Claiming that your vehicle is "about 70% business" isn't enough. If CRA asks, you need records showing where that percentage came from.

What the CRA Actually Wants in the Log

Vehicle expenses work on a business-use percentage, the same idea behind a home office deduction. The CRA wants that percentage backed by a log recording the date, destination, business purpose, and kilometres driven for every business trip. No log, no support — a claimed percentage with nothing behind it is exactly the kind of thing that gets reduced or thrown out entirely if the CRA asks questions. A simple running log, paper or app, kept consistently, is what turns "I think I used my truck for work about 70% of the time" into an actual, defensible deduction.

A mileage log isn't the whole picture, either — the actual costs behind the deduction (fuel, insurance, repairs, and so on) still need receipts to support them. A perfect log doesn't do much good if there's nothing backing up the dollar amounts it's being applied to.

What the Business-Use Percentage Applies To

Once that percentage is established, it's used to calculate the business portion of many shared vehicle costs, including fuel, insurance, maintenance and repairs, licence and registration fees, and depreciation through CCA (Capital Cost Allowance — the tax term for deducting a vehicle's cost gradually over several years instead of all at once) for the vehicle itself. A few costs, like business-related parking, work outside that percentage and can be claimed in full instead. Leasing instead of owning changes how the deduction works — see RSB's guide on leasing vs. buying a business vehicle for that side of it.

You Don't Have to Log Every Trip Forever

That full year of daily logging isn't permanent, either. After one complete 12-month "base year" of full logging, the CRA allows a simplified method — a shorter 3-month sample log in each following year, instead of another full 12 months.

But the simplified method isn't just "keep a shorter log and reuse last year's number." There's an actual calculation involved: take the business-use percentage from this year's 3-month sample, divide it by the business-use percentage from that same 3-month window in the base year, then multiply by the base year's full annual percentage. That result is the calculated business-use percentage for the current year — and it only holds up if it lands within 10 percentage points of the base year's annual figure.

An example, using the CRA's own numbers: a base year showed 49% annual business use, with April–June at 46%. The following year's April–June sample comes in at 51%. Run the formula — (51% ÷ 46%) × 49% — and you land at 54%, well within 10 points of the 49% base year. That produces a calculated business-use percentage of 54% for the year, on the strength of just three months of logging.

If the calculated number ends up more than 10 points off, the simplified method stops working and a fresh full-year base year needs to be established.

What Belongs in Every Log Entry

Four things, every business trip: date, destination, business purpose, and kilometres driven. A log that's just a string of destinations and distances with no purpose noted is much weaker evidence than one that clearly ties each trip to actual business activity.

You also need the vehicle's total kilometres for the year, because your business-use percentage is business kilometres divided by total kilometres driven. CRA asks you to record the odometer reading at the beginning and end of the fiscal period. You don't need a detailed entry for every personal trip, but those personal kilometres still form part of the total.

And don't forget the odometer. If you change vehicles during the year, record the date and the odometer reading when the vehicle is bought, sold, or traded — that's part of what CRA expects to see too.

GPS mileage apps can work well here, but only if the business purpose gets noted for each trip. Automatic distance tracking captures the "how far," not the "why" — and the why is half of what the CRA is actually asking for.

Reimbursing an employee for using their own vehicle is a different situation with its own rules — RSB's guide to CRA per-kilometre allowance rates covers that side.

FAQ

Does the business have to own the vehicle to claim vehicle costs?
Not necessarily. A sole proprietor can claim the business-use portion of eligible costs for a personally owned vehicle used to earn business income. A corporation paying or reimbursing an employee or shareholder for use of a personally owned vehicle is a different situation with its own rules. The mileage log still matters either way, but who claims the expense depends on who owns the vehicle and who actually paid the costs.

What happens if no log was kept and the CRA asks for one?
The claimed deduction can be reduced or disallowed. A log reconstructed after the fact from calendar entries or other records is possible, but it's far weaker evidence than one kept in real time.

Does the regular commute to a fixed workplace count as business kilometres?
No — that's personal use, even for the business owner. Business kilometres are the trips beyond the regular commute: client visits, supply runs, travel between job sites.

Does the log need to be digital, or is paper still fine?
Either works, as long as it's complete and legible. A consistently kept paper log holds up just as well as an app — what matters is that all the required details show up for every trip.

Follow the system. File with confidence.