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 2024 or 2025, the maximum depreciable cost (CCA cost limit) for a passenger vehicle is $37,000 before HST/GST. If your car cost more, you can only claim CCA on $37,000. The limit is indexed periodically — 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 $37,000 cost cap). Zero-emission passenger vehicles (ZEVs) may qualify for Class 54 with a 100% first-year write-off under the Accelerated Investment Incentive. 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 all eligible vehicle expenses (fuel, insurance, repairs, parking). Enter amounts on T2125 lines 9281–9284. 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

T2125 Line	Expense
9281	Fuel and oil
9282	Insurance
9283	Maintenance and repairs
9284	Other (parking, car washes, licence and registration)
9819	Lease payments (subject to deduction limits — see below)

All of the above are subject to your business-use percentage. You cannot deduct the full amount — only the business portion. 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): Most vehicles where the purchase price is $37,000 or less. No dollar cap on the depreciable cost.
Class 10.1 (30% declining balance): Passenger vehicles costing more than $37,000. You can only claim CCA on a maximum of $37,000 — the cost cap for 2024/2025.
Class 54 (100% first year): Zero-emission passenger vehicles (EVs, PHEVs) acquired after 2018. Subject to its own cost cap ($61,000 for 2024/2025).

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 2024/2025, the monthly lease deduction limit for a passenger vehicle is $1,050 per month (before HST). If your actual lease payment exceeds this, you can only deduct $1,050 × your business-use percentage. 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.