How to Keep a Vehicle Mileage Log for Tax Deductions in Canada—A Free Template Is Here

Anamika Biswas
6 days ago
3 min read

Track your business and personal vehicle use with a vehicle mileage log for accurate tax deductions.

Why a Vehicle Mileage Log Is a Must—It’s CRA-Required

If you’re a Canadian corporate director, small business owner, or self-employed, the Canada Revenue Agency (CRA) requires a complete and accurate logbook to support your vehicle expense claims. Without it, your deductions may be denied or reassessed.

A full-year logbook that tracks each trip’s date, destination, purpose, and kilometers driven is your most credible proof.

What Is a Vehicle Mileage Log?

A Vehicle Mileage Log (sometimes called a logbook) is a record you maintain—on paper, in a spreadsheet, or through an app—that tracks all your driving. It separates business use from personal use and ensures your claims are backed by proper documentation.

This record is not optional—it is essential for tax purposes (CRA in Canada, IRS in the U.S.) and serves as your evidence during an audit.

What to Record — Make It CRA-Compliant

A reliable logbook should include:

Every business trip: date, destination, purpose, and km driven
Odometer reads: at the beginning and end of your fiscal year
Vehicle changes: dates and odometer readings when buying, selling, or swapping vehicles
Separate logs for each vehicle you use for both business and personal travel
Receipts: fuel, maintenance, insurance, licenses, and registration—every claim needs proof

This level of detail keeps your claims strong and audit-ready.

How to Keep a Mileage Log

You can maintain a mileage log in several ways:

📝 Paper Logbook – The traditional method with pen and paper.
📊 Spreadsheet Template – Easy to update and calculate totals automatically.
📱 Mobile Apps – GPS tracking apps that automate most of the work.

Two Ways CRA Lets You Track Business Use

Detailed (Full-Year) Method—Track every business trip all year long.
Simplified (Sample) Method—After a solid 12-month base year, track just a 3-month representative period each year if your business use stays within ±10% of the base year.

CRA Example:

Base year: Q2 business use = 46%, annual = 49%
Sample year (same quarter): business use = 51%
Projected annual use = (51 ÷ 46) × 49 ≈ 54% (acceptable, within ±10%).

Business vs. Personal Use — What Counts?

Only business-related kilometres are deductible. CRA makes it clear that personal driving cannot be claimed, even if you use the same vehicle for both. Here are some examples:

Examples of Business, Personal, and Mixed Vehicle Use — Know what you can deduct, what you can’t, and how to split kilometres correctly.

👉 Rule of thumb: if the trip is taken only because of your business, it’s deductible. If it’s personal (even partially), that part isn’t deductible.

💡 Our tip: Always separate personal from business driving in your logbook. This will save you time (and stress) if CRA ever reviews your claim.

Keep It Together — Retention Rules

The CRA requires that both your logbook and expense receipts be kept for six years after the end of the tax year they apply to.

Bottom Line — Why This Matters

At Cloud Accounting & Tax Services Inc., we help business owners like you stay organized and compliant. A well-maintained vehicle mileage logbook: