The Two Odometer Readings the CRA Wants Every Year

Most people who keep a mileage log think of it as a list of business trips. That list is only half of what the CRA asks for. The other half is two numbers you read off your dashboard: the odometer at the start of your fiscal period and the odometer at the end of it.

They are easy to forget because nothing prompts you to take them. No client asks for them, no receipt prints them, and on the day the year turns over you are rarely thinking about your car. But without them your log has no total, and a log with no total cannot produce a business-use percentage the CRA will accept.

This page explains why the two readings matter, when exactly to take them, what changes when your fiscal year is not the calendar year or you change cars partway through, and what to do if you missed one.

Why the total comes from the odometer

Your vehicle claim on the T2125 is your actual vehicle costs (fuel, insurance, repairs, interest, capital cost allowance and the rest) multiplied by your business-use percentage. The CRA's Guide T4002 shows the arithmetic in exactly that shape: business kilometres divided by total kilometres, multiplied by the vehicle's expenses. Chart A of the T2125 asks for both inputs on their own lines, the kilometres you drove in the fiscal period to earn business income and the total kilometres you drove in the fiscal period.

Your trip log gives you the top of that fraction. The bottom has to come from somewhere else, because personal driving is not logged trip by trip. The CRA's motor vehicle records page says where: "Record the odometer reading of each vehicle at the start and end of the fiscal period." The difference between those two readings is every kilometre the car travelled, business and personal together.

This is also why adding up your logged trips and calling the result "total" does not work. A log that only records business trips will always add up to 100% business, which is the one figure an auditor is certain is wrong. Personal kilometres do not need a line each, but they must be inside the total, and the odometer is the only thing that puts them there.

For what the rest of a compliant log has to contain, field by field, see what a CRA-acceptable logbook actually contains. For how the percentage itself is worked out and applied, see how to calculate your business-use percentage.

When to take them

The CRA's wording is the fiscal period, not the calendar year. For most self-employed people those are the same thing. Guide T4002 says self-employed individuals generally have to use a December 31 year end, and paragraph 249.1(1)(b) of the Income Tax Act is the rule behind it: an individual's business fiscal period cannot end after the end of the calendar year it began in.

So for a December 31 year end:

• Opening reading: January 1, or as close to it as you can get before the first drive of the year.
• Closing reading: December 31, after the last drive of the year.

In practice these are one photo. A reading taken on the evening of December 31, with no driving between it and the morning, is both the closing reading of one year and the opening reading of the next. Take it once, file it under both years.

A fiscal year that is not the calendar year

Subsection 249.1(4) lets an eligible individual elect out of the December 31 rule and keep a different year end. Guide T4002 describes this as another method of reporting business income, and anyone using it reconciles their income to the calendar year on Form T1139. Whether you qualify, and whether it is worth it, is a separate question. What matters here is the consequence for your log.

If your fiscal period runs, say, April 1 to March 31, your two readings are on April 1 and March 31. The T2125 asks for the total kilometres driven in the fiscal period, and the CRA's records page asks for the reading at the start and end of the fiscal period. A January 1 photo does nothing for you, and taking January 1 by habit leaves you with a total that covers the wrong twelve months.

The same logic applies to a short fiscal period. Guide T4002 notes a fiscal period can be shorter than 12 months when a business starts or stops. If you started your business on June 10, your first fiscal period begins June 10, and so does your opening reading. If you are in that position, starting a mileage log partway through the year covers the rest of it.

Changing cars partway through the year

The CRA's records page has a second odometer requirement that people discover only when they need it: "If you change motor vehicles during the fiscal period, record the dates of the changes and the odometer reading when you buy, sell, or trade the vehicle."

The reason is the per-vehicle rule. If you use more than one vehicle for your business, the CRA wants a separate record for each, showing its total and business kilometres and its own costs, and each vehicle's expenses calculated separately. When you sell one car in June and buy another the same week, each car has a partial year, and each partial year needs its own opening and closing reading:

Vehicle	Opening reading	Closing reading	What the readings are
The car you sold	January 1 (or fiscal start)	Date of sale or trade	Start of fiscal period, then disposal
The car you bought	Date of purchase	December 31 (or fiscal end)	Acquisition, then end of fiscal period

The sale-day reading usually appears on the bill of sale or trade-in paperwork, and the purchase-day reading on the dealer's documents or the private sale agreement. Take your own photo anyway, on the day, because it is yours and it is dated.

