How to Claim Mileage on Your CRA Return
How you claim depends on whether you are self-employed or an employee. Self-employed Canadians use form T2125 and report on their personal T1 return. Employees use form T777 and need a signed T2200 from the employer.
Self-employed: T2125
Vehicle expenses go on T2125 part 4 (motor vehicle expenses). Report the total business kilometres for the year and the total kilometres driven (business + personal). Apply the CRA per-km method by multiplying business km by the appropriate tier rate, or list actual expenses separately and pro-rate by the business-use percentage.
If you use the actual-expenses method, attach a separate T777 schedule for capital cost allowance on the vehicle. The per-km method does not need CCA paperwork.
Employee: T777 + T2200
T777 is the form employees use to claim work-related expenses, including motor vehicle. The CRA requires a signed T2200 (Declaration of Conditions of Employment) from your employer confirming that you were required to use a personal vehicle for work and that the employer's reimbursement was insufficient or absent.
Without a T2200, the T777 claim cannot be supported. The CRA can deny the deduction on review even if the underlying mileage is real.
What if you got reimbursed by your employer?
If the reimbursement was at or above the CRA reasonable rate, you cannot also deduct on T777. The reimbursement is non-taxable and the deduction is closed.
If the reimbursement was below the CRA rate, you can claim the difference on T777. Document both numbers (employer's per-km rate × kilometres versus CRA rate × kilometres) and claim the gap.
FAQ
Can I claim mileage if my employer fully reimburses me?
Generally no, if the reimbursement is at or above the CRA reasonable rate. The reimbursement is non-taxable income and the deduction is closed. If the reimbursement is below the CRA rate, you can claim the difference.
Do I need a T2200 every year?
Yes. Each tax year requires its own signed T2200. The form covers the conditions of employment for that year only; if your role changes, the T2200 needs to be re-signed.
What if my employer refuses to sign a T2200?
Without a T2200, you cannot support the T777 claim. The remedies are administrative (escalate within the company, request through HR, document the refusal) before tax-filing remedies.
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