, in the provinces. In Yukon, the Northwest Territories and Nunavut it is 77 cents and 71 cents. These are the limits on tax-exempt allowances an employer can deduct. ### Is the 2026 mileage rate different in Nova Scotia, Ontario, Alberta or BC? No. There is one rate for all ten provinces: 73 cents for the first 5,000 km and 67 cents after. Only the three territories have a higher rate, 77 cents and 71 cents. ### Can I use 73 cents a km if I am self-employed? Not to work out your own deduction. On Form T2125 you deduct the business share of what the vehicle actually cost you (fuel, insurance, repairs, licence, interest or leasing, and capital cost allowance), based on business kilometres over total kilometres from a logbook. ### What does a CRA mileage log need? For each business trip: the date, destination, purpose and kilometres driven, plus the odometer reading at the start and end of the fiscal period. After one full year of logging, the CRA accepts a three-month sample logbook in later years if business use stays within 10 percentage points of the base year. ### What is the IRS mileage rate for 2026? 72.5 cents per mile for business driving from 1 January to 30 June 2026, and 76 cents per mile from 1 July 2026, after the IRS raised the rate mid-year because of fuel prices. ## Sources 1. [Finance Canada, Government Announces the 2026 Automobile Deduction Limits and Expense Benefit Rates for Businesses](https://www.canada.ca/en/department-finance/news/2026/01/government-announces-the-2026-automobile-deduction-limits-and-expense-benefit-rates-for-businesses.html), 14 January 2026, date modified 2026-01-14 2. [CRA, Allowances or reimbursements provided to an employee for the use of their own vehicle](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/benefits-allowances/automobile/automobile-motor-vehicle-allowances.html), date modified 2026-03-06 3. [Income Tax Regulations, section 7306](https://laws-lois.justice.gc.ca/eng/regulations/C.R.C.,_c._945/section-7306.html), consolidation current to 2026-09-21 4. [CRA, Motor vehicle expenses](https://www.canada.ca/en/revenue-agency/services/tax/businesses/small-businesses-self-employed-income/business-income-tax-reporting/business-expenses/motor-vehicle-expenses.html), date modified 2026-08-17 5. [CRA, Motor vehicle records](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/business-expenses/motor-vehicle-expenses/motor-vehicle-records.html), date modified 2026-08-31 6. [IRS, IR-2025-128, IRS sets 2026 business standard mileage rate at 72.5 cents per mile](https://www.irs.gov/newsroom/irs-sets-2026-business-standard-mileage-rate-at-725-cents-per-mile-up-25-cents), 29 December 2025 7. [IRS, Internal Revenue Bulletin 2026-29, Announcement 2026-11](https://www.irs.gov/irb/2026-29_irb), last reviewed or updated 10 July 2026 8. [IRS, Standard mileage rates](https://www.irs.gov/tax-professionals/standard-mileage-rates), last reviewed or updated 28 July 2026 General information, not tax advice. BlueAnchor does not file taxes. Check your own situation with the CRA or IRS, or a qualified professional.