Delivery and rideshare drivers in Canada who are self-employed can deduct the business portion of motor vehicle expenses, calculated from a log of business kilometres and total kilometres, on Form T2125. You cannot deduct the whole cost of a car you also drive to the grocery store. Business parking and supplementary business insurance can be deducted in full. The purchase price of a lasting vehicle is capital cost allowance on the business portion, inside the ceiling Guide T4002 sets for that year, not a one-time write-off.
This is general information, not tax advice. Talk to an accountant if the car is financed, leased, or shared with a job. Kilometre rates that employers use to reimburse employees are not a substitute for your actual expenses. Confirm the logbook rules on the CRA motor vehicle records page for the year you file.
The work sits in food delivery, rideshare driving, grocery shopping, and package courier. GST/HST on passenger fares is a different rule from the vehicle deduction. It is in GST/HST registration.
Can you deduct vehicle costs for delivery or rideshare in Canada?
Yes, if you incur the costs to earn business income and you can support the business portion. The CRA’s motor vehicle expenses page says you deduct expenses to run a motor vehicle you use to earn business income, using Chart A on Form T2125. You keep a record of total kilometres and kilometres driven to earn income. You can deduct the expenses only when they are reasonable and you have receipts.
The CRA’s calculation page uses a hardware-store van as the official example: 27,000 business kilometres divided by 30,000 total kilometres, times $5,400 of operating costs, equals $4,860. Business parking of $40 and supplementary business insurance of $100 are then added in full, for a $5,000 claim in that example. Those numbers are the CRA’s example. They are not a delivery shift in your city. The method is the part to copy: percentage first, then add parking and supplementary business insurance that are fully business.
| Cost | How the CRA treats it | What you need |
|---|---|---|
| Fuel, oil, insurance, licence, repairs, eligible interest | Business kilometres ÷ total kilometres | Receipts and a log |
| Leasing | Business percentage, with limits in T4002 | The lease and the year’s ceiling |
| Capital cost of the car | CCA on the business portion, subject to the class and the ceiling | Purchase records until the car is long gone from the return |
| Business parking | Full amount, in the CRA example | Receipts |
| Supplementary business insurance | Full amount, in the CRA example | The policy invoice |
| Tickets and most fines | Not deductible | The T2125 expenses section says most fines are out |
More than one vehicle means more than one log. The records page says to calculate each vehicle separately.
Driving to a regular place of employment can be personal. A self-employed driver whose base is home, and who drives to pickups, is in a different pattern than an employee commuting. The CRA still wants the purpose of each business trip. “I was online” is a purpose you can write down. A trip to visit family with the app closed is not.
What belongs in a kilometre logbook in Canada?
The best evidence, on the CRA records page, is an accurate logbook for the entire year showing, for each business trip, the destination, the reason, and the distance. For each trip record the date, destination, purpose, and kilometres. Record the odometer at the start and end of the fiscal period.
You can keep a full logbook for one complete year to establish a base year. The same page describes a simplified logbook for later years, and it sets conditions. This guide does not restate those conditions from memory. If you want the shorter log after a base year, read the live page and follow it. A simplified log that misses a condition is a reconstruction, and reconstructions are how vehicle claims fall apart.
Step 1: Read the odometer on January 1 and December 31
Total kilometres are end minus start, plus any note if the odometer was replaced. Business kilometres cannot exceed total kilometres.
Step 2: Log the business trips the day you drive them
Date, from where to where, why, and kilometres. For delivery, the why can be the platform and the zone. For rideshare, it can be the shift. You do not need a passenger’s name. You need a purpose that was earning income.
Step 3: Keep fuel and repair receipts with the log
The percentage is useless without the dollars it multiplies. A bank total labelled “gas” for the household is weaker than receipts.
A paper notebook still works. So does an app, if you can produce the same fields. The CRA’s standard is the content, not the brand of the app.
How do you turn kilometres into a business percentage?
Business use is business kilometres divided by total kilometres. Multiply that percentage by the eligible operating costs. Add fully deductible business parking and supplementary business insurance after that, the way the CRA’s example does.
