UPDATED 20, JAN, 2022 ♦ 4 MIN READ
The CRA sets a standard mileage rate each year for employers to use as a reasonable mileage rate when reimbursing their employees. The new 2022 mileage rate is now out and can be used from January 2022.
The CRA mileage rate 2022 is 61¢ per kilometre for the first 5,000 kilometres driven and 55¢ per kilometre driven after that. Note that in the Northwest Territories, Yukon, and Nunavut, there is an additional 4¢ per kilometre allowed for travel.
If you are an employer reimbursing your employees and using the standard rate, this would mean that you have to use the updated rate for 2022.
If you are an employee receiving reimbursement, this could mean that the amount of reimbursement you receive from your employer may change depending on the new rate and your employer's choice for reimbursement (they may choose to reimburse you based on the standard rate or not).
If you are self-employed the 2022 mileage rate will mean that you will receive a different amount of deduction from your taxes.
Example of mileage reimbursement with the CRA 2022 rate:
Taking into consideration the CRA mileage rate for 2022 which is $0.61 per km for this example. Now imagine that in 2022, one of your employees drove 500 km.
0.61 * 500 = $305 This is the maximum tax-free amount you can compensate your employee if they drove 500 km for business purposes.
The CRA tries to find a rate that is reasonable for the expenses one may incur when driving for business purposes.
The CRA calculates the new mileage rate based on a number of factors such as prices of petrol, cost of car maintenance. Browse the CRA mileage rates from previous years here.
No, your employer actually doesn’t have to reimburse you for the 2022 CRA mileage rate. They canchoose a higher or lower rate than the standard. If they reimburse you for a rate higher than the standard, however, you will have to pay income tax on the amount over the standard rate per mile. Using the standard mileage rate for reimbursement is common and many employers do that.
The 2022 rate will apply from January 2022. The current rate together with previous CRA rates can be found here.
To get reimbursement in 2022, there are some things you must keep on doing that you have been doing in 2021.
Let us know if you have any questions about the CRA mileage rate for 2022.
The Canadian mileage rate for 2022 is 61¢ per kilometre for the first 5,000 kilometres driven and 55¢ per kilometre driven after that. Note that in the Northwest Territories, Yukon, and Nunavut, there is an additional 4¢ per kilometre allowed for travel.