19. april 2021

Mileage Reimbursement Guide

UPDATED JAN 5, 2022, 1 MIN READ

Welcome to Driversnote’s guide to mileage reimbursement and deduction in Canada. Here, you'll find a collection of articles and resources that will walk you through the rules around how to deduct your mileage expenses as an employee or self-employed individual and all you need to know about the CRA vehicle allowance. You can also find information on how to reimburse your employees for their business-related car expenses as an employer. 

Residents can deduct business mileage on a cost-per-kilometer basis through the Canada Revenue Agency, also known as the CRA which is the Canadian equivalent of the IRS. Knowing the laws and requirements for mileage records is crucial since it might mean the difference between getting taxed or not. For anyone living in Quebec - you need to check out the requirements by the Quebec Revenu here.

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What is mileage reimbursement? 

Mileage reimbursement refers to the compensation of mileage charges incurred when employees use their personal vehicles for business activities. Every year, the CRA publishes a rate that companies use to compensate employees.

 In this updated guide for 2021, you can find answers to the following questions about mileage reimbursement in Canada:

  • Is mileage reimbursement taxed as income? 

  • Are there requirements for mileage records? 

  • What are the automobile allowance rates for 2021?

  • Who sets the standard mileage rates? 

  • How do I best track my mileage? 

  • Do I have to reimburse my employees?

  • How can I calculate my mileage reimbursement?

Further, you will find information on how to keep a mileage logbook and what it should include. For self-employed users, we recommend you check out our guide for the self-employed to begin with. We have similar guides for employees and employers as well. There’s also an article we’ve written if you’re looking to claim back your business-related car expenses through your tax deduction.

Mileage Reimbursement for Business/Teams

If you are looking for a solution for your team, we got you covered. Mileage tracking and logging for teams is available with the Driversnote app. With simple workflows for submitting and approving mileage, you can quickly review and validate your team's reimbursement claims.

  • Mileage can now be tracked using smartphones instead of handwritten paper logbooks.
  • There is automatic trip tracking available. Never again will you forget to track a trip.
  • Create and share mileage reports with approvers in real time.

As a manager you can receive accurate and consistent mileage reports from your team or employees and get a quick overview of your team's status.
In seconds, you can:

  • approve or reject mileage reports
  • invite or remove users 
  • assign roles 

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CRA mileage rates 2022, 2021 and 2020

Check here for the mileage rate for 2022. The CRA mileage rate for 2021 is 59¢ per kilometre for the first 5,000 kilometres driven; 53¢ per kilometre above that and an additional 4¢ permitted in Northwest Territories, Yukon and Nunavut. The vehicle allowance rates for 2020 are: 59¢ per km for the first 5,000 km driven. 53¢ per km driven after.

The rate has not changed significantly thoughout the years - in the past 6 years the CRA Mileage Rate has either increased or decreased by a few cents or remained constant from year to year. 

Check the menu for an overview of articles. We hope you find what you're looking for! If not, feel free to reach out and ask us any questions you may have.

Not located in Canada? Check out our other guides here:

- Mileage guide for the US (IRS mileage guide)
Mileage guide for Australia (ATO mileage guide)
- Mileage guide for the UK (HMRC mileage guide)
- Mileage guide for Denmark 
- Mileage guide for Sweden

 


This material has been prepared for general informational purposes only, and should not be taken as professional advice from Driversnote. You should consider seeking independent legal, taxation, or financial advice from a professional to check how this information relates to your own circumstances. Relevant laws also change from time to time.