CRA per-kilometre allowance (2026)
Finance Canada sets a reasonable per-kilometre rate each year. For 2026 in the provinces it is 73 cents on the first 5,000 business kilometres and 67 cents after that. Yukon, Northwest Territories, and Nunavut add 4 cents (77¢ then 71¢). An employer allowance at or below that rate, paid only on business kilometres, is often treated as a tax-exempt allowance. A flat monthly car amount usually is not.
These are not the CRA employee travel-directive kilometric rates, which differ by province. Use this page for the income-tax “reasonable allowance” estimate. Keep a log of business vs personal km. Rates change; check the Department of Finance announcement for the year you are filing.
Common questions
Does a higher rate become taxable?
If the allowance is more than the prescribed rate, or is not based on kilometres, it may be taxable. Ask a tax preparer.
Can I deduct actual gas instead?
If you receive a reasonable per-km allowance, you generally cannot also deduct the same car costs. Rules differ for commissioned employees and the self-employed.
Is this the same as NJC/CRA staff travel rates?
No. Those quarterly provincial tables are a different program. This page uses the annual tax-exempt allowance rates.