# What can I deduct as a self-employed person?

> The business expenses you can deduct, how home office and vehicle claims work, which purchases are capital, and the records the CRA expects you to keep.

- Web page: https://taxnotes.ca/guides/what-can-i-deduct/
- For: Self-employed · Topic: Self-employment
- Last reviewed: 2026-10-10

You can deduct any reasonable expense you incur to earn your business income, as long as you claim only the business part. Things that last for years, like equipment and furniture, are deducted gradually, as capital cost allowance (CCA).

## The basic rules

- **It has to be for the business, and reasonable.** Personal expenses aren't deductible. When something serves both your business and your personal life, such as a phone, a car or part of your home, claim only the business share. "Incur" means you've paid the expense or will pay it.
- **Net out credits and assistance.** If you're registered for the GST/HST and claim back the sales tax on a purchase as an input tax credit, deduct the expense without that tax. Subtract any grant, rebate or other assistance from the expense it relates to.

## Common deductible expenses

Common business expenses include:

- advertising
- office supplies such as pens, paper and stamps, and supplies you use up in providing your goods or services (cleaning supplies for a plumber, for example)
- rent, property taxes and insurance for the premises and equipment you use in the business
- telephone, cellphone and utilities you use to earn income
- interest on money borrowed for the business, and bank charges, including fees for processing payments
- legal, accounting and other professional fees, including the cost of preparing and filing your income tax and GST/HST returns
- business licences, dues to trade or commercial associations, and subscriptions to publications
- minor repairs and maintenance to property you use in the business, though not the value of your own labour
- travel to earn business income, such as fares and hotels
- wages you pay employees, including your child or spouse, if the work is needed for the business and the pay is what you'd pay anyone else

You can't deduct anything you pay yourself (an owner's salary or drawings), or dues to a club whose main purpose is dining, recreation or sport.

## Meals and entertainment

You can generally claim only 50% of what you spend on food, drinks and entertainment (or 50% of a reasonable amount, if that's less), including meals while you travel for business. There are exceptions, for example when you bill a client for the meal and show it on the invoice.

## Working from home

You can deduct part of your home costs if the workspace is your principal place of business, or if you use it only for the business and regularly meet clients, customers or patients there.

Eligible costs include heating, electricity, home insurance, cleaning materials, property taxes and mortgage interest, or part of your rent if you rent. Work out the business share on a reasonable basis, such as the workspace's area divided by your home's total area. If the room is also part of your living space, reduce the claim further by the share of each day it's used for the business.

Two limits apply. Home office expenses can't create or increase a business loss; whatever you can't use carries forward to the next year. And you can claim CCA on the business part of a home you own, but if you do, the capital gain and recapture rules will apply when you later sell the home.

## Your vehicle

You can deduct the business share of the costs of a vehicle you use to earn income, such as fuel, insurance and interest on a loan to buy it. The interest you can deduct on a loan for a passenger vehicle is capped. Claims have to be reasonable and backed by receipts.

The business share comes from your kilometres, so keep a logbook: for each business trip, the date, destination, purpose and distance, plus the odometer reading at the start and end of your fiscal period (your business year). Once you've kept a logbook for one full year, you can keep a three-month sample in later years instead, as long as the results stay within 10% of that base year.

## Equipment and other capital purchases

You can't deduct the full cost of depreciable property, such as a building, furniture or equipment, in the year you buy it. Because these things wear out or become obsolete, you deduct their cost over several years through CCA. Even desks, chairs, filing cabinets and calculators count as capital, not office supplies. Legal fees for buying capital property are added to its cost.

## Keep your records

You're required by law to keep records that support your income and expenses, generally for at least six years from the end of the last tax year they relate to. Don't send them with your return; keep them in case the CRA asks.

For each purchase, get a receipt showing the date, the seller's name and address, your name and address, and a description of what you bought. If the seller is a GST/HST registrant and the purchase is $100 or more before tax, it should also show their business number. Keep bank statements too, and a record of the dates and costs of business property you buy and sell.

## What to do

- Keep receipts and your vehicle logbook as you go, and claim only the business share of anything you also use personally.
- Enter your net self-employment income in the [income tax calculator](https://taxnotes.ca/calculators/income-tax/) to estimate your tax and CPP.

## Sources

1. [Business expenses](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/business-expenses.html) (canada.ca)
2. [Business-use-of-home expenses](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/report-business-income-expenses/completing-form-t2125/business-use-home-expenses.html) (canada.ca)
3. [Motor vehicle records](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/business-expenses/motor-vehicle-expenses/motor-vehicle-records.html) (canada.ca)
4. [Claiming capital cost allowance (CCA)](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/report-business-income-expenses/claiming-capital-cost-allowance.html) (canada.ca)
5. [Business records](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/business-records.html) (canada.ca)

Tax figures in this guide come from the TaxNotes.ca rates tables (https://taxnotes.ca/rates/), which cite the Canada Revenue Agency and, for Quebec, Revenu Québec.

Last reviewed: October 10, 2026

How to cite: "What can I deduct as a self-employed person?", TaxNotes.ca, last reviewed 2026-10-10, https://taxnotes.ca/guides/what-can-i-deduct/. For a figure or rule, also cite the official source listed above.

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