Updated October 29, 2026
For 2026, the CRA's reasonable per-kilometre allowance rate is 73 cents a km for the first 5,000 km, and 67 cents a km after that. In Yukon, the Northwest Territories and Nunavut it's 77 cents and 71 cents. These apply from January 1, 2026.
| Where | First 5,000 km | After 5,000 km |
|---|---|---|
| Provinces | 73¢ | 67¢ |
| Territories | 77¢ | 71¢ |
Per business km driven in 2026. Each rate is one cent up from 2025.
It's the rate the CRA generally accepts as reasonable when an employer pays an allowance for an employee driving their own car for work. The allowance isn't taxable to the employee when all of these are true:
A rate above or below the CRA's can still be reasonable. The car, the roads and local fuel prices all come into it.
If you're self-employed, there's no flat rate per km. You claim the business share of what the car actually cost to run, worked out from your logbook, on Form T2125. Employees who have to pay their own car costs claim them on Form T777 with a T2200 signed by their employer.
You work in Ontario and your employer pays a per-km allowance for your own car. In 2026 you drive 7,200 km for work.
| First 5,000 km at 73¢ | $3,650.00 |
| Next 2,200 km at 67¢ | $1,474.00 |
| At the CRA's rates | $5,124.00 |
The 5,000 km count starts over every January 1.
| Year | First 5,000 km | After |
|---|---|---|
| 2025 | 72¢ | 66¢ |
| 2024 | 70¢ | 64¢ |
Provinces. Add 4 cents for the territories.
The CRA asks for a logbook entry for every business trip: the date and destination, what the trip was for, and the km driven. You also need the total km you drove that year, which means an odometer reading on January 1 and another on December 31.
After the first year there's a shortcut. Keep a full logbook for one 12 month base year. In later years a 3 month sample logbook can stand in for the whole year, as long as the results stay within 10% of the base year. The CRA's own example: business use of 51% in the sample, against 46% for the same three months of the base year, with 49% for the full base year, works out to (51 ÷ 46) × 49, or about 54% for the year.
The free printable mileage log comes in an A4 version that works in km.
This is general information, not tax advice. Check with a tax professional about your own return.
For a log on your phone, Milepost works in km and has both CRA tiers built in, territory rates included. It's coming soon to the App Store.