Rates and deadlines
CRA Mileage Rate for 2026
73¢per kilometre for the first 5,000 km driven for work in 2026, then 67¢. In the territories, 77¢ and 71¢.
Sources checked October 20263 min read
Key points
- 73¢ per km for the first 5,000 km and 67¢ after, in the provinces
- One cent higher than 2025 on both bands
- 34¢ per personal km when an employer pays the running costs of a car
- Class 10.1 ceiling of $39,000 for passenger vehicles bought in 2026
What the rate is for
The 2026 rate is the most an employer can deduct for a tax free allowance paid to an employee who drives their own vehicle for work. Pay up to 73¢ for each of the first 5,000 business kilometres in the year and 67¢ for every kilometre after that, and the allowance is generally not taxable to the employee, as long as it is worked out only from business kilometres and the employee is not also reimbursed for the same costs.
The territories have their own, higher rates. An employer with staff in Yukon, the Northwest Territories or Nunavut uses the territorial figures for kilometres driven there.
| Where the driving happens | 2026 | 2025 |
|---|---|---|
| Provinces, first 5,000 km | 73¢ | 72¢ |
| Provinces, each km after | 67¢ | 66¢ |
| Territories, first 5,000 km | 77¢ | 76¢ |
| Territories, each km after | 71¢ | 70¢ |
If you are self employed
A sole proprietor does not use the per kilometre rate at all. They claim the actual cost of running the vehicle, fuel, insurance, repairs, licence and capital cost allowance, in proportion to the business share of the kilometres driven, and the CRA expects a logbook to support that share.
An owner who works through a corporation is an employee of it, so the corporation can pay them a reasonable per kilometre allowance on the same terms as anyone else on the payroll, supported by the same kind of log.
When the car belongs to the business
The 34¢ rate runs the other way. It is the taxable benefit for each personal kilometre when an employer pays the running costs of a car the employee also drives privately, or 31¢ for employees whose main job is selling or leasing cars.
The limits on what a business can deduct for the car itself also changed for 2026: the Class 10.1 ceiling rose from $38,000 to $39,000 before tax, while the others stayed where they were.
| Limit | 2026 |
|---|---|
| Capital cost of a passenger vehicle, Class 10.1 | $39,000 |
| Capital cost of a zero emission passenger vehicle, Class 54 | $61,000 |
| Deductible leasing cost per month | $1,100 |
| Deductible interest on a car loan per month | $350 |
Quick answers
Is the CRA mileage rate the same in every province?
Yes, 73¢ and 67¢ apply in every province. The territories have their own higher rates of 77¢ and 71¢.
Can an employer pay more than the CRA rate?
It can, but an allowance the CRA does not consider reasonable can become taxable income for the employee, and the published rate is the limit on what the employer deducts.
Do I need a logbook?
Yes. An allowance has to be based on business kilometres, and a self employed person's vehicle claim has to be split between business and personal use. A log of dates, destinations, purposes and distances is what supports either.
Related pages
Official sources
Call or email and we will tell you which records we need and what the work costs, in writing, before anything starts.
Important. This article provides general educational information, not legal or tax advice for a specific business. Rules, administrative policies, rates and deadlines can change. Confirm your facts and current obligations with the responsible government agency and a qualified adviser.