Is Commuting Deductible in Canada? The CRA Line, Explained

The most common way a mileage log overstates business use is not a made-up trip. It is a real trip, driven for work, that the CRA does not count as business driving: the drive from home to the place you work.

Being self-employed does not change that on its own. The CRA's position is that travel between your home and your place of business is personal, the same as an employee's commute, unless your home is the base of your business operations. That exception is real, and it is where most of the value in this topic lives. It also has a condition attached that a lot of people skip.

This page states the rule the way the CRA states it, sorts the common trips into business and personal, and works three ordinary days through it so you can see what it does to your percentage.

Why the commute matters more than any other trip

Your vehicle claim on the T2125 is your actual vehicle costs (fuel, insurance, repairs, interest, capital cost allowance) multiplied by your business-use percentage: business kilometres divided by total kilometres for the year. Every commuting kilometre you log as business goes into the top of that fraction.

A commute is also the trip you make most often. One mislabelled trip is noise. The same trip mislabelled two hundred times a year is the single largest number in your log, and it is the first thing a reviewer looks for, because the pattern (the same two addresses, every weekday, at the same hour) is easy to spot.

The rule, in the CRA's words

The CRA's most detailed statement on this for the self-employed is Interpretation Bulletin IT-521R, Motor Vehicle Expenses Claimed by Self-Employed Individuals. It is archived and no longer updated, but the CRA's own motor vehicle records page still lists it as a supporting publication. Paragraph 24 says, in substance:

1. Travel between different premises of the same business is deductible.
2. Travel between your home and your place of business is not, unless it is established that your home is the base of business operations.
3. If you have an office or other fixed place of business elsewhere, your home is normally not the base of business operations.
4. Doing all your work at someone else's place of business does not necessarily make that place your base.
5. Your home can be the base even if no room in it is set aside solely for the business.

Underneath that sits the Income Tax Act itself. Paragraph 18(1)(a) allows an expense only to the extent it was incurred to earn income from the business, and paragraph 18(1)(h) disallows personal or living expenses. The commute is the textbook personal expense: you have to get to work whatever work you do.

Paragraph 25 adds one more line worth knowing. Driving from a place where you carry on one business to a place where you carry on an entirely different business is not travel in the course of either business.

Is your home the base of your business?

This is the question that decides your first and last trip of every day, and it is a question of fact, not a box you tick. IT-521R gives three examples of homes that may be the base:

• A specialist in anaesthesia who does all the office work of the practice at home, takes emergency calls there, sees every patient at one or more hospitals, and has no office at the hospital or anywhere else.
• An independent real estate agent who has an office at home, has no business accommodation elsewhere, and serves clients at their homes or at the properties.
• A plumber, electrician or painter whose office is at home, where all the supplies are kept, who has no other place of business, and who does the work wherever the contract requires.

The common thread: the business is run from the home, and there is no other fixed place of business. The bulletin's appendix works the anaesthetist example through. She practises at one hospital, drives there and back from home, and because her home is her base, those trips are business driving, not commuting.

That last point is the one people miss in both directions. Going to the same place every day does not by itself make a trip a commute. And having a home office does not by itself make every trip from home business. What decides it is whether the home is where the business is actually run, and whether you have another fixed place of business that the CRA would treat as your real base.

If you rent a studio, a shop, a yard or a desk that you actually work from, expect the CRA to treat that as your place of business, and the drive between it and home as personal.

Trip by trip

Trip	Home is the base of the business	You have a fixed place of business elsewhere
Home to your studio, shop or office	Not applicable	Personal (commuting)
Studio, shop or office back home at night	Not applicable	Personal
Home to a client, customer or job site	Business	Fact-dependent (see below)
Between two clients or two job sites	Business	Business
Your place of business to a client, supplier or site	Business	Business
To a supplier to pick up materials for a job	Business	Business
Between two premises of the same business	Business	Business
From one business to an entirely different business	Not business for either (IT-521R, paragraph 25)	Not business for either
A detour for groceries, school pickup or the gym	Personal for the extra distance	Personal for the extra distance

The cell marked fact-dependent is a real gap, not a hedge. IT-521R speaks directly to home and place of business, and to travel between premises. It does not directly address a driver who has a shop across town but leaves home and goes straight to a job site. Treat that as unsettled: record where the day began and why, keep the trip's purpose specific, and if it is a large share of your driving, ask an accountant rather than assuming the favourable answer.

Worked example one: an electrician working from home

Marc is a self-employed electrician. His office is a corner of his basement, his stock lives in his garage, and he has no shop or yard anywhere else. That is very close to the bulletin's own plumber, electrician or painter example.

One Tuesday:

Leg	Distance	Treatment
Home to the electrical supplier	9 km	Business
Supplier to job site A	14 km	Business
Job site A to job site B	6 km	Business
Job site B to home	17 km	Business
Total	46 km	46 km business

The first and last legs count because home is the base of Marc's business. Everything in between counts because it is travel between the places the work is done.

Now suppose Marc rents a small unit in an industrial park and keeps his van and stock there. The same day, starting and ending at home, becomes:

Leg	Distance	Treatment
Home to his unit	11 km	Personal
Unit to supplier to site A to site B to unit	38 km	Business
Unit to home	11 km	Personal
Total	60 km	38 km business

Renting the unit did not make Marc's work any less real. It moved his base, and with it the line between his commute and his business driving.

Worked example two: a realtor, with and without a brokerage desk

Priya is a realtor. Whether her home is her base depends almost entirely on one fact: does she have business accommodation somewhere else?

If she works from a home office and has no desk at the brokerage, she fits the bulletin's independent real estate agent example. A day of showings that starts and ends at home is business from the moment she leaves the driveway.

