Delivery Driver Tax Deductions in Canada: The 2026 Checklist for Self-Employed Drivers
Updated: Oct 24
Delivery driver tax deductions in Canada start with your vehicle. If you deliver food, groceries or parcels as an independent contractor, you can deduct the business share of your actual vehicle costs, plus the other costs of earning your income, on Form T2125. The share comes from a logbook, so the one thing to do today is keep a log of every work trip. If a company pays you wages and gives you a T4, you are an employee and different rules apply.
Updated October 24, 2026.
Deliver for a living? Fuelshine logs every work trip automatically, so your logbook is ready at tax time. Free to start on iPhone and Android.
Are you a self-employed delivery driver in Canada?
Most gig delivery drivers are independent contractors. You get no T4, you report your income on Form T2125 (Statement of Business or Professional Activities), and you can deduct the costs of earning it. Employees of a courier or delivery company generally cannot deduct vehicle costs unless their employer signs form T2200. Ask payroll or an accountant which one you are.
Vehicle costs: the biggest delivery driver tax deduction in Canada
You do not claim a flat rate per kilometre. You add up the real cost of running the vehicle for the year, then deduct the business share:
Fuel
Insurance
Maintenance and repairs
Licence and registration
Lease payments, or capital cost allowance (depreciation) if you own the vehicle
Loan interest
Your business share is your business kilometres divided by your total kilometres for the year. Parking for work is the exception: it is generally claimed in full. Here is the maths for a driver who covers 24,000 km in the year, 18,000 km of it on deliveries:
Business share: 18,000 ÷ 24,000 = 75%
Vehicle costs for the year: $9,600
Deduction: 75% × $9,600 = $7,200
The CRA also caps some vehicle costs. For 2026 the limits are:
2026 limit | Amount |
Cost ceiling for capital cost allowance on a passenger vehicle (Class 10.1) | $39,000 |
Deductible leasing cost | $1,100 per month |
Deductible loan interest | $350 per month |
Source: Department of Finance Canada, January 14, 2026. The CRA's per-kilometre rate (73¢ for the first 5,000 km, 67¢ after that) is the ceiling for employer allowances, not a self-employed deduction.
Which delivery trips count
Driving to a pickup, with an order and on to your next job generally counts
Short hops between orders count, so log them all
Your normal drive home at the end of a shift generally does not
Other delivery driver deductions people miss
The work share of your phone and data plan
Parking and tolls on work trips
A phone mount, an insulated delivery bag and a dash cam
Platform fees and service charges on your payout statements
Home office costs, if you do your admin at home
The employer half of your CPP contributions, because self-employed people pay both halves. Ask your accountant.
The record the CRA expects
Keep a log for each vehicle with these four things for every trip:
The date
Where you went
Why you went (for example delivery)
How far (kilometres)
Also note your odometer reading at the start and end of the year to show your total kilometres, and keep your vehicle receipts. Keep everything for at least six years. A log made at the time of each trip is much stronger than one rebuilt from memory. Fuelshine tracks trips in the background, lets you tag each one Business or Personal, and exports a report. The CRA mileage log requirements guide has the full list.
Delivery driver tax deductions in Canada: common questions
What can a delivery driver deduct in Canada?
A self-employed delivery driver can deduct the business share of vehicle costs (fuel, insurance, maintenance, licence and registration, lease or capital cost allowance, and loan interest), plus costs like the work share of a phone plan, parking, tolls, a phone mount and a delivery bag.
Can I use the CRA 73¢ per-kilometre rate as a self-employed driver?
Generally no. That rate is the ceiling for tax-free allowances that employers pay employees. Self-employed drivers multiply their total vehicle costs by their business-use share instead.
Do I need a logbook to claim vehicle expenses?
Yes. Keep a log with the date, destination, purpose and kilometres of each business trip, and your total kilometres for the year.
What if I also use my car for personal trips?
You can only deduct the business share. Your business-use share is your business kilometres divided by your total kilometres for the year.
How long do I keep my mileage log?
Keep your log and your receipts for at least six years.
Is Fuelshine free?
Fuelshine is free to start on iPhone and Android. Pro unlocks unlimited trips, multiple vehicles and advanced reports.
This is general information, not tax advice. Check your situation with a tax professional.
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