2019 CRA Mileage Rate. Canada Automobile Allowance Rate.

The Canada Revenue Agency, also referred to as CRA and the Canadian equivalent to the IRS, allows residents to deduct business mileage on a cost per kilometre basis. This is known as the CRA Mileage Rate or the Automobile Allowance Rate, and just as the U.S. Standard Mileage Rate, it is not a fixed value and can vary year to year.

What is the 2019 CRA CAR Allowance Rate ?

The CRA Mileage Rate has increased in 2019:

  • 58¢ per kilometre for the first 5,000 kilometres driven
  • 52¢ per kilometre driven after that

CRA Rules for Deducting Business Mileage

Whether you are an employee or self-employed, the CRA has rules in place which must be followed for your business mileage to be deducted on your tax return, and they are pretty strict on these rules, so let’s review.

  • You’re required as part of your job to work away from the office regularly. This is a safeguard put in place to make sure you’re not deducting your office commute. For instance, if you live in the suburbs and work in the city, and you’re not required to drive for your business, you cannot claim mileage deductions for this drive. This will be the same when the 2019 CRA Mileage Rates. 
  • You pay out-of-pocket for work-related travel. Your employer would need to sign a T2200 form confirming that you pay for your own business travel. If your employer reimburses you for your travel expenses, then you cannot your deduct your business mileage. Even worse, if the reimbursement (or allowance) is above what the CRA deems acceptable, then your employer would be required to report the extra amount as the employee’s (your) income.

Keep CRA Compliant in 2019 with a Mileage Tracker

The CRA recommends that every person or business attempting to deduct their allowance keep a detailed and accurate log of the business mileage they rack up. This is important, as there have been instances where the CRA has declined mileage logs due to incomplete or inaccurate information.

By using a mileage tracker app, such as MileCatcher, you can rest assured that all your business mileage will be automatically recorded as you’re driving, and you’ll be able to download detailed reports when it’s time to prepare your taxes.

While taxes are never fun, MileCatcher makes it less troublesome for businesses and employees. Take comfort in knowing that you’ll have detailed records and reports of all your deductible expenses, and even better, you’ll save a ton of time and have fewer headaches for the  when tax time rolls around.

Frederick W. Daily, J.D, LL. M (tax)

Frederick W. Daily, J.D, LL. M (tax)

Fred Daily is a tax attorney with over four decades of experience in the tax field. He has given tax programs for CPAs, Enrolled Agents and even the IRS. Fred has been quoted in the New York Times, Wall Street Journal, and has appeared on CBS, NBC, Fox, NPR news features and ABC’s Good Morning America. He is an author of books on taxes and his website, taxattorneydaily.com features a wealth of tax tips for minimizing taxes and dealing with IRS issues.