Mileage Log: Requirements, Information and Template

A mileage log, also known as a travel log, vehicle logbook or log book, is used to distinguish kilometres driven for business purposes from those driven for personal purposes.

This document can be used to calculate the taxable benefit associated with an automobile provided by an employer or to support motor vehicle expenses claimed by a business owner. An incomplete log may result in a penalty, an incorrectly calculated taxable benefit or the disallowance of certain expenses.

Who must keep a mileage log?

Requirements vary depending on who owns the vehicle and how it is used.

When an automobile is made available to an employee or a person related to the employee, the employee must keep a record of their travel and provide a copy to their employer.

A business owner who claims motor vehicle expenses must also be able to demonstrate that the vehicle was used for business purposes. The mileage log and supporting documents provide evidence of this use. Without adequate documentation, tax authorities may challenge certain expenses.

What should a travel log include?

For each business trip, the log should include:

• the date;

• the point of departure;

• the destination;

• the business purpose of the trip;

• the number of kilometres driven;

• the vehicle used, if several vehicles are available.

It is also recommended that you retain:

• the odometer reading at the beginning of the year or period;

• the odometer reading at the end of the year or period;

• the total number of kilometres driven;

• the total number of business kilometres;

• the total number of personal kilometres;

• invoices, receipts and other documents supporting the business trips.

For an automobile provided by an employer, Revenu Québec requires the log to include, among other information, the total number of days during which the automobile was made available to the employee and the total number of kilometres driven, recorded on a daily, weekly or monthly basis.

Mileage log template

A mileage log can be kept in an Excel spreadsheet, an application, accounting software or a paper document. What matters is that the information be recorded regularly and can be verified.

Here is an example of a travel log:

Annual mileage summary

The percentage of business use can be calculated as follows:

Business kilometres ÷ total kilometres × 100

In this example:

14,100 ÷ 19,700 × 100 = 71.6%

Depending on the taxpayer’s situation, this percentage may be used to calculate eligible motor vehicle expenses.

What is the difference between business and personal travel?

Business travel is undertaken as part of an employee’s duties or the company’s operations. Examples include travel:

• to a client’s premises;

• between two business locations;

• to a job site;

• to meet with a supplier;

• to deliver goods;

• to attend a business-related activity.

As a general rule, travel between an employee’s home and their regular place of work is considered personal. However, the classification may depend on the specific circumstances, particularly when the employee travels directly to a client’s location or a temporary job site.

It is therefore important to record a sufficiently detailed business purpose. A description such as “business” or “work” is less useful than “meeting with client ABC” or “inspection of the Lévis job site.”

When must an employee submit the log to their employer?

The employee must provide a copy of the log to the employer by the earlier of the following applicable deadlines:

• January 10 of the year following the year in which the automobile was made available to the employee;

• the 10th day following the day on which the automobile was returned to the employer or to a person related to the employer.

An employee who fails to provide the log within the prescribed deadline may be subject to a $200 penalty.

It is nevertheless preferable to complete the log as trips occur. Waiting until the end of the year increases the risk of forgetting a trip, destination or business purpose.

Why does the employer need the log?

The employer uses the log to determine the proportion of personal automobile use and calculate the employee’s taxable benefit.

This benefit may include:

• a standby charge for the use of the automobile;

• an operating expense benefit.

The applicable amounts must be reported on the employee’s tax slips, including the T4 slip and Relevé 1. Depending on the circumstances, the employer may also have to calculate source deductions, employer contributions and sales taxes.

The Canada Revenue Agency also recommends reviewing vehicle logs to determine the number of kilometres driven for personal and business purposes when an employer provides a vehicle.

Why should a business owner keep a mileage log?

For a self-employed individual or business, the log establishes the proportion of vehicle use related to earning business income.

This proportion may be used to determine the deductible portion of certain expenses, including:

• fuel;

• insurance;

• maintenance and repairs;

• vehicle registration fees;

• eligible interest or leasing costs;

• capital cost allowance, when the applicable conditions are met.

The log should be supported by documents such as invoices, receipts, contracts, work orders or appointment calendars. The business owner is responsible for demonstrating the business nature of the trips reported.

What are the consequences of an incomplete mileage log?

Failing to keep an adequate log may result in:

• a $200 penalty for an employee who does not submit the required log by the applicable deadline;

• an incorrectly calculated taxable benefit;

• additional taxes, interest or penalties;

• certain motor vehicle expenses being challenged or disallowed;

• adjustments to tax slips;

• additional employer contributions and sales taxes;

• a reduction in certain income-tested tax credits or benefits received by the employee.

An accurate log therefore protects employees, employers and business owners alike.

Best practices for keeping a mileage log

To make record-keeping easier:

1. Record trips as soon as they occur.

2. Include a specific business purpose.

3. Record the odometer reading at the beginning and end of the year.

4. Clearly distinguish between business and personal kilometres.

5. Retain invoices and other supporting documents.

6. Use the same tracking method consistently.

7. Periodically verify that the log total matches the odometer reading.

8. Prepare an annual summary for each vehicle and user.

9. Keep a copy of the log with your tax records.

10. Seek professional advice when the nature of a trip is unclear.

Have your automobile-related obligations reviewed

Keeping a travel log makes it easier to calculate taxable benefits and properly support the company’s motor vehicle expenses.

Mallette professionals can help you determine which information to retain, calculate taxable benefits and review the tax treatment of vehicles used by your business.

To learn more about our services for business owners and companies in the sector, explore our expertise serving construction businesses.