CRA Mileage Log Requirements for Canadian Freelancers (2026 Guide)
Most Canadian freelancers misunderstand vehicle deductions at the most fundamental level: they believe they can claim the "70-something cents per kilometre" rate they hear about. They can't. That rate is the CRA's reasonable allowance for employees being reimbursed by their employer — it has nothing to do with how sole proprietors deduct vehicle expenses. Self-employed Canadians use a different method entirely, and the mileage log is what makes the method work. This guide explains the difference, what the CRA requires in a compliant mileage log, the home-office exception that changes the business-use percentage for many freelancers, and the common audit traps to avoid.
The Fundamental Confusion: Employee Rate vs Self-Employed Deduction
The CRA publishes an annual "reasonable per-kilometre allowance" rate. When you see "the CRA mileage rate," this is what people are referring to. It is roughly in the high-60-cents to mid-70-cents-per-kilometre range and changes each year.
That rate applies in only one situation: when an employer reimburses an employee for using their personal vehicle for work. If the reimbursement stays within the CRA's published rate, the reimbursement is non-taxable for the employee and fully deductible for the employer. It is an administrative convenience for the employer-employee relationship.
It is not how self-employed people deduct vehicle expenses. Not by analogy, not by approximation, not with adjustments. The sole-proprietor method is completely different:
| Employee | Self-Employed Sole Proprietor | |
|---|---|---|
| Method | Per-kilometre allowance (employer pays) | Actual vehicle expenses × business-use % |
| Log used to determine | Total kilometres × rate = reimbursement | Business kilometres ÷ total kilometres = business-use % |
| What gets claimed | Reimbursement is non-taxable (no claim) | (Fuel + insurance + maintenance + interest + depreciation + parking) × business % |
| Tax form | Reimbursement on T4 (if taxable); shortfall on T777 with T2200 | Vehicle expenses on T2125, Part 4 |
For the broader self-employed tax filing picture, see our self-employed taxes in Canada guide.
For Employees Using Their Own Vehicle (Brief)
If you're an employee, this section is for you; if you're self-employed, you can skip ahead.
An employer who reimburses you at the CRA's reasonable per-km rate is providing non-taxable reimbursement — you don't report it as income, you don't claim anything on your return. If the employer pays less than the CRA rate (or nothing), and you used your vehicle for genuine employment-related travel beyond commuting, you may claim the shortfall as employment expenses on Form T777 — but only if your employer signs Form T2200 (Declaration of Conditions of Employment) confirming the conditions.
Without a T2200, employees generally cannot claim vehicle expenses regardless of how much they used their personal vehicle for work. The T2200 is the gatekeeper.
For Self-Employed Sole Proprietors (the Main Section)
Sole proprietors and partners in a partnership claim vehicle expenses on Form T2125, Part 4. The mechanics:
Step 1: Track Total Vehicle Expenses for the Year
Throughout the year, keep receipts for every vehicle-related expense:
- Fuel (gas or charging for EVs)
- Insurance premiums
- Licence and registration fees
- Maintenance and repairs
- Vehicle lease payments (with deduction limits per CRA rules)
- Loan interest (if you financed the purchase, with limits)
- Capital cost allowance (depreciation) on the vehicle's cost (within the prescribed CCA class limits)
- Business-related parking fees
- Highway tolls (407 ETR, bridge tolls) on business trips
- Roadside assistance memberships (proportional)
Step 2: Determine Your Business-Use Percentage
The mileage log produces this percentage:
Business kilometres ÷ Total kilometres = Business-use %
If you drove 18,000 km total during the year, and 9,000 of those were business, your business-use percentage is 50%.
Step 3: Multiply Eligible Expenses by Business-Use Percentage
The business-use percentage applies to all eligible vehicle expenses for the year. If your total eligible expenses were $9,400 and your business use was 50%, you claim $4,700 on T2125.
There is no per-km math involved in the deduction calculation. The kilometres only matter for determining the percentage; the actual dollar deduction comes from the actual expenses.
