If you use your own car for freelance or business work, you can deduct the business share of what it costs to run, as long as the costs are reasonable and you have receipts. The single most important document is your kilometre logbook, because it's how you prove the business share.
The CRA lists these motor vehicle expenses for line 9281 of Form T2125:
Capital cost allowance (CCA, the tax version of depreciation) is claimed separately on line 9936. For passenger vehicles there are dollar limits on CCA, interest and leasing costs; check Guide T4002 for the current year's limits before you claim them.
If the vehicle is used for both business and personal driving, you deduct only the business part:
business kilometres ÷ total kilometres × eligible expenses
Two items don't have to be split: the CRA says you can deduct the full amount of business parking fees and supplementary business insurance for the vehicle.
| Item | Amount |
|---|---|
| Total km driven in 2026 (odometer Jan 1 to Dec 31) | 20,000 km |
| Business km (from the logbook) | 8,000 km (40%) |
| Fuel $2,400 + insurance $1,800 + repairs $900 + registration $120 | $5,220 |
| Business portion: $5,220 × 40% | $2,088 |
| Parking at client sites (100% business) | $150 |
Without the logbook, there's nothing to support the 40%.
Driving to meet a client, pick up supplies, or get to a job site is business driving. Driving between your home and your regular place of business is generally personal, unless your home is the base of your business operations. If you mostly work from a home office and drive out to clients, write down each trip as it happens.
For each business trip, the CRA wants:
Also record the odometer reading at the start and end of the year, plus the date and reading whenever you buy, sell or trade a vehicle. If you use more than one vehicle for the business, keep a separate record for each and calculate each one's expenses separately.
Keeping a log every day forever is a pain, so the CRA allows a shortcut:
The CRA's own example: a base year of 49% annual business use, with 46% in April to June. A later April-to-June sample shows 51%. (51 ÷ 46) × 49% = 54%, which is accepted because it's within 10 points of the base year (between 39% and 59%). If the result moves by more than 10 points, the sample is only good for those three months, and you should start a new 12-month base year.
Keep the base-year logbook for six years from the end of the last year you rely on it. See our record-keeping guide for the general rules, and the T2125 categories guide for the other expense lines.
If you're registered for GST/HST, you may also be able to claim input tax credits for the business share of the GST/HST you paid on vehicle costs. Keep receipts that show the tax. See how to track GST/HST.
Want this in a spreadsheet? The Canada Self-Employed Income, Expense & GST/HST Tracker ($19 CAD, Excel/Google Sheets) logs income, expenses by T2125 line, and GST/HST collected and paid, with monthly totals.
For each business trip: the date, destination, purpose and kilometres driven. Also record the odometer reading at the start and end of the year (and when you buy, sell or trade a vehicle).
After you keep a full 12-month logbook to set a base year, the CRA lets you keep a three-month sample logbook in later years, as long as the calculated business use stays within 10 percentage points of the base year and the base year is still representative of normal use.
Generally no. The CRA treats travel between your home and your regular place of business as personal, unless your home is the base of your business operations. Trips to clients, suppliers and job sites are business trips.
Operating costs (fuel, insurance, licence, repairs, interest, leasing) are calculated in Chart A and go on line 9281. Capital cost allowance on the vehicle goes on line 9936.