The Canada Revenue Agency (CRA) sets the mileage rate for 2025 at $0.67 per kilometre for both personal and business use. This rate covers operating costs such as fuel, oil, repairs, insurance, and depreciation. It applies to employees claiming work-related travel and self-employed individuals reporting business kilometres.
Claiming vehicle expenses under the CRA mileage rate simplifies recordkeeping. Instead of tracking actual costs, taxpayers multiply kilometres driven for work or business purposes by the standard rate. The CRA updates this rate annually based on average fuel prices and vehicle operating costs. For 2025, the rate remains unchanged from 2024, reflecting stable fuel and maintenance costs.
Individuals who drive for work, run a small business, or commute between job sites may deduct eligible mileage. The rate applies only to kilometres driven for employment, business, or charitable purposes. Personal travel, such as commuting to a primary workplace, does not qualify unless it involves specific work duties during the trip.
The CRA mileage rate is a flat-rate allowance designed to simplify tax reporting. Taxpayers do not need to itemize fuel receipts, repair bills, or insurance premiums. Instead, they calculate their deduction by multiplying the number of qualifying kilometres by $0.67.
For example, if a freelance graphic designer drives 2,500 km for client meetings in 2025, their deductible amount is 2,500 × $0.67 = $1,675. This amount can be claimed on line 21700 of the T1 General tax return. The taxpayer must maintain a log of dates, destinations, and purpose of each trip.
Using the standard rate avoids disputes over actual expenses. The CRA recognizes that most people cannot track every dollar spent on vehicle operation. The rate accounts for national averages, reducing administrative burden. However, if actual costs exceed the standard rate, taxpayers may claim actual expenses-but must keep detailed records.
There are two main categories of mileage claims: employee business travel and self-employed business use. Both use the same $0.67 rate for 2025, but eligibility differs.
| Claim Type | Eligible Expenses | Required Documentation | CRA Rate (2025) |
|---|---|---|---|
| Employee travel for work | Commute between home and job site, client visits, training | Log of trips, date, destination, purpose | $0.67/km |
| Self-employed business use | Client meetings, deliveries, business errands | Business mileage log, vehicle ownership proof | $0.67/km |
| Charitable travel | Volunteer work requiring travel | Proof of volunteer status, trip log | $0.67/km |
Employees must report mileage on Form T2200, Declaration of Conditions of Employment, if claiming more than $500 in travel expenses. Self-employed individuals report mileage on Schedule 8 of their T1 return. Charitable travel is limited to $0.67 per kilometre and capped at 5,000 km annually.
A common misunderstanding is that the rate applies to all driving. It does not. Only kilometres driven for work, business, or charitable purposes count. Driving to and from a regular job location is not deductible unless the employer requires travel beyond normal commuting distance.
Many taxpayers incorrectly assume the CRA mileage rate includes insurance or parking fees. It does not. The rate covers only operating costs directly tied to vehicle use. Insurance, registration, and parking are not included in the $0.67 rate and must be claimed separately if they are business-related.
Another error is claiming mileage for trips that include personal stops. For example, driving 100 km to a client meeting and stopping for lunch en route still counts only the 100 km as business use. The CRA requires proportional allocation if personal travel occurs during a business trip.
Some taxpayers believe the rate changes monthly. It does not. The CRA publishes the annual rate in January and applies it consistently throughout the tax year. The 2025 rate was confirmed in the CRA's 2024-2025 fiscal update, which cited average fuel prices and vehicle maintenance data from Statistics Canada.
The 2025 rate of $0.67 per kilometre matches the 2024 rate. It is unchanged from 2023, but higher than the 2022 rate of $0.61. The increase reflects rising fuel costs and inflation-adjusted maintenance expenses.
For context, the business mileage rate for 2018 was $0.54 per kilometre. That rate increased steadily through 2019 ($0.58), 2020 ($0.60), 2021 ($0.61), and 2022 ($0.61). The 2023 and 2024 rates rose to $0.67 due to sustained fuel price volatility.
Consider Sarah, a freelance marketing consultant based in Toronto. She drove 3,200 km in 2025 for client meetings, workshops, and business development. Her total deductible expense is calculated as:
3,200 km × $0.67/km = $2,144Sarah reports this amount on her T1 return under employment income deductions. She maintains a digital log with dates, client names, and trip purposes. She did not claim actual fuel or repair costs because the standard rate is sufficient and easier to verify.
Had she used actual expenses, she would have needed to track fuel purchases, oil changes, and tire replacements. Her total actual cost might have been higher or lower than $2,144. But using the standard rate reduces audit risk and saves time.
The CRA mileage rate for 2025 is $0.67 per kilometre. It applies to work-related, business, and charitable travel. Taxpayers must keep accurate logs of trips. The rate is updated annually and reflects national averages for fuel, repairs, and depreciation.