CRA Mileage Rates 2025: Awaiting Updates
The Canada Revenue Agency (CRA) mileage rates for 2025 have not been announced yet. Historically, the CRA releases these rates in December for the upcoming year. Once available, these rates will apply starting January 1, 2025.
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2024 Mileage Rates for Reference
While we wait for the 2025 rates, here’s a reminder of the 2024 rates:
- Up to 5,000 km: 70 cents per km
- After 5,000 km: 64 cents per km
- Northwest Territories, Yukon, Nunavut: Additional 4 cents per km
Given rising fuel prices and operating costs, it’s anticipated that the 2025 rates will increase slightly. Stay tuned for updates.
How Does the CRA Set the Mileage Rate?
The CRA reviews and adjusts mileage rates annually based on factors such as the average costs of vehicle ownership and operation.
- Recent Trends:
- In 2023, the rate increased significantly by 7 cents.
- In 2024, a moderate increase of 2 cents followed.
With fluctuating fuel prices and economic pressures, another adjustment for 2025 is expected.
Who Can Use the 2025 CRA Mileage Rate?
For Employees
If you use your personal vehicle for work-related purposes, your employer can reimburse you using the CRA mileage rate. However, employers are not obligated to follow CRA rates—they may offer a different rate, as long as it is deemed reasonable by the CRA.
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For the Self-Employed or Business Owners
Self-employed individuals cannot directly apply the mileage rate to deduct vehicle costs. Instead, you must:
- Log business driving separately from personal use.
- Claim actual vehicle expenses proportional to business use.
- Use the CRA mileage rate for 2025 to calculate business kilometres in the following year’s tax return.
For Employers
Employers can reimburse employees for work-related kilometres using the CRA mileage rate or an alternative rate. However:
- The rate must be “reasonable” to avoid being classified as a taxable benefit.
- Any unreasonable allowance will be taxed as part of the employee’s income.
Why Tracking Business Kilometres is Essential
Whether you’re self-employed, an employee, or an employer, accurate tracking of kilometres is crucial for compliance with CRA rules.
Options for Tracking Kilometres
- Manual Logs: Writing down trip details is an option but can be time-consuming.
- Mileage Apps: These automate the process, recording trips in real time and generating CRA-compliant reports.
Apps like Driversnote or others can simplify this process, ensuring you don’t miss any business mileage claims.
What’s Next?
While the 2025 CRA mileage rates are still pending, preparing now can save you time and ensure compliance. Bookmark this page for updates in December, and get ready to adjust your reimbursement or deduction strategies for the new year.
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