If you use your car for work, you’re likely sitting on deductions you’re not claiming — simply because the record-keeping feels like a chore. The good news: the rules are straightforward, and the tracking takes seconds per trip once you have a system.
How the deduction actually works
The CRA lets you deduct the business-use portion of your vehicle costs. The key word is portion — you can’t write off your whole car, only the share that’s for earning income.
That share is calculated from your driving:
Business-use % = business kilometres ÷ total kilometres driven in the year
Apply that percentage to your eligible vehicle costs (fuel, insurance, maintenance, licence and registration, and the like), and that’s your deduction. Drive 8,000 business km out of 20,000 total, and 40% of those costs may be deductible.
The logbook is non-negotiable
Whatever method applies to you, the CRA expects a logbook to support the business-use percentage. For each business trip, record:
- the date,
- the destination,
- the purpose (who you saw / why), and
- the kilometres driven.
You’ll also note your odometer at the start and end of the year for the total-distance figure.
The CRA does accept a representative sample logbook in some cases once you’ve established a full-year baseline — but the safe habit is to log trips as they happen. Reconstructing a year of driving from memory in April is exactly the kind of thing that doesn’t hold up under review.
Make it a two-tap habit
Tracking trips shouldn’t require a spreadsheet in the glovebox. With PKTD you can log a trip — date, distance, and purpose — in a couple of taps, right alongside your fuel receipts, so your mileage and your vehicle costs live in the same place at tax time.
Pair that with a clean set of organized receipts and your year-end vehicle deduction becomes a single export rather than a weekend project.
The takeaway
Every business kilometre you fail to log is money left with the CRA. A few seconds per trip — and a logbook you can actually produce — turns that around.
This is general information, not tax advice. Rules differ for employees vs. the self-employed and change over time — confirm specifics with the CRA or a qualified professional. See our disclaimer.