Worked example: two cars, one year

A self-employed photographer with a December 31 year end trades her old car on June 20 and drives the new one off the lot the same day.

	Old car	New car
Opening reading	102,300 (Jan 1)	12 (Jun 20, purchase)
Closing reading	110,850 (Jun 20, trade-in)	11,212 (Dec 31)
Total kilometres	8,550	11,200
Business kilometres from the log	5,130	7,280
Business use	5,130 ÷ 8,550 = 60.0%	7,280 ÷ 11,200 = 65.0%

Each percentage is applied to that car's own costs for the part of the year she had it. There is no single blended percentage for the year, and the two figures only exist because she has four readings. Missing the trade-in reading would have left both halves of the year without a total. How costs, interest and capital cost allowance split across two cars is its own subject, covered in claiming two vehicles for business.

How to capture a reading

The CRA specifies the information, not the medium. A number written in a notebook is a record. A photograph is a better one, for three reasons:

• It is dated by the phone. The file carries the date and time it was taken, which is the whole point of the reading.
• It is hard to argue with. A photo of the instrument cluster shows the actual figure, rather than your transcription of it.
• It takes seconds. Which is the only reason it gets done at all on December 31.

A few details make the photo worth more:

1. Photograph the total odometer, not a trip meter. Many dashboards cycle between trip A, trip B and the total. Make sure the photo shows the one that never resets.
2. Get the car into the frame if you have more than one. A second photo of the plate or the VIN plate on the same day ties the reading to the vehicle, which matters once the CRA's per-vehicle rule applies to you.
3. Write the reading into the log as well. The photo proves it; the log uses it. Put the opening reading, closing reading and their dates at the top of each vehicle's record for the year.
4. Keep it with the log. The readings are part of the records that support your claim, so they are kept as long as the log is, which is six years from the end of the tax year they relate to, and longer for a base-year log under the simplified logbook rule.

Claimable Drive, in beta for iPhone, keeps your car's odometer readings and works out the business-use percentage from the drives you swipe business or personal.

If you missed a reading

This happens constantly, and it is recoverable. You do not need the reading on the exact day. You need a dated reading on each side of that day, and you can work out the missing one between them.

The documents that usually carry a dated odometer reading are the ones your car already generates: oil change and service invoices, tire changes, provincial inspections, dealer warranty and recall work, and purchase or sale paperwork. Find the nearest one before the missing date and the nearest one after it, and assume the kilometres between them were driven evenly across the days between them. That is interpolation.

It is an estimate, and you should treat it as one. The closer together the two documents are, the tighter the estimate. Write a short note beside the reading saying it was interpolated and from which two documents, and keep both documents with the log. If the gap is bigger than one reading, a whole year with no log at all, rebuilding a lost mileage log covers the full method and what the Tax Court has done with reconstructed logs.

Worked example: a missed January 1

A self-employed electrician with a December 31 year end photographed his odometer on December 31, 2026 at 88,960 km. He did not take a reading on January 1, 2026. He has two service invoices on either side of it.

Record	Date	Odometer
Winter tire change	November 22, 2025	61,480
Oil change	January 14, 2026	64,130

Step 1, the daily rate between the two records. From November 22, 2025 to January 14, 2026 is 53 days. The odometer moved 64,130 − 61,480 = 2,650 km. That is 2,650 ÷ 53 = 50 km a day.

Step 2, place January 1 between them. January 1, 2026 is 40 days after November 22, 2025 (8 more days in November, 31 in December, then the 1st). So the estimated reading is 61,480 + (50 × 40) = 63,480.

Step 3, the year's total. 88,960 − 63,480 = 25,480 km for 2026.

