How to Calculate Vehicle Business-Use Percentage (CRA)

Most people who drive for their business know they can claim "part" of the car. Fewer know that the part is not a judgment call. It is one fraction, built from two numbers you either recorded during the year or did not.

That fraction is your business-use percentage. It multiplies your fuel, your insurance, your repairs, your loan interest or lease payments, and your capital cost allowance. Get it wrong by ten points and every one of those lines is wrong by ten points with it.

This page gives the formula, where its two numbers come from, which costs it applies to, and a full year worked through Chart A of the T2125.

The formula

Business kilometres ÷ Total kilometres, for the fiscal period = Business-use percentage

That is the whole rule. The CRA's T2125 page states it as a worked example: a hardware store owner drives her van 27,000 kilometres to earn business income out of 30,000 in total, and deducts 27,000 ÷ 30,000 of her $5,400 of van expenses, which is $4,860.

Chart A on the T2125 asks for exactly those two numbers, in this order:

1. Amount 1: kilometres you drove in the fiscal period that were part of earning business income.
2. Amount 2: total kilometres you drove in the fiscal period.

Amount 1 divided by amount 2 is your percentage. The chart then multiplies it by your total motor vehicle expenses.

Two things are worth noticing about the wording. It is distance, not time: the percentage is not the share of days the car was available for work or the share of hours you spent working. And it is the fiscal period, not a sample month or your busiest quarter. (The one CRA-sanctioned way to project a year from a sample is the simplified logbook, which has its own formula and its own test, covered in the base-year rule.)

Where the two numbers come from

Total kilometres come from the odometer. The CRA asks you to record the odometer reading of each vehicle at the start and end of the fiscal period. The end reading minus the start reading is amount 2. It is a subtraction of two readings, not a sum of trips, and a missed January reading is the hardest number to reconstruct. The habit is covered in odometer readings at the start and end of the year.

Business kilometres come from the logbook. For each business trip, the CRA asks for the date, the destination, the purpose and the distance. The sum of those distances is amount 1. The full list of what a log has to hold is in what a CRA vehicle logbook must contain.

The two sources check each other. Business kilometres can never exceed the odometer's total, and a reviewer who sees a log of 22,000 business kilometres beside odometer readings 20,000 apart knows the log is wrong without reading a single trip. A log of business trips with no odometer readings gives you a numerator and no denominator.

Which trips belong in amount 1 is its own question. The biggest single trap is the drive between home and your regular place of business, which is personal even when you are self-employed unless your home is the base of your business. That rule is worked through in commuting vs business driving, and the wider question of what makes a trip a business trip is in what counts as a business trip.

What the percentage multiplies, and what it does not

Chart A lists the costs that go into the pool the percentage is applied to:

Chart A amount	Cost	Treatment
3	Fuel and oil	× business-use %
4	Interest on money borrowed to buy the vehicle (limited by Chart B for a passenger vehicle)	× business-use %
5	Insurance	× business-use %
6	Licence and registration	× business-use %
7	Maintenance and repairs	× business-use %
8	Leasing (limited by Chart C for a passenger vehicle)	× business-use %
9	Electricity for zero-emission vehicles	× business-use %
14	Business parking fees	Deducted in full
15	Supplementary business insurance	Deducted in full

Amounts 3 to 11 are added up to amount 12, and amount 12 is multiplied by amount 1 ÷ amount 2 to give amount 13. Business parking and supplementary business insurance are then added after the multiplication, on their own lines. The CRA's guidance says it directly: you can deduct the full amount of parking fees related to your business activities and supplementary business insurance for your vehicle.

That distinction is worth money. Parking at a client's building is a business cost from the first dollar, so putting it into the fuel-and-repairs pool and multiplying it by 60% gives away 40% of it for no reason. What does and does not count as business parking, along with tolls and tickets, is in parking, tolls and tickets.

The total of amounts 13 to 15 goes on line 9281 of the T2125. A partner who uses their own car for the partnership's business does the same arithmetic and claims the result on line 9943, as an amount deductible from their share of the partnership's income.

How it flows into CCA

Capital cost allowance on the car is not in Chart A. It is calculated in Area A of the T2125 and entered on line 9936. But the same percentage still applies to it, and the form says so: line 9936 takes the Area A total "minus any personal part".

The CRA's guide T4002 describes two ways to get there:

• The administrative method, for when business use changes from year to year, which it does for anyone whose driving varies. You put the whole cost of the car into the CCA class, let Area A compute the claim, and then multiply that claim by your business-use percentage for the year before entering it on line 9936.
• The regular method, for when business use stays the same from year to year. You split the cost itself into a personal part and a business part when you add the car to the class, and only the business part goes into Area A.

The guide's own example uses the administrative method. Jennifer buys a car for $20,000 in 2025, puts it in Class 10, and Area A gives her a CCA claim of $3,000. She drove 12,000 business kilometres of 18,000 in total, so she enters 12,000 ÷ 18,000 × $3,000 = $2,000 on line 9936.

