Contractor Vehicle Expenses in Ontario: Mileage Log Basics (and CRA Red Flags)
Published July 24, 2026 · By Vijay Goswami
For contractors in Ontario, vehicle expenses are one of the biggest deductions—and one of the most commonly reviewed areas by CRA. The problem isn't that vehicle claims are “wrong.” It's that they're often unsupported.
This post gives you a simple mileage log system and the red flags to avoid.
Want your contractor bookkeeping set up so vehicle claims are clean and audit-safe? Book a call:
Book a call →The rule: you claim the business-use portion
Most contractors use a vehicle for both personal and business.
So the claim is usually based on:
Business-use % = Business km ÷ Total km
Then you apply that % to eligible vehicle costs.
No mileage log = weak business-use %.
What a mileage log needs (simple)
A clean mileage log should include:
- Date
- Start location
- Destination
- Business purpose (job name / client / supplier run)
- Odometer start and end (or km driven)
- Total km for the trip
You can do this in a spreadsheet, notebook, or app—just be consistent.
What receipts to keep (vehicle expense checklist)
Keep receipts/invoices for:
- Fuel
- Maintenance and repairs
- Insurance
- License/registration
- Interest/lease payments (if applicable)
- Parking (business-related)
- Tolls (business-related)
Also keep:
- Purchase/lease documents (if applicable)
- Year-end odometer reading (or start/end of year)
CRA red flags for contractor vehicle claims
These patterns get attention fast:
- High vehicle expense claims with no mileage log
- “100% business use” claims (rarely realistic)
- Fuel receipts that don't match the km driven
- Claiming commuting as business travel (home-to-regular-workplace is usually not)
- Vehicle expenses claimed but vehicle is also heavily personal
- No consistent method year to year
What counts as “business driving” (contractor examples)
Common business trips include:
- Driving to job sites
- Supplier runs (Home Depot, lumber yard, etc.)
- Meeting clients for quotes
- Trips to pick up tools/materials
- Driving to accountant/bookkeeper (business purpose)
But: commuting rules can be tricky depending on your work pattern. Keep your log clear.
Simple mileage log routine (takes 2 minutes)
If you want this to be easy:
- Keep a note app or spreadsheet template
- Log trips daily (or at least weekly)
- Take a photo of your odometer at the start of each month (backup habit)
This prevents “rebuilding a log” later (which is risky).
Quick contractor vehicle checklist (monthly)
Once a month:
- Total business km vs total km
- Receipts saved and organized
- Any personal transactions flagged
- Reconcile vehicle-related spending in your books
FAQs
1) Can I claim vehicle expenses without a mileage log?
You can try, but it's weak support. A mileage log is the cleanest way to defend the claim.
2) Can I claim meals and fuel together on the same receipt?
Separate receipts are better. Mixed receipts create confusion.
3) What if I forgot to track mileage earlier this year?
Start now and be consistent going forward. Don't guess months of mileage.
4) Do I need an app?
No. A simple spreadsheet works if you keep it updated.
Want vehicle claims done cleanly (without CRA stress)?
If you want a simple contractor bookkeeping system that keeps vehicle claims clean and audit-safe, book a call.
Book a Call with Vijay