Write it off Online business expenses you can claim in Canada

If you’ve ever thought “I’m probably leaving money on the table because I don’t really know what I can claim,” you’re not alone. It’s the thing we hear most from Canadian business owners, right after “taxes scare me.”

Here’s the short answer. You can deduct any reasonable expense you pay to earn business income. That covers software and subscriptions you use to run the business, your website, payment fees, advertising, professional fees, training, the business share of your phone and internet, and part of your home if you work from it. You can’t deduct personal costs, and anything that lasts for years gets written off over time rather than all at once.

That’s true whether you sell online, run a practice or work in the trades. Below is the plain-English list, what a write-off is actually worth, what CRA usually says no to, and the simple habit that makes tax time a send-it-off job instead of a lost week.

How a business write-off actually works

A write-off doesn’t mean the government pays you back for the purchase. It lowers the income you pay tax on.

Say you spend $1,000 on software for your business. Your taxable profit drops by $1,000, so you save whatever tax you would have paid on that $1,000. For many small business owners that’s roughly a quarter of it, depending on your income and province. So you save about $250, not $1,000.

If you’re registered for GST/HST, you can usually also claim back the GST/HST you paid on the purchase. More on that further down.

How much can you write off? There’s no annual cap. You can claim the business portion of every reasonable expense you can back up with a receipt.

The everyday expenses most business owners can claim

• Software and subscriptions. Accounting software, scheduling tools like Jane App, Canva, email marketing, Zoom, cloud storage, AI tools. If you use it to run the business, it counts.
• Website and online costs. Hosting, domain, themes, plugins, course or membership platforms.
• Payment processing fees. Stripe, Square, PayPal and Shopify fees. These are the most-missed expense we see, because they come out before the money lands in your account. Record the full sale and the fee separately.
• Bank charges and interest. Business account fees, and interest on money borrowed for the business.
• Advertising and marketing. Social media ads, Google ads, printed materials, sponsorships.
• Professional fees. Bookkeeping, accounting, legal advice, consultants.
• Office expenses and supplies. Printer ink, postage, stationery, and the smaller items you use up while doing the work.
• Training, books and professional development. Courses that keep your current skills sharp, plus business books and industry publications.
• Conventions. Up to two business or professional conventions a year.
• Licences, memberships and dues. Business licences and professional association fees. (Golf, gym and dining club dues don’t count.)
• Uniforms and protective gear. Branded uniforms and required safety gear like steel-toe boots and hi-vis. Regular clothing doesn’t count, even if you only wear it for work. More on that below.
• Subcontractors and wages. What you pay people to help you deliver the work.
• Vehicle expenses. The business share of gas, insurance, repairs and lease or loan interest, backed by a mileage logbook. CRA’s motor vehicle expenses page covers the details.
• Home office. If you work from home, part of your rent or mortgage interest, utilities, home insurance and property taxes. It’s a few steps to calculate, so we gave it its own page: Home office expenses in Canada.

Subscriptions: what counts and what doesn’t

The rule is simple: a subscription is deductible when it’s directly related to running your business.

• Business software and tools: yes. Accounting, design, scheduling, email, website, AI and project tools. Annual plans are usually spread over the period they cover.
• Industry memberships and trade publications: yes, if they relate to your work.
• Music licensing for your videos: yes. Services like Epidemic Sound or Artlist that licence music for business use. If you play background music in a clinic, studio or shop, a commercial music service counts too.
• Streaming services and TVs: be careful. See below.

Phone, internet and computers

• Phone: claim the business share. If your phone is used half for business, claim half of the bill.
• Internet: claim the business share too. For most of the clients we work with, that lands at about half.
• Computers: these are a bigger purchase. See the next section.

Bigger purchases: laptops, cameras, tools and furniture

If something gives you a benefit for years, CRA treats it as a capital purchase. You claim it gradually through capital cost allowance (CCA) instead of all in the year you bought it.

A few common examples, at the time of writing:

• Computers and their operating systems (Class 50) are normally written off at 55% a year on a declining balance. Computers bought after April 15, 2024 and put to use before 2027 can qualify for a full write-off in the first year. Ask us whether yours does.
• Small tools under $500 (Class 12) can be written off 100% in the year you buy them. That’s a big one for trades.
• Furniture and general equipment (Class 8) are written off at 20% a year.
• In the first year, most classes only let you claim half the normal rate (the “half-year rule”). Some temporary incentives change that, so check before you assume.

Rates and incentives change, so always check CRA’s current CCA classes list.

A note on the “$500 rule.” You’ll hear people say anything under $500 is an expense and anything over is an asset. That’s a bookkeeping habit, not a rule in the Income Tax Act. CRA looks at what the purchase is: does it last, does it improve something or just maintain it? See CRA’s current vs capital guide.

What CRA usually says no to

• Personal expenses dressed up as business. Groceries, family dinners, streaming services, the personal share of your phone or car.
• Meals, unless there’s a real business reason. Even then, you can usually claim only 50% (CRA line 8523). Coffee alone at the café you work from isn’t a business meal.
• Club dues. Golf, gym, dining or sports club memberships aren’t deductible, even if you network there.
• Clothing, including outfits for photo shoots and videos. Unless it’s a uniform or protective gear, clothing is personal — even if you bought it just for your headshots or only wear it on camera. The narrow exception is self-employed performers and artists, for wardrobe used solely for performances. CRA spells out exactly what qualifies in Income Tax Folio S4-F14-C1, Artists and Writers (¶1.38).
• Costs that don’t fit the size of the business. A $15,000 coaching program for a business earning $8,000 a year will raise questions.

The one-question test: could you calmly explain to a CRA reviewer why this was a business expense for your kind of business? If yes, claim it and keep the receipt. If you’d squirm, talk to us first.

Timing: buying before year end

Buying something before year end moves the deduction into this year, but it doesn’t make the purchase free. You still spend the money to save a fraction of it in tax. Buy what the business actually needs.

Your year end depends on your setup. Sole proprietors use December 31. Corporations use their own fiscal year end. If you pay ahead for something that covers more than one year, like a two-year software plan, the deduction is usually spread over the years it covers.

If you’re registered for GST/HST, track the tax separately

If you’re registered, you can usually claim back the GST/HST you paid on business expenses as input tax credits. That only works if your records show the tax separately from the expense. Our GST/HST guide explains how it works.

The habit that saves you the lost week at tax time

The business owners who claim everything they’re entitled to aren’t smarter. They just don’t wait until April.

• Use one business bank account and card. No mixing, so nothing gets lost.
• Snap or forward every receipt the day you get it. Most accounting software (Xero, QuickBooks) lets you email receipts straight in.
• Categorize monthly, not yearly. Fifteen minutes a month beats a week of digging.
• Keep records for six years from the end of the tax year they relate to. That’s CRA’s rule. See the box below for exactly when you can shred.

Want a checklist to keep beside you? Grab our free Business Tax Expense Guide.

You don’t need to feel dumb about any of this. Nobody’s born knowing CCA classes. Two easy ways to get help:

• Doing your own books? The Books Check-Up is a flat-fee review of your bookkeeping. We look at what you’ve categorized, flag what’s missing or misclassified, and walk you through it in plain English.
• Rather hand it off? Book a free 15-minute video call and we’ll talk about having our team take care of it. Or email team@kcandcompany.ca with a few details about your business and what you need.