CRA mileage rate for 2026
The reasonable automobile allowance rate set by the Canada Revenue Agency, explained simply, with calculation examples.
For 2026, the reasonable allowance rate for using a personal vehicle is $0.73 per kilometre for the first 5,000 kilometres, then $0.67 per kilometre after that.
| Kilometres driven | Provinces | Territories |
|---|---|---|
| First 5,000 km | $0.73/km | $0.77/km |
| Over 5,000 km | $0.67/km | $0.71/km |
Source: Department of Finance Canada, announcement of January 14, 2026. Checked in October 2026.
What is this rate for?
It is used to calculate a reasonable allowance paid by an employer to an employee who uses their own car for work. An allowance calculated at this rate, on business kilometres only, is generally not taxable for the employee.
Calculation example
An employee drives 7,000 business kilometres in 2026 with their own car:
- 5,000 km × $0.73 = $3,650
- 2,000 km × $0.67 = $1,340
- Total: $4,990
What about self-employed workers?
The CRA rate does not apply. A self-employed worker deducts actual expenses (fuel, maintenance, insurance, registration, interest, capital cost allowance…) multiplied by their business-use percentage. Example: 9,000 business kilometres out of 12,000 km in total, or 75%, applied to $8,000 of eligible expenses, gives an estimated $6,000 in deductible expenses.
Other automobile limits for 2026
| Limit | 2026 |
|---|---|
| Capital cost ceiling, class 10.1 (before tax) | $39,000 |
| Zero-emission vehicle, class 54 (before tax) | $61,000 |
| Deductible leasing costs (new leases, before tax) | $1,100 per month |
| Deductible interest (new loans) | $350 per month |
How KiloTax helps
KiloTax records your kilometres automatically, separates business, personal and commuting use, and applies the right method for your profile: the CRA rate for employee expense claims, actual expenses prorated for self-employed workers. Explore the features.
This page is provided for information purposes only and is not tax advice. Rules can change every year; have your situation reviewed by a Chartered Professional Accountant (CPA) or a tax specialist.
Frequently asked questions
What is the CRA mileage rate for 2026?
For 2026, the reasonable automobile allowance rate is $0.73 per kilometre for the first 5,000 kilometres, then $0.67 per kilometre after that. In the territories, an additional $0.04 per kilometre applies.
Can a self-employed worker use this rate?
No. This rate applies to allowances paid by an employer to employees. A self-employed worker deducts actual vehicle expenses in proportion to business use.
Are commuting trips eligible?
No. In Canada, your regular trips between home and your usual place of work are considered personal, even if you are entitled to deductions. Only trips made for your work count: visiting a client, going to a job site, attending an outside meeting, or travelling from one work location to another. Example: you leave home, drive to the office, then to a client, and back to the office. The home → office trip is personal; the office → client → office trips are business. KiloTax keeps commuting trips separate so they don’t skew your calculations.
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