Writing off your work truck
Your truck is probably your single biggest deduction — and the one people get wrong most often, because the vehicle itself isn't expensed all at once. Here is how it actually works for a self-employed contractor in Ontario.
Two separate things: the truck, and running the truck
Contractors trip over this constantly. There are two different deductions hiding in one vehicle, and they work in completely different ways.
- The vehicle itself is a capital asset. You do not expense it — you depreciate it over years through Capital Cost Allowance.
- The cost of running it — fuel, insurance, repairs, oil, licence, wash — is a normal expense you claim every year.
The truck: CCA Class 10
A pickup or cargo van used more than half the time for the business is almost always a Class 10 motor vehicle. Class 10 has no cost ceiling and depreciates at a 30% declining-balance rate. So a $50,000 work truck used 80% for the business gives you a first-full-year CCA claim in the range of $12,000, then 30% of the shrinking balance each year after.
The trap: if the CRA decides your vehicle is really a passenger vehicle (Class 10.1), the cost you can depreciate is capped at roughly $38,000 plus HST for a 2026 purchase — everything above that line simply never gets deducted. A genuine work truck hauling tools to job sites belongs in Class 10. Keep it looking like what it is.
Running costs: expensed on the business share
Fuel, insurance, maintenance, licensing and interest on a vehicle loan are all deductible — but only for the business-use portion. If your logbook shows 80% business kilometres, you deduct 80% of every one of those costs. No logbook, no defensible claim.
What this means for your set-aside
Every dollar of legitimate vehicle deduction lowers your net income, which lowers both your income tax and — up to the yearly maximum — your CPP. On trades incomes that is often the difference between a comfortable filing and a nasty one. Put your real numbers into the calculator with and without the truck and watch the total move.
Common questions
Can I write off the full cost of my work truck in one year?
No. A vehicle is a capital asset, so you claim it gradually through Capital Cost Allowance (CCA), not as a lump-sum expense. A pickup used more than 50% for business is generally a Class 10 'motor vehicle' with no cost ceiling, depreciated at 30% declining-balance. The running costs — fuel, insurance, repairs, licensing — are expensed each year on the business-use share.
What is the difference between Class 10 and Class 10.1?
Class 10 covers work vehicles (most pickups and cargo vans used mainly for the business) with no cap on cost. Class 10.1 is for 'passenger vehicles' — cars and lighter trucks used more for getting around than hauling — and it caps the cost you can depreciate (about $38,000 plus tax for 2026 purchases). A crew-cab used mostly for tools and job sites usually lands in Class 10, which is far more generous.
How do I split business and personal use?
Keep a logbook. You deduct the business-use percentage of both CCA and running costs — if 80% of your kilometres are for the business, you claim 80%. The CRA can and does ask for the log, so track it from January, not in April.
Is a truck lease better than buying for taxes?
A lease is deducted differently — lease payments are an expense (subject to a monthly cap for passenger vehicles), not CCA. Whether lease or buy is better depends on cash flow and how long you keep vehicles, not just tax. This is a good question to run past an accountant with your real numbers.