Whether the car sits in Class 10 or Class 10.1 depends on its cost. For a passenger vehicle bought in 2026 the Class 10.1 ceiling is $39,000 before tax, and a car above it goes into a class of its own, capped at that amount plus the sales tax on it. The ceiling caps the cost; the business-use percentage then applies to the CCA calculated on the capped cost. The classes, the first-year rules and the ceilings for earlier years are in the CCA guide. An overstated percentage overstates the CCA too.

A worked year

Aisha is a self-employed interior designer with a December 31 year-end. She owns one car, bought used in 2024 for less than the Class 10.1 ceiling, with a car loan. Her home is not the base of her business: she rents a small studio, so the drive between home and the studio is personal.

Her 2026 records:

Record	Figure
Odometer, January 1, 2026	48,200 km
Odometer, December 31, 2026	70,200 km
Total kilometres (amount 2)	22,000 km
Business kilometres from the logbook (amount 1)	13,200 km
Business-use percentage	13,200 ÷ 22,000 = 60%

Her 2026 costs, entered in Chart A:

Cost	Amount
Fuel and oil	$3,100
Interest on the car loan	$1,400
Insurance	$2,000
Licence and registration	$150
Maintenance and repairs	$1,150
Total (amount 12)	$7,800
Business use part: $7,800 × 60% (amount 13)	$4,680
Business parking at client sites (amount 14)	$260
Supplementary business insurance (amount 15)	$120
Allowable motor vehicle expenses, line 9281	$5,060

Her interest needs no trimming: she bought the car after 2023, so Chart B caps available interest at $350 ÷ 30 × 365 days, which is $4,258.33, well above the $1,400 she paid.

Her CCA is whatever Area A computes for her Class 10 pool, multiplied by the same 60%, on line 9936.

Three ways the same year goes wrong

Take Aisha's year and change one habit at a time. Only the percentage moves.

Version	Business-use %	Amount 13	Difference from the correct claim
Correct: logbook and odometer	60%	$4,680	None
Studio commute logged as business (2,200 km)	15,400 ÷ 22,000 = 70%	$5,460	$780 overstated
Percentage guessed at "about 80%"	80%	$6,240	$1,560 overstated

Each overstatement also carries through to her CCA on line 9936, because the same percentage multiplies it.

A guessed percentage. The CRA's position is that, to get the full benefit of your claim, you keep a record of total kilometres and business kilometres for each vehicle. A round number with no log behind it is not a percentage, it is an estimate, and it gives a reviewer nothing to accept. If it is disallowed, you are left without the records to argue for the figure you actually drove. If the year is already over and you have nothing, reconstructing a lost mileage log covers what can still be rebuilt from records made at the time.

Counting the commute. Home to the studio and back looks like work, happens every working day, and is personal.

Using the per-kilometre rate instead. The per-kilometre allowance rate for 2026 is 73 cents for the first 5,000 kilometres and 67 cents after that. On Aisha's 13,200 business kilometres it would produce 5,000 × $0.73 + 8,200 × $0.67 = $3,650 + $5,494 = $9,144. That is not a deduction she can take in place of her Chart A figure. The rate in section 7306 of the Income Tax Regulations is the ceiling on an allowance a payer deducts for paying someone for the use of their car, and a sole proprietor has nobody paying them one. The CRA's bulletin on vehicle expenses for the self-employed says it in one line: a claim calculated on a cents-per-kilometre basis is not acceptable. Who can use the rate is in the CRA mileage rate for 2026.

A car bought or sold partway through the year

The CRA asks for one more thing when a car changes: if you change vehicles during the fiscal period, record the dates of the changes and the odometer readings when you buy, sell or trade. And if you use more than one vehicle, it asks for a separate record for each, and for each vehicle's expenses to be calculated separately.

So a mid-year change gives you two percentages, not one. Each car's numerator is its own business kilometres, each denominator runs between its own two odometer readings, and each percentage multiplies only that car's costs.

Say Aisha had traded cars on June 30, 2026 instead:

	Old car (Jan 1 to Jun 30)	New car (Jul 1 to Dec 31)
Odometer at start	150,000 km (Jan 1)	20 km (on purchase)
Odometer at end	158,000 km (on sale)	9,020 km (Dec 31)
Total kilometres	8,000 km	9,000 km
Business kilometres	4,000 km	6,300 km
Business-use percentage	50%	70%

The old car's fuel and repairs from January to June are multiplied by 50%; the new car's from July to December by 70%. Averaging them gives an answer neither record supports.

