Industry Guide
Delivery Driver Tax Deductions in Canada: What to Track
A practical guide to tracking delivery income, vehicle costs, receipts and mileage when reviewing delivery driver tax deductions in Canada.
Delivery drivers in Canada should track all delivery income, separate business and personal driving, save receipts, and keep records that connect each expense to earning income. Whether a cost is eligible depends on your work arrangement, the facts of your situation, and the records supporting the claim. The Canada Revenue Agency (CRA) says reasonable current expenses incurred to earn business income may be deductible, but personal expenses are not, and only the business portion of mixed-use costs should be considered. Read the CRA guidance on business expenses.
Start by confirming whether you are an employee or self-employed
Before organizing delivery driver tax deductions in Canada, determine how your delivery work is classified. Some drivers work as employees, while others operate as independent contractors or sole proprietors. The CRA looks at the actual working relationship, including control, financial risk and how the work is carried out. The label used by a delivery platform or payer is not the only factor. Review the CRA page on employee or self-employed status.
If you are an employee, the rules for employment expenses are different from the rules for business expenses. If you are self-employed, you generally report business income and eligible business expenses as part of your self-employment activities. If you or the payer are unsure about your status, either party can request a CPP/EI ruling from the CRA. See CRA guidance on determining worker status.
Track every dollar of delivery income
Start with gross income, not just the amount deposited into your bank account. Save platform statements, payment summaries, invoices, contracts, deposit records and other documents showing the date, amount and source of each payment. Include tips, incentives, bonuses, referral payments and other amounts connected with the delivery work when they form part of your income. The CRA says business records should support gross income and should be backed by original documents. See the CRA business records requirements.
A useful system is to save each platform statement by month and record the related deposit in the same period. If a platform shows gross customer charges, commissions, service fees or other adjustments separately, keep the statement rather than relying only on the net deposit. This makes it easier to understand how the reported income was calculated.
Use a mileage log for delivery driving
For drivers using a personal vehicle for delivery work, mileage records are usually central to the calculation of the business portion of vehicle costs. The CRA recommends recording total kilometres and the kilometres driven to earn business income. A full logbook should identify the date, destination, purpose and distance of each business trip, along with odometer readings at the start and end of the fiscal period. Read the CRA motor vehicle records guidance.
For a delivery driver, the purpose could be described as accepting or completing delivery orders, travelling between pickup and drop-off locations, or moving to a delivery area while working. Keep the description specific enough that you can later explain why the trip was business-related. Avoid recording only a daily total with no supporting detail if you cannot reconstruct the route or purpose.
The CRA also describes a simplified logbook approach based on a full base-year logbook and a later sample period, but the conditions must be met and the later use must remain representative. Do not assume a short sample automatically proves business use for an entire year. Your mileage records should reflect your actual pattern of driving. Check the CRA rules for full and simplified logbooks.
Understand which vehicle costs may be relevant
When a vehicle is used for both delivery work and personal travel, only the portion connected with earning business income should be considered. The CRA lists vehicle costs that may be relevant, depending on the vehicle and the facts, including fuel and oil, licence and registration fees, insurance, interest on money borrowed to buy the vehicle, maintenance and repairs, leasing costs, and electricity for certain zero-emission vehicles. Capital cost allowance is treated separately from operating expenses. Review the CRA motor vehicle expenses page.
Business-related parking fees may be treated differently from shared operating costs. The CRA states that the full amount of parking fees related to business activities may be deductible, subject to the applicable rules and supporting records. Keep the parking receipt, date, location and delivery-related purpose. See the CRA calculation guidance for motor vehicle expenses.
Do not treat every vehicle payment as an automatic deduction. A purchase may involve capital cost allowance, while a lease, loan interest, insurance policy or repair may have different rules. Review the vehicle type, ownership or lease arrangement, and the way the vehicle was used before entering an amount.
