Do I need a logbook to claim vehicle expenses in Canada?

Yes. CRA requires a logbook to support any vehicle expense claim. You must record the date, destination, purpose, and kilometres for every business trip. You also need your total annual odometer reading to calculate your business-use percentage. Without a logbook, CRA can deny the entire vehicle deduction on audit.

What is the CCA cost limit for a passenger vehicle in Canada?

For vehicles purchased in 2026, the maximum depreciable cost (CCA cost limit) for a passenger vehicle is $39,000 before GST/HST. It was $38,000 for 2025 and $37,000 for 2024. If your car cost more than the cap for its purchase year, you can only claim CCA on the capped amount. The limit is indexed periodically, so check CRA's current T4002 guide for the year your vehicle was purchased.

Can I claim 100% of my vehicle expenses if I only use it for business?

If you use your vehicle exclusively for business — zero personal kilometres — you can claim 100% of eligible expenses. In practice, CRA scrutinizes 100% claims heavily. If your vehicle is also available for personal use (including commuting to a regular job), you must apply a business-use percentage based on your logbook.

What CCA class is a vehicle in Canada?

Most passenger vehicles are Class 10 (30% declining balance) or Class 10.1 (30% declining balance, limited to the cost cap, which is $39,000 for vehicles bought in 2026). Zero-emission passenger vehicles (ZEVs) may qualify for Class 54, where the enhanced first-year CCA is 55% in 2026 (down from 75% in 2024 and 2025). Commercial trucks and vans over 3 tonnes are typically Class 10 with no cost cap.

Can I claim the GST/HST I paid on my vehicle and fuel as an ITC?

If you are a GST/HST registrant on the Regular Method, yes — you can claim input tax credits for the GST/HST paid on vehicle expenses, pro-rated by your business-use percentage. On the Quick Method, you generally cannot claim ITCs on ongoing vehicle expenses.

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Vehicle Expenses for Self-Employed Canadians (T2125)

If you use your personal vehicle for business, a portion of every tank of gas, every oil change, and every insurance payment is deductible. Here is exactly how CRA wants you to calculate it and where it goes on T2125.

Quick Answer

Keep a logbook of all business trips during the year. Divide business kilometres by total kilometres driven to get your business-use percentage. Apply that percentage to your eligible vehicle expenses (fuel, insurance, repairs). Total them in Chart A of T2125; the business portion flows to a single line, 9281. Depreciation is claimed separately as CCA (Class 10 or 10.1).

The logbook requirement — non-negotiable

CRA requires a logbook to support vehicle expense claims. Without one, your entire vehicle deduction is at risk on audit. Your logbook must record, for every business trip:

Date of the trip
Destination
Business purpose
Kilometres driven

You also need your odometer reading at January 1 and December 31 to establish total kilometres driven for the year. A mileage app (MileIQ, TripLog, etc.) is acceptable — CRA accepts digital records as long as they are accurate and complete.

Note: commuting from your home to a regular fixed office is not a business trip. Travel from home to a client site or job site generally is — especially if your home is your principal place of business.

Calculating your business-use percentage

Example

Total kilometres driven: 22,000 km
Business kilometres (from logbook): 11,000 km
Business-use percentage: 11,000 ÷ 22,000 = 50%
Total vehicle expenses: $8,000
Deductible amount: $8,000 × 50% = $4,000

What expenses qualify

On T2125, motor vehicle costs do not each get their own line. You total them in Chart A, Motor vehicle expenses, apply your business-use percentage, and the allowable amount flows to a single line: 9281, Motor vehicle expenses (not including CCA).

Chart A category	What it includes
Fuel and oil	Gas, diesel, oil changes
Insurance	Vehicle insurance premiums
Licence and registration	Annual plate and registration fees
Maintenance and repairs	Servicing, tires, parts, repairs
Interest	Interest on a loan to buy the vehicle (capped at $350 per month, via Chart B)
Leasing	Lease payments (capped, via Chart C, see below)
Parking and other	Business parking fees; supplementary business insurance

Fuel, insurance, licence, maintenance, interest, and leasing are prorated by your business-use percentage (you claim only the business portion). Business parking fees are added afterward at 100%, since you only ever claim parking incurred for business. Parking tickets and fines are never deductible.

Depreciation — CCA for your vehicle

The cost of purchasing your vehicle is not deducted as an immediate expense. Instead, it is depreciated over time using CCA (capital cost allowance):

Class 10 (30% declining balance): Passenger vehicles that cost at or below the cost cap (see below), so the full cost is depreciable without hitting the limit. Class 10 also covers vehicles that are not "passenger vehicles" under the rules (for example trucks and vans over 3 tonnes), which have no cost cap.
Class 10.1 (30% declining balance): Passenger vehicles costing more than the cost cap. You can only claim CCA on the capped amount: $39,000 before tax for vehicles bought in 2026, $38,000 in 2025, $37,000 in 2024.
Class 54 (enhanced first year): Zero-emission passenger vehicles (EVs, PHEVs). The enhanced first-year CCA is 55% for vehicles available for use in 2026 (75% in 2024 and 2025), then it reverts to the normal 30%. Subject to its own cost cap of $61,000 before tax.

CCA is also subject to your business-use percentage. If you use the vehicle 50% for business, you claim 50% of the CCA calculated. Enter CCA on the CCA schedule at the end of T2125.

Lease payment deduction limit

If you lease rather than own, the monthly deduction is capped. For leases entered into in 2025 or 2026, the monthly lease deduction limit for a passenger vehicle is $1,100 per month before tax (it was $1,050 for 2024). The actual deductible amount is the lesser of two CRA formulas (one based on this $1,100 monthly cap, the other tied to the vehicle's value against the capital-cost cap), and then you apply your business-use percentage. For most freelancers the $1,100 cap is the binding number, but if you lease a high-value vehicle, run both formulas or have an accountant check. This limit exists to prevent excessive deductions on luxury vehicles.

Get Started T2125 Guide

This article is for informational purposes only and does not constitute tax advice. CCA limits are updated periodically — always verify current amounts in CRA's T4002 guide or with a tax professional before filing.