The Complete Mileage Deduction Guide for Canadian Freelancers (2025)
Everything self-employed Canadians need to know about deducting vehicle expenses — from the logbook requirement to the maximum deductible costs, with 2025 CRA limits.
Marcus Chen
Tax Specialist
Vehicle expenses are one of the largest available deductions for Canadian freelancers who drive for work — and one of the most closely scrutinized by the CRA. Done correctly, you can deduct a proportional share of all vehicle operating costs based on the percentage of kilometres driven for business. This guide covers everything: logbook requirements, eligible expenses, 2025 CRA limits, and what happens if you're audited.
Business vs. Personal Driving: What Qualifies
- Travel to client sites, job locations, and meetings
- Driving to pick up supplies or equipment for your business
- Trips to networking events, conferences, and professional development
- Visits to your accountant, lawyer, or bank for business purposes
- NOT deductible: commuting from home to a regular fixed workplace
- Exception: if your home is your principal place of business, trips from home to client sites count as business travel
The Logbook Requirement — Non-Negotiable
The CRA requires a contemporaneous mileage logbook. Each entry must record: date, starting location, destination, business purpose, and kilometres driven. At year-end, you calculate total business kilometres ÷ total kilometres driven to get your business-use percentage. That percentage applies to all eligible vehicle expenses.
Eligible Vehicle Expenses (2025)
- Fuel and oil
- Insurance premiums
- Repairs and maintenance
- License and registration fees
- Lease payments — 2025 limit: $1,100/month before tax
- Auto loan interest — 2025 limit: $10/day
- CCA on vehicle cost — 2025 maximum: $37,000 for Class 10.1 vehicles
- Parking fees at business destinations (not parking tickets)
The Simplified Logbook Method
After keeping a full logbook for one complete year, the CRA allows a simplified approach: keep a 3-month sample logbook in subsequent years. If your business-use percentage stays within 10% of the base year percentage, the sample is sufficient. This dramatically reduces the ongoing record-keeping burden.
CRA audit reality: vehicle expense claims are one of the most common audit triggers. A logbook that was clearly prepared all at once (same handwriting, same pen, suspiciously round numbers) rather than contemporaneously is a major red flag. Use an app to timestamp entries automatically.