April 19, 2021

The current CRA automobile allowance rates

UPDATED JAN 3, 2022 • 4 MIN READ

Current 2022 automobile allowance rate 

The automobile allowance rates for 2022 for trips made after January 1st, 2022 are:

  • 61¢ per kilometre for the first 5,000 kilometres driven
  • 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.

Here is the CRA announcement of the 2022 mileage rates where you can read more. Note that you can also read more about the current 2022 mileage rate in our guide

Previous CRA automobile allowance rate - 2021 

For business-related mileage incurred from January 1, 2021, the CRA automobile allowance rates were: 

  • $0.59 per kilometer for the first 5,000km driven for business; and
  • $0.53 per kilometer driven for business after that.
  • Please note that there is an additional $0.04 per kilometer driven in the Northwest Territories, Yukon, and Nunavut.

Here is the link to the CRA’s announcement of the 2021 mileage rates with a bit more information. For the readers living in Quebec, the rates are the same and you can find the full overview here.

The current CRA mileage rate for business

The mileage rate for 2022 is 61¢ per kilometre for the first 5,000 kilometres driven. After 5000 km the rate drops to 55 cents per km driven for business purposes. In 2021, the automobile allowance rate started at 59 cents per kilometre driven for business. After 5,000 kilometres, the rate dropped to 53 cents per km driven for business.

Usually, when people talk about the automobile allowance rate or the cents per kilometre rate, they mean the one used for business - that is when you drive your personal vehicle for business purposes and are reimbursed the costs. The CRA sets the standard automobile allowance rate each year, though your employer may offer a different rate. 

As an employee, your employer can choose the rate that they reimburse mileage costs at. It’s up to your employer to set their rate and rules for reimbursement, but the CRA’s automobile allowance rate is the standard. If you're paid a higher or lower per kilometre rate than the CRA’s standard rate, those payments may be considered taxable income. 

Is there an alternative to using the automobile allowance rates?

As a self-employed entrepreneur or a business owner, you always have the option to calculate the costs of operating your vehicle for business using a logbook. Read more about how to calculate your tax deductions if you are self-employed here.

Mileage tracking made simple

Try our easy-to-use app for free.

How do I track and record mileage?

There are many options, but we believe that mileage tracking apps are your go-to. By using your phone's GPS, you can easily track and log all your trips. They also store your information and generally allow you to classify each trip as personal or business, as per the rules set down by the CRA. We've got you covered with a simple, free and user-friendly app whether you use Android or iOS. Most apps use the standard automobile allowance rates but also allow you to input your own rates if needed. 

Other alternatives are keeping a physical logbook or using a spreadsheet. Whatever you choose, be sure to understand what information you need to record for your employer or the CRA. The biggest advantage when using a logbook app in comparison to a spreadsheet is that it may take you a lot less time to log trips and there is no chance of you losing your data (as you could lose a notebook).

 

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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.