Canada · Self-employed vehicle expenses

CRA motor vehicle expenses for self-employed Canadians.

Start with the question that changes everything: are you an employee, self-employed, or using your own vehicle through a corporation? Pick your situation below, then use the business-use calculator if the self-employed path applies to you.

Last reviewed September 28, 2026 · Primary sources: CRA and Finance Canada

CRA calculation source ↗CRA mileage records →

Start here

Which situation describes your driving?

Choose one path first. The tax treatment changes depending on who pays the vehicle costs and whether you are claiming business income or employment expenses.

Your likely path

Use actual eligible vehicle costs and your business-use percentage.

Keep total kilometres, business kilometres and supporting receipts. The operating-expense calculation generally starts with eligible vehicle costs multiplied by the business-use percentage. Vehicle CCA is calculated separately.

Eligible costs × business-use % → operating-expense business share

Calculate your business-use share ↓The CRA 73¢ / 67¢ prescribed allowance rates are not a flat self-employed deduction rate.

Self-employed quick check

Estimate the business share of your operating expenses.

This quick calculator handles the simple business-use percentage calculation. It does not calculate CCA, tax payable, or every CRA limit that may apply to interest or leasing costs.

Want to see the full CRA worked example?27,000 business km · $5,400 operating-expense pool · step-by-step method

CRA motor vehicle expense worksheetIllustrative example from CRA guidance

Business kilometres27,000 km

Total kilometres30,000 km

Business use90%

Vehicle expenses$5,400

Business portion$4,860

Then add eligible amounts CRA treats separately in this example

Business parking+$40

Supplementary business insurance+$100

Total claim in CRA example$5,000

This reproduces CRA’s calculation example to explain the method. Your deductible amount depends on your own kilometres, eligible expenses, vehicle type and applicable limits.

What goes into the $5,400 expense pool?

CRA’s example adds the vehicle’s operating expenses first, then applies the business-use percentage.

ExpenseCRA exampleHow it enters the calculation

Licence & registration$100Included in vehicle expenses

Gas & oil$2,400Included in vehicle expenses

Insurance$1,900Included in vehicle expenses

Interest$800Subject to applicable vehicle rules and limits

Maintenance & repairs$200Included in vehicle expenses

Total vehicle expenses$5,40090% business-use percentage applied

CRA also lists electricity costs for zero-emission vehicles and eligible leasing costs among motor vehicle expenses that may be deductible. Interest and leasing costs can be subject to limits.

The calculation is easier to understand as three separate jobs.

Mileage establishes the percentage. Receipts establish the expense pool. CRA rules determine which amounts belong inside or outside it.

Measure vehicle use

Keep total kilometres and the kilometres driven to earn business income.

Business km ÷ total km

Total eligible vehicle expenses

Keep receipts and records for operating costs that can enter the motor vehicle expense calculation.

Fuel + insurance + repairs + …

Apply the business-use percentage

Multiply the eligible expense pool by the proportion connected with earning business income.

Business-use % × expenses

Not every vehicle amount follows the same path.

Three areas are worth separating from the simple business-percentage calculation.

Business parkingCan be deducted in full when related to business activities

CRA specifically states that business-related parking fees can be deducted in full rather than being reduced by the normal business-use percentage.

Supplementary business insuranceCan also be deducted in full

CRA gives supplementary business insurance the same separate treatment in its motor vehicle expense guidance.

Capital cost allowanceCalculated separately from regular motor vehicle expenses

CCA is not part of the ordinary operating-expense total shown above. CRA reports CCA separately, and passenger-vehicle limits can apply.

Vehicle CCA is the purchase-cost path, not an operating expense.

A vehicle purchase is generally a capital expense, so CRA does not treat the full purchase price like fuel or repairs. Capital cost allowance lets you deduct eligible capital cost over time, subject to the vehicle class, business use and applicable limits.

Operating expensesLine 9281

Fuel, insurance, maintenance, eligible interest and leasing costs enter the motor vehicle expense calculation.

Capital cost allowanceLine 9936

CCA is calculated separately for depreciable vehicle cost and is reported on its own line of Form T2125.

Show 2026 CCA classes and vehicle limitsClass 10 · Class 10.1 · Class 54 · purchase, lease and interest limits

Class 1030%

Includes motor vehicles and passenger vehicles that do not fall into Class 10.1.

Class 10.130%

For a passenger vehicle acquired in 2026 above the prescribed ceiling, the CCA capital-cost ceiling is $39,000 before tax. Each Class 10.1 vehicle is listed separately.

