CRA Mileage Rates 2025

The 2025 CRA mileage rates have not been announced yet. The CRA normally releases the rates for the following year in December. We will update this article as soon as the rates are available. The new rates will apply from January 1, 2025. 

How is the mileage rate set? 

The Canadian Revenue Agency (CRA) revises and adjusts the mileage rate yearly based on the average costs of owning and operating a vehicle for business. 

In the past two years, we’ve seen the rate increase dramatically, with seven cents in 2023, and then more moderately, with two cents in 2024. Although we’re not sure how much the rate will increase in 2025, considering the high fuel prices, we can expect it to go up. 

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How you can use the 2025 CRA mileage rate

As an employee

If you drive for work using a personal vehicle, your employer can apply the CRA mileage rate to reimburse you for those employment-related kilometres. Be aware that your employer may choose a different per-kilometre rate for your vehicle allowance. 

We have a dedicated mileage guide for employees you can read for further information. 

As self-employed

Self-employed or business owners in Canada cannot apply the mileage rate to deduct vehicle costs at tax time. You can, however, claim actual expenses for business driving you’ve done in the previous year, as long as you factor out all personal use. Once you’ve done so, you can apply the 2025 rates to claim business kilometres in 2026.

Learn more about self-employed mileage rules in our CRA mileage guide. 

As an employer

As an employer, you have no obligation to use the 2025 CRA mileage rate to reimburse your employees for business-related kilometres. You can choose to provide vehicle allowance or reimbursement that’s higher or lower than the government rate. 

Remember, the per-kilometre rate you decide on must be deemed reasonable by the CRA.
If deemed unreasonable, the allowance provided to the employee will be considered a taxable benefit and will be taxed as part of the employee’s income. 

Our employer mileage guide contains more specific information, so head there for further guidance.

Tracking your business kilometres

Whether you’re claiming a tax deduction as a self-employed individual or a vehicle allowance from your employer, you’ll need evidence of the business kilometres you’ve driven. 

You may choose to log your trips with pen and paper, but if you drive for work daily, that can quickly become tedious. A mileage tracking app provides a convenient alternative, as it tracks all your trips automatically and allows you to generate CRA-compliant reports.