The CRA’s own example, restated. 27,000 ÷ 30,000 = 0.90. Times $5,400 = $4,860. Plus $40 parking and $100 supplementary insurance = $5,000. Use your kilometres. A delivery year that is 4,000 business kilometres out of 16,000 total is 25%, not 90%.
Do not use a cents-per-kilometre allowance the CRA publishes for employers as if it were your deduction. Those rates are for reasonable allowances paid to employees. Self-employed drivers claim actual expenses times the percentage. If a platform pays you a per-trip amount, that amount is income, not a vehicle deduction.
Interest on a car loan and lease payments have limits, especially for passenger vehicles. Guide T4002 states the limits for the year. This guide does not print a lease ceiling or a CCA ceiling, because they are yearly. A luxury vehicle does not become fully deductible because you delivered dinners in it.
If you are a GST/HST registrant, do not include the tax in the expense when you claimed an input tax credit. If you are not a registrant, the GST/HST you paid on fuel and repairs is part of the cost. Ride-sharing drivers are registrants from the first fare. Food-delivery drivers often are not, until the $30,000 test says otherwise. That split is the registration guide, not a reason to deduct the car twice.
Which vehicle costs are easy to overclaim?
The full purchase in year one. The full insurance on a family car. Kilometres from a guess in April. A second car that never did a shift. Commuting kilometres to a day job, added to the delivery log because the car was the same car. Fines. Personal washes that you cannot tie to the business.
Capital cost allowance on the business percentage is legitimate. CCA on 100% of a car that is 30% business is not. The class and the half-year or accelerated rules, whichever the year’s chapter 4 uses, come from T4002. Passenger vehicles above the ceiling use a restricted cost. Zero-emission vehicles have their own classes. Look them up if that is the car you bought. Do not assume a delivery hatchback and a zero-emission passenger vehicle share a line.
Quebec drivers still use the federal vehicle rules on the federal return and the Quebec rules on the Quebec return. Insurance through the SAAQ is not an Ontario endorsement. The deduction percentage is still kilometres. The rideshare guide covers provincial insurance at a high level and tells you to call the insurer. This page does not quote a premium.
What does an illustrative delivery log look like in Canada?
Illustrative example. Suppose your odometer shows 18,000 kilometres in the year, and your log shows 6,000 of those were delivery shifts. Business use is 6,000 ÷ 18,000 = 0.333, or 33.3%. Suppose fuel is $2,400, insurance is $1,800, maintenance is $300, and licence is $120. Operating total $4,620. Business portion is 0.333 × $4,620 = $1,538.46. Suppose business parking meters while you wait for orders total $75, and you have no supplementary business policy. The sketch claim for operating costs and parking is $1,538.46 + $75 = $1,613.46. CCA, if the car qualifies, is calculated on 33.3% of the allowable capital cost, using the year’s chart, and is not included in that $1,613.46. These dollars are assumptions. The CRA van example is the official one. This one is only a delivery shape.
| Item | Full year, assumed | In the sketch |
|---|---|---|
| Business km | 6,000 | |
| Total km | 18,000 | 33.3% |
| Fuel, insurance, maintenance, licence | $4,620 | $1,538.46 |
| Business parking | $75 | $75 |
| Operating claim | $1,613.46 | |
| CCA | Year’s chart | Not in the operating line |
A rideshare shift uses the same percentage. The GST/HST on the fare is not a vehicle expense. If a fare is $30 GST-included in a 5% province, the tax slice is $30 × 5/105, about $1.43, and that slice is remitted, not deducted as fuel. In a 13% HST province the fraction is 13/113. Confirm the rate on the GST/HST calculator.
A log you will actually fill is the tool. A mileage logbook TODO-AFFILIATE is a paper option with the columns the CRA asks for: date, destination, purpose, kilometres. An app is fine if it records the same facts. The book does not know which trips were personal.
Fuel receipts belong with the log. FreshBooks TODO-AFFILIATE can hold the receipt photos for the year so the $2,400 in a sketch is a real total on your return, not a memory. It does not calculate a reasonable claim by itself.
