What Counts as Business Mileage? The CRA Test, Trip by Trip

Most people who keep a mileage log never ask what a business trip is. They assume it is obvious: if the drive had something to do with work, it goes in the log. Then the edge cases pile up. The run to the bank to deposit a client's cheque. The post office. The hardware store where the job's screws and the kitchen's light bulbs ended up in the same bag. The networking breakfast. The client meeting with a grocery stop on the way home.

The CRA does not publish a list that sorts every errand, and none of the CRA guidance on motor vehicle expenses cited below mentions a trip to the bank. What exists is a test, set out in the Income Tax Act, and a small amount of CRA guidance on how it applies to driving. This page states the test, runs the common errands through it, shows how to split a trip that was partly personal, and shows what a purpose entry needs to say so the trip defends itself.

The test in the Act

Two paragraphs of section 18 of the Income Tax Act do the work.

Paragraph 18(1)(a) says no deduction is allowed for an outlay or expense "except to the extent that it was made or incurred by the taxpayer for the purpose of gaining or producing income from the business." Driving is an expense like any other. A kilometre is business when you drove it for the purpose of earning income from your business.

Paragraph 18(1)(h) says no deduction is allowed for "personal or living expenses of the taxpayer," with an exception for travel expenses incurred while away from home in the course of carrying on the business.

Two more pieces sit beside them. Section 67 allows an otherwise deductible expense only to the extent it is reasonable in the circumstances. And the CRA's Interpretation Bulletin IT-521R, on motor vehicle expenses claimed by self-employed individuals, applies the Act to driving: the deductible part of your vehicle costs is normally the share of the year's distance driven to earn business income (paragraph 3).

Notice the words "to the extent". The Act does not ask whether a trip was all business or all personal. It asks how much of it was driven for the business. That is what lets you split a trip, and it is also what stops you from logging a whole drive as business because one stop on it was.

So the question for any trip is not "was this related to work?" It is: did I make this drive, or this part of this drive, to earn income from my business? If the honest answer is "I would have made it anyway, for myself," the kilometres are personal.

Why a single trip matters

Your vehicle claim on the T2125 is your actual vehicle costs (fuel, insurance, maintenance and repairs, licence and registration, interest or lease payments, and capital cost allowance) multiplied by your business-use percentage, which is business kilometres divided by total kilometres for the year. Every trip you classify moves the top of that fraction. The per-kilometre rate people search for is not an alternative: it is the ceiling on an allowance a payer pays for the use of someone else's car, not a deduction for your own driving, as the 2026 rate guide explains. IT-521R says the same thing from the other side: a self-employed claim calculated on a cents-per-kilometre basis is not acceptable (paragraph 8).

Classification also matters one trip at a time. IT-521R paragraph 7 says accident repairs are deductible in full if the vehicle was being used for business at the time of the accident, and not at all if it was being used for personal purposes. Whether the trip you were on was business decides that question on its own.

Commuting, in two sentences

Driving between your home and your regular place of business is personal, the same as an employee's commute, unless your home is the base of your business operations and you have no other fixed place of business. Where that line falls, with the CRA's own examples and three worked days, is in commuting versus business driving.

Everything below assumes you have already placed that line. A trip that is personal because it is a commute stays personal whatever errand you attach to it.

The common errands, run through the test

The table sorts errands by what the Act and the CRA guidance support. Where the guidance cited here does not speak to the errand, the table says the answer depends on the purpose, because that is the true state of it.

Trip	How the test sorts it	What decides it
To a client or customer for a meeting, a job or a showing	Business	Made to serve a customer, 18(1)(a). Whether the first leg from home counts depends on where your base is (see commuting, above).
Between two clients, two job sites, or two premises of the same business	Business	IT-521R paragraph 24: travel between different premises of the same business is deductible.
To a supplier for materials or stock for the business	Business	Made to buy inputs for the business, 18(1)(a).
A delivery to a customer, or a pickup of work to be done	Business	Delivering what you sold is part of earning the income.
A site visit, an inspection, a quote	Business	Made to win or perform work.
To the post office to ship orders or mail business documents	Depends on the purpose	Shipping a sale or sending an invoice is income-earning. Collecting your personal mail is not.
To the bank	Depends on the purpose	The CRA guidance cited here does not classify bank trips. Depositing business receipts or meeting about a business loan points to a business purpose. Personal banking is personal.
To a networking event, a trade show, an industry meeting	Depends on the purpose	An event you attend to find clients or referrals for your business points to a business purpose. A social evening that happens to include people from your field does not.
A store where you buy business and personal items together	Depends on why you went	If you went for the business items, business. If you went for yourself and picked up a business item while there, personal.
From one of your businesses to an entirely different business	Not business for either	IT-521R paragraph 25: travel from a place where one business is carried on to a place where an entirely different business is carried on is not in the course of either.
Lunch, the gym, groceries, school pickup, appointments of your own	Personal	Personal or living expenses, 18(1)(h).

