If you are self-employed, and  use your personal vehicle for business, you can claim a portion of your total automobile expenses against your income, namely; fuel, vehicle insurance, vehicle repairs and maintenance, license and registration fees, and lease or interest expenses. You can also potentially claim the vehicle as a capital cost, depreciating it over time.

Record keeping

The recommended way to audit-proof yourself when making these claims is to to keep a log book detailing the kilometers driven for personal and business use.

The CRA recommendation for keeping a logbook is as follows: “To get the full benefit of your claim for each vehicle, keep a record of the total kilometres you drive and the kilometres you drive to earn business income… For each business trip, keep a log listing the following: date, destination, purpose, number of kilometres you drive.”

This will give you two numbers you plug into your tax return to calculate a percentage of total vehicle expenses you can claim for the year.

1. The total kilometres you drove during the year.
2. The total kilometres you drove for business purposes during the year.

So, if you had $4,000 in total car expenses (gas, insurance, repairs, etc.) and drove 10,000 kms for the year, with 5,000 of those kms for business, your total vehicle expenses deduction would be $2,000.

Of course, keep receipts for any expenses you claim in case of audit. I have often seen claims for business use of a personal vehicle audited by CRA.

(NB. The CRA considers driving to and from work to be personal use.)

Mileage tracking apps

For all of us who find reliably using a log book challenging, there are now some amazing options for mileage tracking apps. Installed on your phone, there are a range of options with features that automate much if not all of your mileage tracking.

Some things to consider when choosing an app:

• Is this app designed for, or recommended by, users in your industry?
• What features are automated? Ie. Can you memorize trips and specific destinations? Will it prompt you to review and classify your trips on a daily basis?
• Price.
• Ease of use. Ie. Is the design intuitive? Can you classify as business or personal with a  simple click or swipe?

Loans and leasing expenses

You can deduct a portion of loan interest or leasing expenses for a vehicle used for business purposes. See more information about that directly on CRA’s website.

Claiming mileage per km

Some people mistakenly believe that, as a self-employed person, they can claim mileage. For a business owner, this is only an option if your business is incorporated and you are an employee of that business. But if you have an employee, you can reimburse your employees for business travel using a per km mileage rate.

The current CRA approved mileage rates for 2025 are:

• 72¢ per kilometre for the first 5,000 kilometres
• 66¢ per kilometre over 5,000 kilometres
• An additional 4¢ per kilometre in the Northwest Territories, Nunavut, and Yukon.