Required Fields in a CRA-Compliant Mileage Log
For every business trip, the log must capture:
| Field | Notes |
|---|---|
| Date of the trip | The day the trip occurred |
| Starting point | Address or location name (e.g., "Home office," "200 King St") |
| Destination | Address or location name |
| Purpose of trip | Specific business reason ("Meeting with Acme client," not "work") |
| Kilometres driven | One-way or round-trip — be consistent |
At the start and end of each year, also record:
- Odometer reading on January 1
- Odometer reading on December 31
The annual odometer difference is the total kilometres driven for the year. Your business-trip log gives you the numerator. The two together produce the business-use percentage that drives the deduction.
Receipts for each vehicle expense must be retained separately. See our guide on receipt vs proof of payment vs invoice for what counts as adequate receipt documentation for tax purposes.
Simplified vs Detailed Log Method
Keeping a detailed log of every business trip for an entire year is burdensome. The CRA recognizes this and permits a reduced-burden approach for taxpayers who have already established a representative full-year log.
The Detailed Log (Base Year)
Keep a detailed log of every trip for one full year. This establishes your "base year" — a representative reference point for your business-use percentage. Most freelancers do this in their first year of claiming vehicle expenses.
The Simplified Log (Subsequent Years)
In years after a base year, the CRA permits a simplified approach: keep a detailed log for a representative three-month period (typically a quarter that reflects your normal driving pattern), then apply that quarter's business-use ratio to your total annual kilometres.
Two conditions for the simplified method to be valid:
- You must have a proper full-year detailed log from a prior base year
- The simplified-method calculation must be within 10% of your base-year business-use percentage. If your pattern has materially shifted (more or fewer business trips), the simplified method no longer applies and you need a fresh detailed log.
For freelancers whose driving pattern changes year to year (e.g., a consultant who works on one client for 6 months and a different client for 6 months), the simplified method may not be reliable. When in doubt, keep the detailed log.
What Counts as "Business" Use (Including the Commute Exception)
The trickiest part of mileage logging is correctly classifying trips as business or personal. The general rule: trips driven for income-earning purposes are business; trips driven for personal reasons are personal.
Business Trips
- Trips to client sites for meetings, work delivery, or pickup
- Trips between business locations (if you have multiple)
- Trips to suppliers for business materials
- Trips to business-related training, conferences, or networking events
- Trips to the bank or post office for business reasons
- Trips for business meals with clients (the meal itself has separate deduction rules)
Personal Trips (Not Business)
- Daily commute from home to a regular workplace (the "commute" rule)
- Personal errands (groceries, school pickup, social visits)
- Trips to a regular workplace even if you sometimes do business calls in the car
The Commute Exception — Why It Matters
The single most important classification rule: your daily commute from home to a regular place of work is personal, not business. Even if you're going to "work," the daily commute is not deductible.
This becomes a problem for freelancers who routinely visit one main client's office. If a CRA auditor concludes that client's office is effectively your "regular workplace," your trips there are commuting — not business — and your business-use percentage drops dramatically.
The Home-Office Basis: Why It Matters for Freelancers
The commute rule has a crucial exception for self-employed people whose home is their principal place of business. If your home office is where you do most of your work — answering emails, taking calls, preparing client deliverables, doing administrative work — then your home is your "regular workplace." Trips from home to client sites are no longer commuting; they are business trips between locations.
This matters enormously. A freelancer whose home is their principal place of business may have 60–80% business use. The same freelancer classified as commuting from home to a "regular" client site could be told 10% — a difference of thousands of dollars in deductions.
The CRA's test for "principal place of business" considers:
- Where you spend the most working hours
- Where you meet clients regularly (your home, their offices, or a coffee shop)
- Where you store business records and equipment
- The address you use on invoices, business filings, and websites
For freelancers operating as sole proprietors from a home office, the address on your invoices should be your home address (not a client's address). This consistency reinforces that your home is the principal place of business — see our sole proprietor invoice guide for the broader naming and address conventions.
