Sep 1, 2026 · 5 min read
CRA Mileage Rate 2026: 73¢/km
Every January the CRA updates its automobile allowance rates, and every year thousands of people claim the wrong one. Here are the 2026 numbers, what they actually apply to, and — because many of our readers work on both sides of the border — the 2026 IRS rates too, which unusually changed twice this year.
The 2026 CRA rates
73¢/km
First 5,000 business km
67¢/km
Every km after 5,000
+4¢/km
Yukon, NWT & Nunavut
Effective January 1, 2026. So a year with 12,000 business kilometres works out to: 5,000 × $0.73 + 7,000 × $0.67 = $8,340. Our mileage calculator does this math for you.
Recent years at a glance
| Year | First 5,000 km | After 5,000 km |
|---|---|---|
| 2026 | 73¢ | 67¢ |
| 2025 | 72¢ | 66¢ |
| 2024 | 70¢ | 64¢ |
| 2023 | 68¢ | 62¢ |
The catch: who the per-km rate is actually for
The CRA per-kilometre rate is the maximum tax-free allowance an employer can pay an employee who uses their own car for work. It is not, strictly speaking, a deduction rate for the self-employed.
If you are a freelancer or sole proprietor filing a T2125, your motor vehicle deduction is your actual vehicle costs — fuel, insurance, licence and registration, maintenance, lease payments or capital cost allowance — multiplied by your business-use percentage (business km ÷ total km, from your logbook).
Still worth knowing the rate. The per-km rate is the standard benchmark for billing clients for travel, reimbursing yourself through your own corporation, and sanity-checking whether your actual-cost claim is reasonable.
The logbook is not optional
Whichever side of the calculation you are on, the CRA expects a trip log: date, destination, purpose, and kilometres for every business trip, plus odometer readings at the start and end of the year. After one complete 12-month logbook, you can switch to a three-month sample each year if your driving pattern stays consistent. Keep everything for six years.
Meanwhile in the US: two IRS rates this year
The IRS set the 2026 standard business rate at 72.5¢ per mile in December 2025 — then raised it to 76¢ per mile effective July 1, 2026, its first mid-year adjustment since 2022. That means US filers must split their 2026 mileage log in two:
- Jan 1 – Jun 30, 2026: 72.5¢ per business mile (medical: 20.5¢)
- Jul 1 – Dec 31, 2026: 76¢ per business mile (medical: 23.5¢)
- Charity: 14¢ per mile all year (set by statute)
Unlike Canada, the IRS standard mileage rate is a deduction method for the self-employed — you can use it instead of tracking actual car expenses, as long as you choose it in the first year you use the car for business.
Calculate yours
The Solobooks mileage calculator applies the current CRA tiers (including the northern bonus) or either 2026 IRS period. Free, no signup.
Frequently asked questions
What is the CRA mileage rate for 2026?
For 2026 the CRA automobile allowance rate is 73 cents per kilometre for the first 5,000 km driven for business, and 67 cents per kilometre after that. In Yukon, the Northwest Territories, and Nunavut, an extra 4 cents per kilometre applies (77¢ / 71¢). The rates took effect January 1, 2026.
Can self-employed people just claim 73¢/km on their taxes?
Not exactly. The per-kilometre rate is the maximum tax-free allowance an employer can pay an employee. If you are self-employed, your T2125 motor vehicle deduction is your actual vehicle costs (fuel, insurance, repairs, lease or depreciation) multiplied by the business-use percentage from your logbook. The per-km rate is still a useful benchmark — and it is the standard way to bill clients for travel.
What mileage records does the CRA require?
A logbook recording the date, destination, purpose, and distance of every business trip, plus your odometer readings at the start and end of the year. After keeping one full-year logbook, the CRA lets you use a three-month sample logbook in later years if your usage pattern stays consistent. Keep records for six years.
What is the IRS mileage rate for 2026?
The IRS business rate started 2026 at 72.5 cents per mile, then rose to 76 cents per mile for miles driven on or after July 1, 2026. The medical rate is 20.5¢ (Jan–Jun) and 23.5¢ (Jul–Dec); the charitable rate stays at 14¢ all year.
Why are there two IRS rates in 2026?
The IRS occasionally adjusts the standard mileage rate mid-year when driving costs move sharply — it last did this in 2022. For 2026 taxes you multiply January–June miles by 72.5¢ and July–December miles by 76¢, so your log needs dates on every trip.