CRA automobile allowance rates for 2026, 2025, and 2024
The automobile allowance rates are the per-kilometre amounts an employer can pay an employee for business driving without the amount being taxable. They are published by the CRA on the automobile and motor vehicle allowances page, and the 2026 figures were announced by the Department of Finance on January 14, 2026.
This page is general information, not tax advice. The United States counterpart is the IRS standard mileage rate.
The rates
| Year | First 5,000 km | After 5,000 km | Northwest Territories, Yukon, Nunavut |
|---|---|---|---|
| 2026 | 73 cents | 67 cents | 4 cents more (77 and 71 cents) |
| 2025 | 72 cents | 66 cents | 4 cents more (76 and 70 cents) |
| 2024 | 70 cents | 64 cents | 4 cents more (74 and 68 cents) |
The 5,000-kilometre threshold is per employee per year, not per vehicle.
What the rates are for
The rates apply to allowances an employer pays an employee. An allowance is reasonable, and therefore not taxable, when it is based only on business kilometres driven, the rate is reasonable, and the employee does not also get reimbursed for the same costs. An allowance that is a flat amount unrelated to kilometres is taxable.
The rates are not a deduction for self-employed people. If you are self-employed, you deduct actual vehicle costs prorated by business kilometres, which the T2125 motor vehicle expenses guide explains.
Mileage per kilometre and per mile
The CRA rates are per kilometre, and the IRS rates are per mile. One mile is 1.609 kilometres, so a per-mile rate divided by 1.609 is the same rate per kilometre. The 2026 IRS business rate of 72.5 cents a mile is about 45 cents a kilometre, and 76 cents a mile is about 47 cents a kilometre. The comparison is only arithmetic. The two rates serve different rules, and a Canadian self-employed person cannot deduct a per-kilometre amount at all. An employer that reimburses a Canadian employee in cents per mile should convert the amount to kilometres before checking it against the table above.
The operating expense benefit rate
When an employer provides the vehicle and pays its operating costs, the personal-use portion is a taxable benefit. The 2026 operating expense benefit rate is 34 cents per personal kilometre, or 31 cents for employees whose main job is selling or leasing automobiles.
How Miles handles this
- The reimbursement report for a Canada vehicle applies the current year's rates, splits the year at 5,000 kilometres, and adds the territory amount when you set the territory on the vehicle.
- You can set a custom rate when your employer pays a different one, and the report shows both the rate used and the CRA rate for the year.
- Rates ship with app updates each January.
Miles is coming soon.