The percentage you cannot spend is still a tax problem. KOHO TODO-AFFILIATE can hold the set-aside from delivery payouts, separate from fuel money. The set-aside guide is how much tax to set aside.
How is rideshare GST/HST different from the vehicle claim?
The vehicle claim is income tax. GST/HST registration for commercial ride-sharing is mandatory from the day you start carrying passengers, even under $30,000. The CRA taxi and ride-sharing page says that. Food delivery uses the small-supplier test unless you also carry passengers. You can have a vehicle deduction on a delivery car and still be unregistered for GST/HST. You can be registered for ride-sharing and still deduct only the business kilometres.
If mandatory registration applies only to the rides, input tax credits follow that registration. Do not claim credits on an unrelated hustle the registration does not cover. Memorandum material on this is summarized in the registration guide. When combined taxable supplies cross $30,000, the small-supplier protection for the other work can end.
What should you keep with the log?
Keep the log, the odometer readings, and the receipts for six years from the end of the last year they relate to. If you claim CCA, keep the purchase agreement until six years after the last year the car can affect a return. That longer capital-property period is in Information Circular IC78-10, linked from record keeping. A platform mileage summary can support your log. It does not replace a log that shows personal trips, because the platform never saw them. Total kilometres include the personal ones. If you omit them, the percentage is too high.
Which driving guides sit next to the logbook?
Food delivery and rideshare are the two tax patterns. Grocery shopping and package courier use the same log if you drive. Startup costs for the car are discussed in rideshare startup costs and food delivery startup costs. Reporting net income is Form T2125. Other expenses, including the meals limit, are side hustle expenses.
What are the common questions?
Can I deduct the whole car if I deliver food in Canada?
No. Deduct the business percentage of eligible operating costs, which is business kilometres divided by total kilometres, plus business parking and supplementary business insurance in the way the CRA example adds them. Capital cost allowance is also only on the business portion, and passenger vehicles have a yearly cost ceiling in Guide T4002. This is not tax advice.
What has to be in a vehicle logbook for the CRA?
For each business trip, the date, destination, purpose, and kilometres. Also record the odometer at the start and end of the year, and total kilometres. The CRA calls a full-year log the best evidence. A simplified log is allowed only in later years if you meet the conditions on the motor vehicle records page.
Can I use the CRA's cents-per-kilometre rate instead of receipts?
Those reasonable per-kilometre amounts are for allowances employers pay employees. Self-employed delivery and rideshare drivers claim actual expenses times the business percentage, with receipts. Do not swap in the allowance rate as your deduction.
Does rideshare GST/HST change how I deduct the car?
Registration is mandatory from the first passenger fare, which is separate from the kilometre math. If you claimed an input tax credit on fuel or repairs, do not deduct that GST/HST again on the T2125. Food delivery follows the $30,000 small-supplier test unless you also carry passengers.
Are parking tickets deductible?
Most fines and penalties are not deductible. A parking fee you pay at a pickup can be a business parking cost, which the CRA example deducts in full. A ticket is not that fee. This is not tax advice.
What if I started the log in March?
Write down the odometer as soon as you start, and keep every business trip after that. Kilometres you invent for January and February are not a log. If the year is incomplete, ask a preparer how to support the claim you still have evidence for, and do not inflate the percentage.
Which sources support this guide?
The rules, rates, and platform requirements in this guide are checked against these primary sources. Retail price ranges are labelled as ranges to verify locally, and they are not quotes.
- Motor vehicle expenses — Canada Revenue Agency
- Calculating motor vehicle expenses — Canada Revenue Agency
- Motor vehicle records — Canada Revenue Agency
- Form T2125, Statement of Business or Professional Activities — Canada Revenue Agency
- Guide T4002, Self-employed Business, Professional, Commission, Farming, and Fishing Income — Canada Revenue Agency
- Claiming capital cost allowance (CCA) — Canada Revenue Agency
- GST/HST for taxi operators and commercial ride-sharing drivers — Canada Revenue Agency
- GST/HST calculator (and rates) — Canada Revenue Agency