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2026 CRA Travel Rates: What Business Owners Need to Know

  • Mar 25
  • 2 min read

The Canada Revenue Agency (CRA) has released the 2026 travel rates. These include updated vehicle and meal allowances.


These rates help businesses reimburse employees for work-related travel. They also affect payroll reporting and tax deductions. Understanding them can help you stay compliant and reduce errors.


🚗 2026 Vehicle (Kilometric) Rates


For 2026, the CRA recommends the following rates when employees use their personal vehicle for business travel:

  • $0.73 per kilometre for the first 5,000 kilometres

  • $0.67 per kilometre after 5,000 kilometres

  • $0.77 per kilometre for the first 5,000 kilometres in the Territories


To keep the allowance non-taxable for employees:

  • The rate must be reasonable

  • Only business kilometres can be reimbursed

  • A mileage log should be kept

  • Do not combine a flat monthly amount with a per-kilometre rate


When structured properly:

  • The payment is usually not taxable for the employee

  • The business can claim it as a deduction


If the allowance is considered unreasonable, it becomes taxable and must be reported on the employee’s T4.


Commuting from home to a regular workplace does not count as business travel.


🍽 2026 Meal Allowances


The CRA also provides daily meal limits for travel. Businesses can choose between:

  • Detailed method (keep receipts), or

  • Simplified method (flat daily rate)


Important rules to remember:

  • Usually only 50% of meals can be deducted

  • The 50% rule applies even if you reimburse more

  • Some exceptions may apply in special situations


Even with the simplified method, keep records showing:

  • Date of travel

  • Destination

  • Business reason for the trip


What Travel Expenses Can Be Claimed?


Eligible business travel expenses may include:

  • Vehicle costs using kilometre rates

  • Airfare or train tickets

  • Hotels or short-term stays

  • Meals (50% deductible)

  • Parking and tolls

  • Taxi or ride-share costs


The expense must be for business purposes, not personal use.


Why This Matters for Business Owners


Incorrect reimbursements can lead to:

  • Taxable benefits for employees

  • Payroll mistakes

  • CRA reassessments

  • Lost tax deductions


Reviewing your travel policy now can help avoid problems later.


Working with a tax accountant can help ensure your travel reimbursements are set up correctly. Professional accounting and tax services also support accurate payroll reporting.


Our team provides tax preparation services, bookkeeping services, and small business bookkeeping support. We also assist businesses searching for a business accountant and guidance on business bookkeeping policies.


Clear records today can lead to smoother reporting at tax time.


If you would like assistance reviewing your employee reimbursement structure or corporate travel policies, we invite you to learn more about K Liu Accounting Services Inc. Our team proudly supports clients across Canada both in person and virtually.



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