This is general guidance, not personalised tax advice. CRA requirements and thresholds change — check canada.ca or your accountant for current figures.
Vehicle costs are one of the largest expenses a contractor carries, and one of the least accurately tracked. Most reconstruct a rough distance figure at tax time from memory, or don't claim vehicle costs properly at all because building a logbook after the fact feels pointless. Neither serves you well — the CRA expects contemporaneous records, and under-claiming a legitimate cost is money left on the table.
How vehicle expenses work for a sole proprietor in Canada
Unlike a flat mileage rate, the CRA generally expects you to claim a business-use percentage of your actual vehicle running costs — fuel, insurance, maintenance, lease payments or capital cost allowance. That percentage comes from a mileage logbook comparing business kilometres driven to total kilometres driven over the year, so the logbook isn't optional paperwork — it's the entire basis for the claim.
What a proper logbook needs
- Date of the journey
- Destination and purpose of the trip — which job it relates to
- Kilometres driven
- Odometer readings at the start and end of the year, to establish total annual distance
Tying each trip to a specific job is where most mileage apps fall short. A generic tracker gives you a yearly total for the CRA. It doesn't tell you that one job needed five extra site visits that quietly ate into its margin.
Why job-level mileage matters, not just the yearly total
A job that needed multiple site visits and extra supplier runs costs more in vehicle time and fuel than one finished in a single trip — but if kilometres aren't tagged to the job, that cost is invisible until the year's fuel bill is totalled up. Tracking mileage per job shows which jobs are quietly more expensive to run, not just what the total deduction comes to.
Spreadsheet vs app
| Method | What actually happens |
|---|---|
| Memory, reconstructed later | Rough estimate, rarely accurate, doesn't survive a CRA review. |
| Paper logbook | Accurate if kept up all year, usually abandoned within a month. |
| Spreadsheet | Works if you log every trip same-day — most people don't. |
| App logging trips per job (like Site Wallet) | A trip logged in seconds, tagged to the job it was for, rolled into that job's real cost. |
How Site Wallet handles vehicle costs
Mileage and fuel receipts tag to a job exactly like any other cost, so a job's running total includes what it actually cost to get there and back — not just materials and labour. At tax time, export the same records for whichever business-use percentage you or your accountant calculate from the logbook.
FAQ
Do I need to log every single trip, or just business ones?
The CRA's approach requires knowing your total annual distance as well as business distance, so keeping odometer readings for the full year alongside logged business trips gives an accurate business-use percentage.
Can I use a simplified logbook instead of a full year?
The CRA has historically allowed a simplified logbook approach in certain circumstances after a full base year has been established, but this depends on your situation — check current guidance or your accountant.
What if I've been estimating my kilometres for years?
Going forward, log every business trip as it happens — a defensible, contemporaneous logbook from today onward is far stronger than trying to fix historic estimates retroactively.