If she has a desk at the brokerage she actually works from, the brokerage is normally her place of business. Home to the brokerage and back is personal. Brokerage to showings, showing to showing, and showings back to the brokerage are business. A day that goes straight from home to a morning showing is the fact-dependent case from the table above.

Having an office at the brokerage she rarely uses is exactly the kind of fact a reviewer will ask about, so her log should say where each day actually began.

Worked example three: a consultant with a home office and a rented studio

Daniel is a design consultant. He has a home office where he does his invoicing, and he rents a studio across town where he does the actual design work and meets some clients. Because he has a fixed place of business elsewhere, his home is normally not the base of his business.

His logbook for the year says 15,000 total kilometres and 9,000 business kilometres. Looked at properly, 4,000 of those business kilometres are home to studio and back.

	Logged	Corrected
Total kilometres	15,000	15,000
Business kilometres	9,000	5,000
Business-use percentage	60%	33.3%

That is not a trim at the margin. Daniel's claim for fuel, insurance, repairs, interest and capital cost allowance falls by nearly half, and if it had been filed at 60%, every one of those lines would be restated on review, with interest on the difference.

The home office does not rescue those kilometres. It is where Daniel does his invoicing, not where his business is run from, and the studio is the fixed place of business the bulletin describes.

Mixed trips and personal stops

Most real days are not clean. The principle is the one in paragraph 18(1)(a) of the Act: the expense is deductible to the extent it was incurred to earn income. For driving, that means kilometres.

• A personal stop on a business trip. Studio to a client, then a grocery stop, then back to the studio. The client legs are business. The extra distance the grocery stop added is personal. Log the business legs, not the whole loop.
• A business stop on a personal trip. Dropping a signed contract at a client's office on the way to a family dinner. Only the extra distance the business stop added is business, not the whole drive.
• A business errand that ends at home. If your home is not the base of your business, the last leg home is still personal, even at the end of a day of client visits.

What a reviewer wants to see is the same thing the CRA asks every logbook to hold: the date, the destination, the purpose and the distance of each business trip, plus the odometer reading at the start and end of the year. The full list is in what a CRA-acceptable logbook contains. A trip whose purpose says "work" tells a reviewer nothing. A trip whose purpose names the client or the supplier answers the commuting question on its own.

Parking is treated differently

The CRA lets you deduct the full amount of parking fees related to your business activities, rather than prorating them by your business-use percentage. Parking at a client's building or at a job site falls under that. Parking where you park every day at your own regular place of business is closer to the commute, and is not something to assume is covered.

What this does to your claim

A self-employed driver claims actual vehicle costs at their business-use percentage on the T2125. The per-kilometre rate people search for is the ceiling on what an employer can pay as a tax-free allowance, not a deduction you can claim yourself. So every commuting kilometre that comes out of your log reduces your claim by exactly its share of your real costs, no more and no less. You can see the percentage applied to your own numbers, beside the per-kilometre figure, in the mileage calculator, and the broader picture is in tracking vehicle expenses when you are self-employed.

If you use the CRA's simplified logbook, the stakes are higher still. A base year that counted the commute as business sets a percentage that every later sample year is measured against, so one mislabelled year carries forward. How that projection works is in the base-year rule.

FAQ

Is commuting deductible if I am self-employed? No, not on its own. Travel between your home and your place of business is personal unless your home is the base of your business operations. Being self-employed does not change that; where your business is run from does.

Is the first trip of the day from my home office deductible? If your home is genuinely the base of your business and you have no other fixed place of business, yes: the trip from home to a client, a supplier or a job site is business. If you also rent an office, a studio or a shop, your home is normally not the base, and the drive from home to that place is personal.

I drive to the same client's office every day. Is that a commute? It depends on where your base is. The CRA's own example is an anaesthetist who practises at one hospital and whose trips between home and that hospital count as business, because her home is her base and she has no office anywhere else. But the CRA also says that doing all your work at someone else's place of business does not by itself make that place your base, and a home office that exists only on paper will not carry the argument. This one is fact-dependent.

Do I need a separate room for my home to be the base? No. IT-521R says your home can be the base of business operations even if no room is set aside solely for earning income. The business-use-of-home deduction has its own, stricter conditions; the two questions are separate.

What about a job site I work at for several months? The CRA's bulletin does not set out a separate rule for temporary work sites for the self-employed. If your home is your base, travel to the site is business. If you have a shop or office elsewhere, travel from there to the site is business, and travel straight from home to the site is the fact-dependent case. Record the pattern honestly and get advice if it is a large share of your year.

Can I deduct parking at my own studio or office? Parking related to your business activities is deductible in full, not prorated. Parking at a client's building clearly qualifies. Daily parking at your own regular place of business sits much closer to the commute, and you should not assume it is covered.

Sources

1. CRA Interpretation Bulletin IT-521R, Motor Vehicle Expenses Claimed by Self-Employed Individuals, archived, paragraphs 24 and 25 (home and place of business, base of business operations, the three examples, travel between different businesses) and the appendix example.
2. CRA, Motor vehicle records, the logbook fields, the odometer requirement, and IT-521R listed as a supporting publication.
3. CRA, Motor vehicle expenses (not including CCA), the business part of vehicle expenses, and parking fees deductible in full.
4. CRA, Calculating motor vehicle expenses, business kilometres over total kilometres applied to actual costs, worked.
5. CRA Guide T4002, Self-employed Business, Professional, Commission, Farming, and Fishing Income, line 9281 and keeping motor vehicle records.
6. Income Tax Act, section 18, paragraphs 18(1)(a) (expenses deductible only to the extent incurred to earn income) and 18(1)(h) (personal or living expenses).