Motor Vehicle Expenses on Your T2125
Your vehicle is likely your biggest deduction — but without a logbook, you can't claim a cent. Learn the rules, limits, and how to maximize your claim.
What You Can (and Can't) Deduct
Know exactly what belongs on Line 9281 — and what the CRA says doesn't qualify.
What Qualifies
- Fuel and oil
- Electricity (EVs)
- Insurance
- Licence and registration
- Maintenance and repairs
- Parking (business, not home)
- Supplementary insurance
- Lease payments (subject to limits)
- Interest on vehicle loan (subject to limits)
Does NOT Qualify
- Personal driving costs
- Commuting from home to regular workplace
- Parking at home
- Car washes for personal use
- Traffic tickets and fines
Rules & Limits
Special CRA rules and percentage limits that apply to motor vehicle expenses.
Special Rules
Logbook Is Mandatory
Heads upYou MUST keep a mileage logbook recording date, destination, purpose, and kilometres for each business trip. Without a logbook, the CRA can deny your entire vehicle claim.
CRA Guide T4002Business-Use Percentage
AdvantageYour deduction is based on the ratio of business kilometres to total kilometres driven in the year. After maintaining a full-year logbook, you may use a 3-month sample in subsequent years (if within 10% of the base year).
2025 Prescribed Limits
Heads upCCA ceiling: $38,000 (regular vehicles), $61,000 (ZEVs). Interest: maximum $350/month. Lease: maximum $1,100/month before tax. Class 10.1 applies to vehicles over $38,000.
Regulation 7307Class 10.1 for Expensive Vehicles
Heads upVehicles costing more than $38,000 go into Class 10.1. Each Class 10.1 vehicle is its own separate class, and you cannot claim a terminal loss when you dispose of it.
Percentage Limits
| Rule | Limit |
|---|---|
| Business-use percentage | Business km / Total km |
| Vehicle loan interest | $350/month max |
| Vehicle lease payments | $1,100/month max (before tax) |
Real-World Examples
See how different professionals use Line 9281 deductions in practice.
Annual Vehicle Costs at 75% Business Use
Used a personal vehicle extensively for property showings, client meetings, and open houses.
$12,000 total × 75% business use
$9,000 (75%)
Work Truck Fuel + Maintenance
Operated a work truck to travel between job sites, haul materials, and visit suppliers.
$8,500 total × 90% business use
$7,650 (90%)
Full Vehicle Costs at 85% Business Use
Used a personal vehicle primarily for rideshare driving through Uber and Lyft.
$10,200 total × 85% business use
$8,670 (85%)
Common Mistakes to Avoid
These errors on Line 9281 can trigger a CRA review — here's how to get it right.
Not keeping a mileage logbook
Without a logbook, the CRA can deny your entire vehicle claim. Record the date, destination, business purpose, and kilometres for every business trip. Use ScanForTax or a logbook app to make this easy.
Claiming 100% of vehicle costs without business-use calculation
You must calculate your business-use percentage (business km / total km) and apply it to all vehicle expenses. Very few self-employed individuals legitimately use their vehicle 100% for business.
Not knowing about prescribed limits for expensive vehicles
Vehicles over $38,000 have CCA capped at that amount (Class 10.1). Lease payments are capped at $1,100/month and interest at $350/month. Know these limits before purchasing.
Commonly Confused Categories
These categories are often mixed up with Motor Vehicle Expenses. Here's the difference.
Fuel Costs
Vehicle fuel goes on Line 9281 (Motor Vehicle Expenses), NOT on Line 9224. Line 9224 is for fuel costs related to non-vehicle equipment or business property.
Capital Cost Allowance
Vehicle depreciation (CCA) goes to Line 9936 under the appropriate class (10, 10.1, or 54), not on Line 9281. Operating costs go on 9281.
Insurance
Vehicle insurance is part of your motor vehicle expenses on Line 9281, NOT on Line 8690. It gets multiplied by your business-use percentage.
Sample Receipt Walkthrough
See how ScanForTax processes a typical motor vehicle expense.
Petro-Canada
2025-04-05
Ontario
How ScanForTax categorizes this
ScanForTax identifies this Petro-Canada receipt as a motor vehicle expense and categorizes it under Line 9281. The $10.18 HST is recoverable via ITC, proportional to your business-use percentage.
Frequently Asked Questions
Do I really need a logbook?
What is the business-use percentage?
Are there limits for expensive vehicles?
Related Professions
Profession-specific guides that frequently use Motor Vehicle deductions.
Tax Guides by Province
See how tax recovery works for motor vehicle expenses in each province.
Tax deadline is April 30th.
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