Step 4, business use. His log shows 15,900 business kilometres for 2026, so business use is 15,900 ÷ 25,480 = 62.4%.

It is worth seeing what the shortcut would have done. Plenty of people skip the interpolation and just use whichever invoice is nearest:

Opening reading used	Total kilometres	Business use
Tire change, November 22 (too early)	27,480	57.9%
Interpolated, January 1	25,480	62.4%
Oil change, January 14 (too late)	24,830	64.0%

Taking the November reading counts about 2,000 kilometres of 2025 driving as 2026 driving, which understates business use. Taking the January 14 reading drops two weeks of 2026 driving, which overstates it. Neither error is large, and that is exactly the danger: a percentage a couple of points too high looks entirely plausible until a reviewer lines your invoices up against your log and finds the reading you used is dated January 14. The interpolated figure is the one you can explain.

Two cautions. First, the method assumes steady driving between the two records, so a road trip or a month the car sat in the driveway inside the gap will skew it; if you know that happened, say so in your note. Second, service invoices are typed in by someone else and are sometimes wrong. If one reading looks out of line with the invoices around it, do not rely on it.

FAQ

Does the CRA require an odometer reading on January 1 exactly? The CRA asks for the reading at the start and end of the fiscal period. For most self-employed people that is January 1 and December 31, because individuals generally have to use a December 31 year end. A reading taken late on December 31 works as both the closing reading of one year and the opening reading of the next.

My fiscal year ends March 31. When do I take the readings? On the first and last day of your fiscal period, so April 1 and March 31 in that case. The T2125 asks for total kilometres driven in the fiscal period, not the calendar year. A non-December year end for an individual depends on an election under subsection 249.1(4) of the Income Tax Act, with income reconciled on Form T1139.

Why can't I just add up my trips to get total kilometres? Because your log records business trips, not personal ones, so the sum is your business kilometres and nothing more. Dividing that by itself gives 100%. The total has to include personal driving, and the odometer readings are the only record that captures it.

I forgot to take my odometer reading. What do I do? Find the nearest dated reading before and after the missing date, usually on service, tire or inspection invoices, and interpolate between them on a per-day basis. Note beside the figure that it was interpolated and from which documents, and keep both documents with the log.

Do I need a reading when I sell or trade my car? Yes. The CRA asks you to record the date of the change and the odometer reading when you buy, sell or trade a vehicle during the fiscal period. The sold car's reading closes its part of the year, and the new car's reading opens its part. Without them neither car has a total.

Is a photo of the dashboard enough? The CRA specifies the information, not the format. A photo of the total odometer, dated by your phone, is a record made at the time and shows the actual figure rather than your copy of it. Write the number into your log too, and keep the photo with the log for as long as you keep the log.

Does this matter if I claim the CRA per-kilometre rate? If you are self-employed, you do not claim a per-kilometre rate. You claim actual vehicle costs multiplied by your business-use percentage, and the per-kilometre figure the CRA publishes is a ceiling on an allowance a payer pays, not a deduction for your own driving. The distinction is explained in who can use the CRA mileage rate.

Sources

1. CRA, Motor vehicle records, the four trip fields, the odometer reading at the start and end of the fiscal period, the dates and readings when a vehicle is bought, sold or traded, and the separate record per vehicle.
2. CRA Guide T4002, Self-employed Business, Professional, Commission, Farming, and Fishing Income, the fiscal period (generally December 31 for self-employed individuals, shorter when a business starts or stops, Form T1139 for another year end), and business kilometres divided by total kilometres times vehicle expenses.
3. CRA Form T2125, Statement of Business or Professional Activities, Chart A, which asks for business kilometres and total kilometres driven in the fiscal period.
4. Income Tax Act, section 249.1, paragraph (1)(b), an individual's fiscal period does not end after the end of the calendar year it began in, and subsection (4), the election out of that rule.
5. Interpretation Bulletin IT-521R, Motor Vehicle Expenses Claimed by Self-Employed Individuals, archived, paragraph 8: a record of total distance and business distance for the year, and a cents-per-kilometre claim is not acceptable.