Class 5430%

Eligible zero-emission vehicles that would otherwise be in Class 10 or 10.1 can fall in Class 54. The 2026 passenger-vehicle capital-cost ceiling remains $61,000 before tax.

2026 automobile deduction limitsFour numbers worth keeping separate

Class 10.1 CCA ceiling$39,000before tax

Class 54 ZEV ceiling$61,000before tax

New lease deduction limit$1,100/mobefore tax

New auto-loan interest limit$350/momaximum allowable interest deduction

Business use still matters. If the vehicle is used for both business and personal driving, the deductible CCA is based on the business-use portion. CRA also allows you to claim anywhere from zero up to the maximum CCA available for the year.

CRA capital cost allowance guide ↗

Where does the calculation go on Form T2125?

For self-employed business or professional income, CRA uses Form T2125 to report business income and expenses.

RecordsMileage log + receipts

→

Chart AMotor vehicle expenses

→

T2125Line 9281Motor vehicle expenses, not including CCA

CCA follows a separate reporting pathT2125 · Line 9936 — Capital cost allowance

Official Form T2125 page ↗

The percentage is only as useful as the mileage behind it.

CRA says to support the motor vehicle expense calculation with records of total kilometres and kilometres driven to earn business income. An accurate logbook maintained throughout the year is the best evidence of vehicle use.

Trip recordDate · destination · purpose · kilometres

Vehicle recordTotal km · business km

Period recordOpening & closing odometer

Expense supportReceipts and supporting documents

Delivery driving uses the same business-use question.

If you earn self-employment income from delivery work, vehicle costs connected with earning that income may form part of the motor vehicle expense calculation. Keeping business and personal kilometres separated makes the business-use proportion easier to support later.

Mileage tracking for delivery drivers →

73¢ / km is not this calculation.

The CRA prescribed automobile allowance rate is primarily an employee-allowance concept. It is not a universal flat mileage deduction for self-employed drivers.

See the 2026 CRA mileage rate guide →

Motor vehicle expense questions.

The worksheet shows the general structure. Specific limits and vehicle rules can change what enters the final calculation.

What vehicle expenses may be deductible?

CRA lists licence and registration fees, fuel and oil, electricity for zero-emission vehicles, insurance, eligible interest, maintenance and repairs, and eligible leasing costs among motor vehicle expenses that may be claimed.

Is CCA included in the normal motor vehicle expense total?

No. CRA treats capital cost allowance separately from motor vehicle expenses not including CCA. Different vehicle classifications and limits can affect the CCA calculation.

Are business parking fees reduced by my business-use percentage?

CRA says the full amount of parking fees related to business activities can be deducted separately from the normal business-use calculation.

What if I use more than one vehicle?

CRA says to keep separate records for each vehicle and calculate each vehicle’s expenses separately.

Can a self-employed person write off the cost of a vehicle in Canada?

A vehicle purchase is generally a capital expense rather than a regular operating expense. The business may be able to claim capital cost allowance over time, subject to the vehicle's CCA class, business-use percentage and the applicable limits.

What is capital cost allowance on a vehicle?

Capital cost allowance, or CCA, is the tax deduction used for eligible depreciable capital property. For vehicles, the class and acquisition cost determine the CCA base and rate, while mixed personal and business use can reduce the deductible business share.

What is the 2026 Class 10.1 passenger-vehicle limit?

Finance Canada set the 2026 Class 10.1 CCA ceiling at $39,000 before tax for new and used passenger vehicles acquired on or after January 1, 2026.

Can I deduct vehicle expenses if my employer already pays my mileage?

Generally, not for the same driving if your employer reimburses you or pays a reasonable non-taxable per-kilometre allowance. If the allowance is taxable, or your eligible employment vehicle expenses exceed a non-taxable allowance and you voluntarily include that allowance in income, a claim may be possible if the other employment expense conditions are met.

Is this the same as multiplying kilometres by the CRA rate?

No. The prescribed per-kilometre allowance rate and the self-employed motor vehicle expense calculation are different concepts.

CRA — Employment motor vehicle expensesReimbursements, non-taxable allowances and T2200 conditions

↗

CRA — Automobile allowances and reimbursementsWhen a per-kilometre allowance can be non-taxable

↗

CRA — Motor vehicle expensesBusiness-use rules and related guidance

↗

CRA — Calculating motor vehicle expensesOfficial $5,400 / $4,860 example

↗

CRA — Capital cost allowanceVehicle classes, CCA calculation and business-use rules

↗