Can I deduct the cost of fuel for my business vehicle in Ontario?

Yes, the cost of fuel is a deductible vehicle operating expense for self-employed individuals, limited to the business-use portion. If you use your vehicle 60% for business based on your mileage log, then 60% of your annual fuel costs are deductible.

Fuel costs should be tracked throughout the year by retaining gas receipts or credit card statements showing fuel purchases. For vehicles used exclusively for business (rare in practice), all fuel costs are deductible. For mixed-use vehicles, diligent tracking of kilometres — kept in your mileage log — is the foundation for the fuel deduction because the business percentage from the log applies to fuel just as it applies to other operating costs.

Electric vehicle charging costs are treated similarly: the cost of electricity used to charge a business vehicle is deductible at the business-use percentage. As electric vehicles become more common in business fleets, the same principles apply, though tracking specific charging costs (especially at home where electricity is bundled with other utility expenses) requires a reasonable allocation method.