Three observations about the rows marked "depends".

First, "depends" does not mean "anything goes". It means the purpose is the fact that decides the answer, so the purpose has to be written down. A trip to the bank logged as "bank" is unclassifiable. A trip logged as "deposit client cheques, invoices 1041 and 1042" is a business trip on its face.

Second, the test looks at why the trip was made, not at what happened during it. Buying one business item on a personal shopping trip does not turn the trip into business driving, for the same reason that a personal errand on a business trip does not turn the business trip personal. The next section covers how to count the kilometres in both cases.

Third, section 67 applies to all of it: a deduction is allowed only to the extent it is reasonable. A run of trips with no paper behind them (supply runs with no supply receipts, client visits with no client) invites the question. Receipts, invoices and calendar entries that line up with the trips are what answers it.

Trips with a personal detour

Most real days are neither all business nor all personal. The Act does not prescribe a method for splitting a trip. The method that follows most directly from "to the extent" in 18(1)(a) is to count as business the kilometres the business required, and to treat as personal the extra kilometres the personal part added.

In practice there are two shapes.

• A business trip with a personal stop. Log the business route. The additional distance the personal stop added is personal.
• A personal trip with a business stop. The trip is personal. The additional distance the business stop added is business, and only that.

The mistake to avoid is the whole-loop entry: logging an entire drive as business because it included a business stop, or leaving out genuine business kilometres because the day also included a personal errand.

Worked example one: a day with a detour

Leila is a self-employed photographer. She edits and invoices from home, keeps her equipment there, and has no studio or office anywhere else, so her home is the base of her business and trips that start and end there can be business trips. (If she rented a studio, the first and last legs would follow the commuting rules instead.)

On a Thursday she drives to a client's office for a product shoot, then to a camera shop to collect a lens that was in for repair, then home. On the way home she stops for groceries. The direct route from the camera shop to her home is 12 km. Going by the grocery store, it is 5 km to the store and 10 km from the store to home.

Leg	Distance	Business	Personal
Home to client's office (product shoot)	18 km	18 km
Client's office to camera shop (collect repaired lens)	7 km	7 km
Camera shop to grocery store to home	15 km	12 km	3 km
Total	40 km	37 km	3 km

The last leg is where the split happens. The business required 12 km to get Leila home from the camera shop. She drove 15 (5 plus 10). The 3 extra kilometres are the grocery detour, and they are personal.

Check: 18 + 7 + 12 = 37 business, and 37 + 3 = 40, which matches the day's total.

Worked example two: a personal trip with a business stop

On Saturday Leila drives to her sister's house, 40 km each way. On the way she stops at the post office to ship a client's print order, which takes her 2 km off her route in each direction, 4 km in all.

	Logged as a business trip	Split correctly
Kilometres driven	84 km	84 km
Business kilometres	84 km	4 km
Personal kilometres	0 km	80 km

The visit to her sister is the reason for the drive. Shipping the order is a business purpose, but it only required the 4 km of detour. Logging the whole 84 km as business would add 80 personal kilometres to the top of her business-use fraction, from one Saturday.

Suppose she did that on 20 Saturdays in a year, and her true figures are 10,000 business kilometres out of 20,000 total. The 20 Saturdays add 1,600 personal kilometres (80 × 20) to the business column.

	Correct	With 20 whole-loop Saturdays
Total kilometres	20,000	20,000
Business kilometres	10,000	11,600
Business-use percentage	50%	58%

Eight points of every vehicle cost for the year, claimed for trips that were personal. A review would restate the claim at 50%.

What a good purpose entry looks like

The CRA's motor vehicle records page asks for four things for each business trip: the date, the destination, the purpose and the number of kilometres, plus an odometer reading for each vehicle at the start and end of the fiscal period. The full field list is in what a CRA-acceptable logbook contains.

Of the four, the purpose is the one that carries the classification. The date, the destination and the distance say that you drove. The purpose says why, and "why" is the whole test in 18(1)(a). A good purpose entry answers three questions a stranger would ask: who or what was the trip for, what did you do there, and how does it connect to earning income.

