What Is Mileage Reimbursement?
Mileage reimbursement is a term referring to the monetary amount you receive for using a personal vehicle for business purposes (And medical, moving and charitable purposes). The reimbursement covers all costs of owning and driving your vehicle for the qualified mileage or kilometres.
Learn more about medical, moving and charity rates and reimbursement in the US.
Now that we have covered what mileage reimbursement is, let’s see how much it is and how you can receive it.
How much can I receive in mileage reimbursement?
Your local tax authority sets mileage rates each year based on the general costs of owning and running a vehicle. Rates differ based on the purpose of your driving, with business rates being the highest. Mileage reimbursement is calculated on a cents-per-mile or cents per kilometre basis. Ergo, the more you drive for work, the higher your mileage reimbursement will be. There is no upper limit to the miles you can be reimbursed for, with some exceptions, for example, in Australia.
How can I receive mileage reimbursement?
As an employee, you will most likely receive business mileage reimbursement from your employer. If your employer reimburses you at a lower than the official rate or does not at all, you can claim business mileage reimbursement on your annual tax return.
As a self-employed or a business owner, you deduct business mileage on your annual tax return.
In order to receive reimbursement, you need to keep tax-compliant records of your mileage as proof of your claim. Learn more about what records you should keep for your reimbursement:
See the methods and a step-by-step explanation of the five steps to claiming motor vehicle expenses from the CRA as a self-employed individual or an employee.
CRA Mileage rate 2023 in Canada. See the new CRA per-km rate for business kilometres and how to claim mileage in the new year with the CRA 2023 mileage rate.
See the pros and cons of company cars and car allowances in Canada and decide which is right for your company - make the best choice for your business & employees.