Checked 15 October 2026. What was checked. How these pages are maintained.
CRA per-kilometre allowance (2026)
Finance Canada sets a reasonable per-kilometre rate each year. For 2026 in the provinces it is 73 cents on the first 5,000 business kilometres and 67 cents after that. Yukon, Northwest Territories, and Nunavut add 4 cents (77¢ then 71¢). An employer allowance at or below that rate, paid only on business kilometres, is often treated as a tax-exempt allowance. A flat monthly car amount usually is not.
These are not the CRA employee travel-directive kilometric rates, which differ by province. Use this page for the income-tax “reasonable allowance” estimate. Keep a log of business vs personal km. Rates change; check the Department of Finance announcement for the year you are filing.
Worked example
8,000 business kilometres in Ontario in 2026: first 5,000 × $0.73 = $3,650, remaining 3,000 × $0.67 = $2,010, total $5,660. In Yukon add 4¢, so $6,000 on the same distances.
This is the tax-exempt “reasonable allowance” rate, not the CRA/NJC staff travel table, which differs by province. A flat $400/month car amount is usually taxable. Keep a log that splits business and personal km.
A log of kilometres, not a monthly car cheque
For 2026 the reasonable allowance in the provinces is 73 cents for the first 5,000 business kilometres and 67 cents after that. Two thousand four hundred business kilometres stay entirely in the first tier: 2,400 × 0.73 = $1,752. Twelve thousand kilometres use both tiers: 5,000 × 0.73 = $3,650, and 7,000 × 0.67 = $4,690, total $8,340. The average on that 12,000 is 69.5 cents, which is not a rate you should type anywhere. The tiers are the rule.
Yukon, the Northwest Territories, and Nunavut add 4 cents, so the tiers are 77 cents and 71 cents. The same 2,400 kilometres in a territory are 2,400 × 0.77 = $1,848. The region box is that 4-cent switch and nothing else. It does not pick a province-by-province rate.
The other CRA table
CRA staff travel rates, the National Joint Council kilometric tables, are quarterly and differ by province. They are not this allowance. This page is the income-tax “reasonable per-kilometre allowance” used when an employer pays an employee for business driving of the employee’s own car. An allowance at or under those rates, paid only for business kilometres, is often tax-exempt. A flat $400 a month is usually taxable even if the dollars look similar, because it is not tied to kilometres. Paying above the prescribed rate can pull the allowance into income. Keep a log that separates business and personal kilometres. The Department of Finance announcement for the year you are filing wins if it disagrees with this page.
The 73 cent and 67 cent rates were read again on 15 October 2026 against the Department of Finance release. The log is the figures check.
Common questions
Does a higher rate become taxable?
If the allowance is more than the prescribed rate, or is not based on kilometres, it may be taxable. Ask a tax preparer.
Can I deduct actual gas instead?
If you receive a reasonable per-km allowance, you generally cannot also deduct the same car costs. Rules differ for commissioned employees and the self-employed.
Is this the same as NJC/CRA staff travel rates?
No. Those quarterly provincial tables are a different program. This page uses the annual tax-exempt allowance rates.