The capital side has its own rules for a partial year, and three of them are worth knowing:

• CCA is not cut by the number of days you owned the car. The only day-count proration in the CCA rules (Regulation 1100(3)) applies when the fiscal period itself is shorter than twelve months, which is why the first year of a business can be prorated. A car bought in July instead gets the first-year rules that apply to its class, set out in the CCA guide.
• Interest is capped by days. For a passenger vehicle, Chart B limits available interest to the monthly amount ÷ 30 × the number of days in the fiscal period for which interest was payable, so a loan that started on July 1 carries only those days.
• Selling a Class 10.1 car. Recapture and terminal loss do not apply to a Class 10.1 passenger vehicle (other than one designated as immediate expensing property). If you owned it at the end of the previous year, Regulation 1100(2.5) lets you claim half the CCA you could have claimed had you kept it. A car sold out of Class 10 can produce recapture or a terminal loss, and if you used it partly for personal driving you calculate only the allowable business part of it.

Running two cars at once, rather than one after the other, is the same principle applied side by side, and is covered in two vehicles for business.

Two businesses, one car

If you run two separate businesses, the CRA asks for a separate T2125 for each. Each form has its own Chart A, and each Chart A asks for the kilometres driven to earn that business's income over the car's total kilometres.

Say one car drives 20,000 kilometres in 2026: 6,000 for a photography business, 4,000 for a separate delivery business, and 10,000 personal. The car's Chart A costs total $6,000.

	Kilometres	Share of total	Share of $6,000
Photography (its own T2125)	6,000	30%	$1,800
Delivery (its own T2125)	4,000	20%	$1,200
Personal	10,000	50%	Not deductible
Car total	20,000	100%	$6,000

The three shares add up to the whole car, and no kilometre appears on two forms. That is the check.

One trip needs care. The CRA's bulletin on vehicle expenses for the self-employed says that travelling from a place where one business is carried on to a place where an entirely different business is carried on is not travel in the course of either business. The drive from a photo shoot to the first delivery pickup of the day goes in the personal column, not in either business's numerator.

FAQ

How do I calculate the business-use percentage of my vehicle? Divide the kilometres you drove to earn business income in the fiscal period by the total kilometres the car was driven in the same period. Business kilometres come from your logbook; total kilometres come from the odometer readings at the start and end of the period. That is amounts 1 and 2 of Chart A on the T2125.

Does the business-use percentage apply to CCA? Yes. Line 9936 takes the CCA calculated in Area A minus any personal part. Under the administrative method, which suits a percentage that changes from year to year, you multiply the Area A claim by your business-use percentage; the CRA's example turns a $3,000 claim into $2,000 at 12,000 business kilometres of 18,000.

Is parking multiplied by the business-use percentage? Not business parking. The CRA lets you deduct the full amount of parking fees related to your business activities, and Chart A puts them on their own line, added after the percentage is applied. Supplementary business insurance is treated the same way.

Can I use the percentage of days I work instead of kilometres? Not on Chart A. The chart asks for kilometres driven to earn business income and total kilometres driven. The CRA's bulletin on self-employed vehicle expenses also says that a vehicle used infrequently for business is apportioned on distance alone, even though it is available at all times for business, so a car on call every weekday that drives 3,000 business kilometres of 20,000 is at 15%.

Do I need a new percentage every year? Yes. Each fiscal period has its own amounts 1 and 2. The one exception is the CRA's simplified logbook, which lets you project a later year from a three-month sample once you have kept a full base year, subject to a ten-point test.

Claimable Drive, our mileage logbook, in beta for iPhone, records drives in the background, lets you swipe each one business or personal, keeps the start and end odometer readings, and works out the business-use percentage from those swipes.

Sources

1. CRA, Calculating motor vehicle expenses, the proration, the worked example, and parking and supplementary business insurance deducted in full.
2. CRA, Motor vehicle expenses (not including CCA), the business part of vehicle expenses and line 9943 for a partner's own vehicle.
3. CRA, Motor vehicle records, the logbook fields, the odometer readings, and a separate record for each vehicle.
4. CRA Form T2125, Statement of Business or Professional Activities, Chart A (amounts 1 to 16), Chart B (available interest), and line 9936 (Area A minus any personal part).
5. CRA Guide T4002, Self-employed Business, Professional, Commission, Farming, and Fishing Income, line 9281, motor vehicle records, a separate form for each business, Class 10 and 10.1, and "Personal use of property" (the regular and administrative methods and the Jennifer example).
6. Interpretation Bulletin IT-521R, Motor Vehicle Expenses Claimed by Self-Employed Individuals, archived, paragraphs 3, 6, 8 and 25.
7. Income Tax Regulations, section 1100, subsections 1100(2.5) and 1100(3).
8. Income Tax Regulations, section 7307, the passenger vehicle cost and interest ceilings.
9. Department of Finance Canada, Government Announces the 2026 Automobile Deduction Limits and Expense Benefit Rates for Businesses, January 14, 2026, the 2026 Class 10.1 ceiling ($39,000 for 2026), interest limit and allowance rates.
10. Income Tax Regulations, section 7306, the per-kilometre amount, for the payer's limit in paragraph 18(1)(r) of the Act.