Do not overlook non-vehicle business costs
Delivery work may involve other costs besides driving. Depending on the facts, records and business purpose, relevant categories can include supplies, telephone expenses, delivery or express costs, business licences, payment-processing charges, professional fees and certain administration costs. The CRA lists common operating expense categories and emphasizes that expenses must relate to earning business income. Review the CRA overview of business expenses.
For a mobile phone or data plan used for both work and personal purposes, do not automatically record the entire bill as business-related. Keep the invoice and document a reasonable method for identifying the business portion. The same principle applies to equipment, insulated bags, mounts, chargers, uniforms or other items: the cost and business purpose should be supported by records, and personal use should not be included as business use.
Keep GST/HST information separate when it applies
Income tax expense records and GST/HST records are related but not identical. If you are registered for GST/HST, keep records of tax paid or payable on business purchases and the documents supporting any input tax credit claim. The CRA requires GST/HST registrants to maintain records connected with their business operations and GST/HST reporting. See the CRA GST/HST records guidance.
Do not reduce an income tax expense by an input tax credit twice. The CRA explains that when GST/HST on a business expense is claimed as an input tax credit, the expense amount used for income tax purposes must generally be reduced by that input tax credit. Your treatment may depend on your registration status and accounting method. Read the CRA business expense and input tax credit guidance.
Practical example: organizing one month of delivery records
Imagine a driver uses one vehicle for delivery work and personal errands. During a month, the driver saves platform statements, fuel receipts, a repair invoice, parking receipts and a mileage log. The log records total kilometres, business kilometres, dates, delivery areas and the reason for each work trip.
At month-end, the driver scans each receipt, assigns it to a category, and links vehicle costs to the vehicle record. The driver then compares the mileage log with the delivery platform’s work dates and checks whether the odometer readings are complete. If the records show that 40% of the vehicle’s total kilometres were business-related, that percentage may be relevant to shared vehicle operating costs, subject to the CRA rules and the quality of the supporting records. Business parking is recorded separately because it relates directly to delivery activity.
This example does not establish that any particular amount is deductible. It shows the type of evidence that helps connect income, mileage, receipts and business purpose. Eligibility still depends on the driver’s circumstances and the applicable CRA rules.
Record-keeping checklist for delivery drivers
- Income: Save platform statements, invoices, contracts, payment summaries, tips and deposit records.
- Mileage: Record total kilometres, business kilometres, date, destination, purpose and distance for work trips.
- Odometer: Record beginning and ending odometer readings for the relevant fiscal period.
- Fuel and charging: Keep receipts showing the date, supplier and amount.
- Repairs and maintenance: Save invoices and note which vehicle they relate to.
- Insurance and registration: Keep policy documents, renewal notices and registration records.
- Parking: Save receipts and note the delivery-related reason for each charge.
- Phone and supplies: Keep bills and document how business use was separated from personal use.
- GST/HST: Keep invoices and identify GST/HST paid or payable where relevant.
- Digital files: Back up scans, spreadsheets, mileage logs and platform statements.
- Retention: Keep records and supporting documents for the required period. The CRA generally refers to six years from the end of the related tax year, unless an exception or permission applies. Review the CRA record-retention guidance.
Common tracking mistakes to avoid
- Recording only the amount deposited instead of preserving the platform’s income statement.
- Estimating business kilometres at year-end without a contemporaneous log or other reliable support.
- Claiming all fuel, insurance or phone costs when the item was used personally as well.
- Mixing receipts from different vehicles or different delivery activities.
- Using a bank statement as the only evidence when it does not identify what was purchased.
- Assuming that a cost is deductible because it feels necessary for work.
- Ignoring GST/HST treatment when calculating the income tax expense amount.
Your next step
Set up one record for delivery income, one mileage log for each vehicle, and one receipt category for every recurring expense. Update the records weekly rather than waiting until tax time. A receipt-scanning and mileage-tracking workflow can help you preserve documents, classify costs and prepare an organized package for review. TiKi Tax can help you scan receipts, organize expenses, track mileage and prepare reports.
Educational information only. This article is not tax, legal or accounting advice, and eligibility for any deduction or credit depends on your facts, records and applicable CRA rules.