Per Diem vs Actual Expenses: Which Method Is Best for Canadian Drivers?
Canadian drivers need to track travel expenses carefully to maximize deductions while staying compliant with CRA and Revenu Québec rules. Whether using the actual expense method or the simplified per diem approach, keeping clear records is essential. A&S Financials helps drivers choose the right method, set up proper documentation, and ensure accurate federal and Quebec filings making tax time simpler and stress-free.
For Canadian drivers, tracking travel costs is part of the job. Fuel, meals, lodging, vehicle maintenance—it all adds up. The question many drivers face is: should I use a per diem-style method or claim actual expenses? Understanding the difference under CRA rules—and aligning with Revenu Québec when filing provincially—is key to maximizing deductions without risk.
Actual Expense Method
This method involves claiming what you actually spend, supported by records. Deductible expenses typically include:
-Fuel, maintenance, insurance, registration fees
-Lease payments or capital cost allowance (CCA)
-Lodging, parking, tolls, and business-related communication costs
A logbook is essential for vehicle expenses, showing business kilometres vs. total kilometres. Meals can also be claimed, generally limited to 50% of actual cost, with receipts.
Simplified Meal Method (Often Called “Per Diem”)
The CRA allows a flat-rate method only for meals, with a daily maximum and 50% deductibility. Receipts aren’t needed, but you must document:
-Dates and locations of work-related travel
-Proof the travel was required for work
Choosing the Right Method
Simplified meals reduce paperwork and work well for frequent, consistent travel.
Actual expenses are better when costs fluctuate, travel is irregular, or precise tracking is desired.
Mixing Methods
You can combine simplified meals for food with actual expenses for vehicle, lodging, and other costs—but consistency is crucial.
How A&S Financials Helps
A&S Financials works with drivers across Canada to:
-Evaluate which method suits your travel patterns
-Set up compliant tracking and documentation
-Align federal and Quebec filings
-Provide support during reviews or audits
Final Thought
There’s no universal “best” method. The right choice reflects your travel habits, record-keeping, and tolerance for paperwork. A short review with a qualified advisor can ensure deductions are accurate, defensible, and stress-free.