CRA mileage rates 2023
The 2023 CRA mileage rates are 68¢ per km for the first 5,000 kilometres driven and 62¢ per km after that. The Northwest Territories, Yukon, and Nunavut have an additional 4¢ per km allowed for travel.
Ontario mileage rate 2023
Ontario uses the official CRA mileage rate for the reimbursement of business-related vehicle expenses. The 2023 Ontario mileage rates are 68 cents per kilometre for the first 5,000 km driven and 62 cents per km after that.
Looking for the 2024 CRA mileage rates? For this year, the Canadian Revenue Agency updated the rates to 70 cents for the first 5,000 km, and 64 cents per km after that. The Northwest Territories, Yukon and Nunavut again benefit from an additional 4 cents per km.
How the CRA set the 2023 mileage rate
Every year the CRA revises the set per-kilometre rate and amends it based on several factors such as fuel prices, costs of maintenance, insurance and more. The 2023 CRA mileage rate is no exception. With the higher fuel costs throughout 2022, the Canada Revenue Agency raised the 2023 mileage rate by seven cents - a solid increase compared to the rate's amendments in previous years.
Using the 2023 Canadian mileage rate
The 2023 mileage rate is used to reimburse employees for business-related kilometres driven with employees' personal vehicles.
As an employee, it is likely that your employer is reimbursing your business kilometres expenses. While employers are advised to use the official CRA mileage rate, keep in mind it is not mandatory and they may choose to reimburse you at a rate different than the 2023 mileage rate throughout the year.
If you are not reimbursed for your expenses from your workplace, or you receive a taxable vehicle allowance, you will be able to claim a tax deduction for your business-related driving based on the actual expenses you have for running and maintaining your vehicle for business purposes. Your reimbursement will be taxed if you receive a fixed monthly allowance to cover your business-related car costs, if your employer pays out car allowance on a per-kilometre basis at a higher or lower rate than the reasonable per-kilometre rate set by the CRA, or if your allowance is not based on your actual business kilometres.
For more information on employee reimbursement and deductions for business-related kilometres, see our CRA mileage guide for employees.
It is common practice to reimburse your employees for their business-related kilometres if they use their personal vehicles. The per-kilometre allowance for 2023 in Canada is 68 cents per km for the first 5000 km and 62 cents per km after that. You are not required to reimburse employees at the rate set by the CRA. You can reimburse them at a higher or lower than the official per km 2023 rate.
The 2023 mileage rate represents the maximum amount you can deduct as business expenses, and you can use it as a guide to determine if the per-kilometre allowances you pay out to employees are reasonable. Factors such as the type of vehicle and the driving conditions are also used by the CRA to decide if the allowances you pay out are considered reasonable.
If you reimburse employees for their business driving with a rate per km that the CRA deems not reasonable, these reimbursements will be considered a taxable benefit and must be included in your employees' income. If you pay your employees an allowance for 2023 based on the per-kilometre rate set by the CRA, you should not deduct CPP contributions, EI premiums, or income tax. For more examples of instances when the mileage reimbursement you provide may be taxable, see our dedicated mileage reimbursements for employers in Canada guide.
As a self-employed individual in Canada, you cannot use the 2023 CRA mileage rate to claim tax deductions for your business-related car expenses. You are able to deduct the actual expenses you've had throughout the year for the ownership and operation of your vehicle for the business portion of its use. You must have kept a logbook with all trips - business and personal, throughout 2023, as well as all receipts and invoices of your motor vehicle expenses. Find more details on claiming motor vehicle expenses for the 2023 tax year in our dedicated guide to mileage deductions for the self-employed.
- CRA Mileage Rate 2024
- Travel Expenses for Employees
- Deducting Vehicle Capital Cost Allowance in Canada
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CRA mileage rate 2023 in Canada. See how to use the CRA 2023 mileage rate as an employee, employer or self-employed individual.