The Department of Finance Canada has not announced the 2027 automobile allowance limits. Until it does, the 2026 limits govern kilometres driven in 2026: 73 cents per kilometre for the first 5,000 kilometres in the provinces and 67 cents after that, with 77 and 71 cents in the territories. Recent releases landed between mid-December and mid-January: the 2025 limits on 30 December 2024 and the 2026 limits on 14 January 2026.
Status
Not announced yet
Expected mid-December 2026 to mid-January 2027
Current published rate
73 cents per kilometre
Provinces · 2026 calendar year, for the first 5,000 kilometres
67 cents per kilometre after 5,000 km · territories 77 cents per kilometre and 71 cents per kilometre
The 2026 limits apply to allowances paid for kilometres driven in 2026, counted from January 1. They are the amount an employer can pay tax-free to an employee using a personal vehicle for business, and they are also the deduction ceiling for that allowance — which is why payroll and accounting systems both carry the figure.
73 cents per kilometre
First 5,000 kilometres
Source: Government of Canada 2026 automobile allowance rates
77 cents per kilometre
First 5,000 kilometres
Source: Government of Canada 2026 automobile allowance rates
Yukon, the Northwest Territories, and Nunavut use the higher territory figures. The 5,000-kilometre tier counts per year, per employee.
Canada is the one country here where the announcement can arrive after the year it applies to has started: the 2026 limits were published on 14 January 2026, two weeks into the calendar year they govern. The four releases below span Dec. 16 to Jan. 14.
Set the provincial allowance limit at 73c/km for the first 5,000 km, 67c after that · Department of Finance Canada
Set the provincial allowance limit at 72c/km for the first 5,000 km, 66c after that · Department of Finance Canada
Set the provincial allowance limit at 68c/km for the first 5,000 km, 62c after that · Department of Finance Canada
Set the provincial allowance limit at 61c/km for the first 5,000 km, 55c after that · Department of Finance Canada
The per-kilometre limits are set as part of the annual automobile deduction limits, which are indexed rather than derived from a per-mile cost study. The same release carries the other numbers that touch vehicle costs.
Annual limits
Finance Canada adjusts the allowance limits for a calendar year and states the change in cents, so movements have been small and one-directional in recent years rather than tied to fuel prices.
Four numbers, not two
Territories carry limits four cents higher at each tier, so a payroll setup that ignores the split under-reimburses northern drivers.
Leasing, CCA, benefit rate
Deductible leasing costs, the capital cost allowance ceiling for Class 10.1 vehicles, and the prescribed rate for the personal portion of employer-paid vehicle costs are all announced together with the per-kilometre limits.
The per-kilometre limit is a ceiling for tax-free allowances, not a mandatory rate, and it is not the same thing as the deduction rules for a business that owns the vehicle.
Up to the limit is tax-free
An allowance at or below the published limit does not need to be reported as a taxable benefit; anything above it is taxable pay.
Actual costs, per-kilometre rate as a benchmark
A self-employed claim is built from real vehicle costs and business-use kilometres. The published rate is a useful planning figure, not a substitute for the expense records.
Per year, per employee
It resets on January 1 with the limits, so a driver's November total does not carry into the new year.
A different number for government travel
The CRA also publishes quarterly kilometric rates for its own travel directive. Those are not the tax-exempt allowance limits this page tracks.
Plan for an announcement that may arrive after January 1: the work below is what makes a retroactive rate change cheap instead of painful.
Every claim needs the distance plus the business purpose, and a year-end total for the vehicle — the same standard the CRA expects for expense claims.
Kilometer log templatePayroll has to know when a driver crosses the tier, since the rate drops for the rest of the calendar year.
Four rates exist, not two. A single provincial figure silently under-pays anyone in Yukon, the Northwest Territories, or Nunavut.
If 2027 repeats the 2026 timing, allowances paid in early January would be settled at the old rate and then adjusted once the new limit is published.
A written policy that quotes the published limit keeps the two from drifting apart at the start of the year.
Mileage reimbursement policy templateA reasonable per-kilometre allowance with records behind it is what keeps the payment outside taxable benefits; a flat vehicle allowance is treated differently.
CRA automobile allowance taxableNot announced. The limits for 2027 have not been published, so the 2026 figures are the ones in force: 73 cents per kilometre for the first 5,000 kilometres in the provinces and 67 cents per kilometre after that, with 77 cents per kilometre and 71 cents per kilometre in the territories.
Recent releases have landed between mid-December and mid-January: the 2025 limits on Dec. 30, 2024 and the 2026 limits on Jan. 14, 2026. The 2026 limits were published after they had already taken effect on Jan. 1.
Yes. The release states the limits for the calendar year and they apply from Jan. 1, so the 2026 limits were retroactive to the start of the year they were published in.
Yukon, the Northwest Territories, and Nunavut use the territory limit, which is four cents higher at each tier than the provincial figure.
Yes. The tier counts per calendar year, so a driver starts again at the higher rate on Jan. 1 regardless of how many kilometres were claimed in 2026.
Not as a substitute for records. Self-employed motor vehicle expenses are claimed from actual costs apportioned by business use, and the published per-kilometre limit is useful as a benchmark rather than as the deduction itself.
The same release covers deductible leasing costs, the capital cost allowance ceiling for Class 10.1 passenger vehicles, and the prescribed rate used to value the personal portion of employer-paid vehicle costs.
No. The CRA also publishes quarterly kilometric rates under its travel directive for its own travel claims, which are separate from the annual tax-exempt automobile allowance limits.
Announced Jan. 14, 2026: 73 and 67 cents in the provinces, 77 and 71 cents in the territories, plus the leasing, capital cost, and benefit rates.
Announced Dec. 30, 2024: 72 and 66 cents in the provinces.
How a reasonable per-kilometre allowance is treated for payroll, and when an allowance becomes a taxable benefit.
The actual-cost route for self-employed drivers, with the records it requires.
The separate quarterly rates used for the CRA's own travel claims.
Work with the rates that are published today, check the history, or download the records you will need at the start of the year.