The per-km rate is not your deduction

Many self-employed people multiply their business kilometres by the CRA per-kilometre rate. That is not how the deduction works.

What the rates are

For 2026, the reasonable per-kilometre allowance an employer can pay tax-free is $0.73 for the first 5,000 km and $0.67 after that. In Yukon, the Northwest Territories and Nunavut it is $0.77 and $0.71.

These rates set the limit on allowances employers pay to employees. They are not a method for self-employed people to claim vehicle costs.

What self-employed people claim

You claim your actual vehicle costs (fuel, insurance, repairs, interest, and so on) multiplied by your business-use percentage, plus parking and supplementary business insurance in full. That is what T2125 Chart A does.

Calculate your actual deduction