Vehicle expense calculator (T2125 Chart A)
Self-employed Canadians deduct actual vehicle costs multiplied by the share of kilometres driven for business. Enter your kilometres and your costs for the year to see the deductible amount and how it lands on the T2125.
Showing a worked example: 12,000 business km out of 20,000, with typical costs. Change the numbers to see yours.
About $3,852 deductible, at 60% business use.
| Business use: 12,000 of 20,000 km | 60% |
| Operating costs for the year | $6,020 |
| Deductible share (60%) · T2125 line 9281 | $3,612 |
| Business parking and tolls (100%) | $240 |
| Total motor vehicle deduction | $3,852 |
Not included: capital cost allowance (depreciation) on a vehicle you own, which goes on line 9936 and is calculated from the vehicle's cost and class. For passenger vehicles the cost that can be depreciated is capped at $38,000 before tax (2025 limit).
How the CRA wants it done
Add up what the vehicle cost you for the whole year: fuel, insurance, licence, maintenance, loan interest or lease payments. Multiply by the business-use percentage, which is business kilometres divided by total kilometres. That share is your motor vehicle expense on line 9281 of the T2125.
Business parking and tolls are added on top at 100%. Depreciation on a vehicle you own is a separate line (9936, capital cost allowance), with its own ceiling for passenger vehicles.
The per-kilometre rates you may have seen (72 cents and 66 cents) are for employers reimbursing employees. A sole proprietor cannot deduct a flat rate per kilometre; the CRA expects actual costs and a logbook.
What your logbook needs
- Odometer reading at the start and end of the year.
- For each business trip: date, destination, purpose, and kilometres.
- Receipts for every cost you claim, kept six years.
- After one full-year logbook, the CRA accepts a three-month sample each year if it stays within 10 percentage points of the base year.
Questions
Is driving from home to my office business use?
No. Travel between home and a regular place of business is personal. Trips from home to a client's site, or from the office to a client, are business.
What if I use the vehicle for two businesses, or share it with my spouse?
Count only the kilometres for the business you are filing for. Costs are still the whole year's costs for the vehicle; the percentage does the splitting.
Can I claim the GST/HST on vehicle costs?
If you are registered, yes: input tax credits on the business share of fuel, maintenance and the like, on your GST/HST return. Then claim the costs net of that tax on the T2125.
Do I need a separate calculation per vehicle?
Yes. Each vehicle has its own kilometres, costs and percentage. This page handles one vehicle; run it again for a second.
Loonie Logs keeps the logbook and does Chart A for you
Log trips as you drive, keep odometer photos as evidence, scan the gas receipts, and the vehicle worksheet your preparer asks for is ready at year end.
Get the appThis is general information, not tax advice. Your situation may differ; confirm with your tax preparer or the CRA. Source: CRA, Motor vehicle expenses (completing form T2125).