Weak entry	Why it fails	Strong entry
Work	Says nothing a reviewer can check	Product shoot, Norrow Tea, spring catalogue
Meeting	Which meeting, with whom, about what	Quote meeting, Patel basement reno, measure and price
Bank	Business or personal banking	Deposit client cheques, invoices 1041 and 1042
Post office	Shipping or collecting personal mail	Ship print order 311 to client
Supplies	For which job, and was that the reason for the trip	Lumber and fasteners, Okafor deck job
Networking	Social or business	Chamber of commerce breakfast, two follow-up quotes requested

A strong entry also lets you match the trip to paper you already have: the invoice number matches an invoice, the job name matches a quote, the store matches a receipt dated the same day. Trips that tie out to other records are the ones that hold up without argument.

Two habits make this cheap. Write the purpose the same day, while you still remember it. And for a trip you repeat, use the same wording each time, so the pattern reads as a pattern.

Where the answer is genuinely fact-dependent

Some trips do not resolve cleanly, and it is better to say so than to pretend otherwise.

• Starting the day at a job site when you have a shop elsewhere. IT-521R does not directly address a driver with a fixed place of business who drives straight from home to a site. The commuting guide treats this as unsettled, and so does this one.
• Trips that serve two purposes equally. When the business and personal reasons are both real and neither required extra distance, the Act's "to the extent" still applies, but there is no CRA formula for apportioning a single leg. Record both purposes honestly, and if it is a large share of your driving, get advice rather than assuming the favourable answer.

What this means for your percentage

The classification of each trip rolls up into one number, your business-use percentage for the year, and that number is multiplied into every vehicle cost you claim. How that percentage is built from the log, and what to do when you have more than one vehicle, is covered in calculating your business-use percentage. You can see a percentage applied to your own costs, beside the per-kilometre figure, in the mileage calculator.

Claimable Drive records your drives in the background, you swipe each drive business or personal, and it works out your business-use percentage from those swipes.

Parking is the one cost that does not follow the percentage. The CRA lets you deduct parking fees related to your business activities in full, so a parking receipt at a client's building is a business cost regardless of the vehicle's percentage. Parking, tolls and tickets have their own guide.

FAQ

Is driving to the bank business mileage? The CRA guidance cited here does not classify trips to the bank as a category. Apply the Act's test: was the trip made to earn income from your business? Depositing business receipts or meeting your bank about a business loan points to a business purpose. Personal banking is personal. Write the reason in the purpose field, because "bank" alone does not tell a reviewer which it was.

I stopped for groceries on the way home from a client. Do I lose the whole trip? No. The business route is still business. Only the extra distance the grocery stop added is personal. Split the leg as in the first worked example above.

Does a trip count as business if I only drive for business once in a while? Yes, and the CRA's guide T4002 says occasional business use can be claimed on a per-trip basis. Its example is a daycare operator paying for fuel and parking to take the children on an excursion. If you use the vehicle regularly for both, you claim a share of total costs based on your kilometres instead.

What about a trip out of town for a business conference? The drive to a conference that relates to your business is made to earn income from it. Paragraph 18(1)(h) also carves travel expenses incurred while away from home in the course of the business out of "personal or living expenses". A holiday added onto the trip is personal, and the same detour logic applies to the driving. Meals and lodging on the trip are a separate question from the driving.

I run two unrelated businesses. Is driving between them a business trip? No. IT-521R paragraph 25 says travel 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 carrying on either business.

Sources

1. Income Tax Act, section 18, paragraphs 18(1)(a) (expenses deductible only to the extent incurred to earn income from the business) and 18(1)(h) (personal or living expenses, other than travel expenses while away from home in the course of the business).
2. Income Tax Act, section 67, deductions limited to the extent reasonable in the circumstances.
3. CRA Interpretation Bulletin IT-521R, Motor Vehicle Expenses Claimed by Self-Employed Individuals, archived, paragraphs 3 (apportionment by distance), 7 (accident repairs), 8 (records, and cents-per-kilometre claims not acceptable), 24 (home, place of business, travel between premises) and 25 (travel between different businesses).
4. CRA, Motor vehicle records, the date, destination, purpose and distance for each business trip, and odometer readings at the start and end of the fiscal period.
5. CRA, Calculating motor vehicle expenses, business kilometres over total kilometres applied to actual costs, and business parking deductible in full.
6. CRA Guide T4002, Chapter 3, Expenses, line 9281, occasional business use claimed per trip, and keeping motor vehicle records.