Common Audit Pitfalls
1. Reconstructed Logs After the Fact
A mileage log written from memory in March when filing taxes for the prior year is exactly what the CRA is looking for. Reconstructed logs often show suspiciously consistent patterns (every Tuesday the same trip, every month identical kilometres) that don't match real driving behaviour. Keep the log contemporaneously — daily or weekly, not annually.
2. Suspiciously Round Numbers
Every trip exactly 25 km. Every meeting exactly 1 hour of driving. Round numbers in a mileage log signal estimation rather than measurement. Real driving produces messy numbers — 23.4 km, 11.7 km, 47.2 km. Round numbers everywhere is a red flag.
3. Business Use Over 90% With No Parallel Personal Vehicle
If your mileage log claims 95% business use but your household has no second vehicle, the CRA will ask: how do you do groceries, drive your kids around, get to the dentist? Either you have a separate personal vehicle, or your business-use percentage is unrealistic. Sole props with one vehicle and family responsibilities typically land in the 40–70% range.
4. Mileage Log Totals That Don't Reconcile With Odometer Readings
The sum of all logged trips (business + personal) should approximately equal the difference between your December 31 and January 1 odometer readings. A material gap suggests either missing trips or counting trips that didn't happen.
5. Claiming the Per-Kilometre Rate as a Sole Proprietor
Filing T2125 with a vehicle deduction calculated as "kilometres × CRA per-km rate" is the wrong method. The CRA will either reject the deduction or reassess using the actual-expenses-times-percentage method. Some self-employed people get away with this for years and then face a costly audit; doing it right from the start is significantly easier.
6. No Receipts for the Vehicle Expenses Themselves
Even a perfect mileage log produces no deduction without supporting receipts for fuel, insurance, maintenance, and other expenses. The log proves the business-use percentage; the receipts prove the dollar amounts.
Tools for Tracking Mileage
Four common approaches; each works if used consistently.
Paper Log Book
A small notebook kept in the vehicle, filled in at the end of each trip. Lowest tech, fully CRA-acceptable, no subscriptions. Best for low-mileage freelancers who want zero overhead.
Spreadsheet (Excel or Google Sheets)
A simple spreadsheet with one row per trip and columns for date, start, end, purpose, kilometres. Easy to total at year end. Most freelancers can build this in 10 minutes. Bonus: easier to share with an accountant.
Mileage Apps
Many smartphone apps designed specifically for mileage tracking. Look for ones that export CSV or PDF at year end so the data integrates with your tax-prep workflow. Several options on both iOS and Android; pricing typically $5–$10/month or one-time purchase.
GPS-Based Auto-Tracking Apps
Apps that detect when you start driving (via phone GPS) and automatically log the trip; you then categorize each trip as business or personal. Convenient for high-mileage freelancers, but consider privacy implications — the app sees every trip you take.
Whichever method you pick, the important thing is consistency. Switching between methods mid-year or going months without logging creates the gaps that auditors find suspicious.
Frequently Asked Questions
Do I need to keep a mileage log if I'm self-employed?
Yes, if you're claiming any vehicle expenses on your T2125. The CRA requires the log to substantiate the business-use percentage. Without one, vehicle deductions may be denied or assigned an arbitrary low percentage.
Can I claim the CRA per-kilometre rate as a sole proprietor?
No. The per-km rate is for employee reimbursement. Sole props claim actual vehicle expenses × business-use percentage from the mileage log. The two methods are entirely different.
Is a Google Maps history acceptable as a mileage log?
It can support a log but isn't sufficient on its own. Maps history shows where and when, but doesn't categorize trips as business or personal or include the trip purpose. Use it as a memory aid; the log still needs the required fields.
What if I only use my vehicle a little for business?
Low business use is still deductible at the corresponding low percentage. For very occasional business use, some freelancers don't claim vehicle expenses at all to avoid the record-keeping burden. Trade-off depends on the dollar amounts; consult an accountant if material.
Can I switch from the detailed to the simplified method?
Yes, after establishing a representative detailed log for a base year, and only if the simplified-method calculation stays within 10% of the base-year ratio. If your driving pattern has materially shifted, return to a detailed log.