Running a small business in Canada means tracking every deductible expense to minimize your tax bill. The CRA allows you to deduct reasonable business expenses that were incurred to earn income — but only if you have proper documentation. This checklist covers every major category of CRA business expense you can claim in 2026.
Whether you operate as a sole proprietor filing Form T2125, a partnership, or a Canadian-controlled private corporation (CCPC), these deductions apply to you. Keep this guide handy throughout the year and scan receipts as you go with a receipt tracker for taxes.
Advertising and Marketing
You can deduct advertising expenses used to promote your business to Canadian customers. This includes online advertising (Google Ads, Meta Ads, LinkedIn), website hosting and design, business cards, print ads in Canadian publications, signage, and promotional materials. Note that advertising in non-Canadian media directed at the Canadian market has restrictions — consult your accountant for details.
Office Expenses and Supplies
Day-to-day office supplies — paper, ink, pens, postage, envelopes — are fully deductible. Software subscriptions, cloud storage, and SaaS tools used for business are also deductible in the year purchased. Keep receipts for every purchase, no matter how small.
Home Office Expenses
If you work from home, you can deduct a proportional share of rent, utilities, internet, insurance, and property taxes. The detailed method uses your business-use floor area percentage. See our full guide to home office expenses CRA for eligibility and calculation details.
Vehicle and Transportation
Business-related vehicle expenses — fuel, insurance, maintenance, lease payments, parking — are deductible based on your business-use percentage. You must keep a log book tracking business versus personal kilometres. The CRA has annual limits on vehicle cost for CCA purposes and lease payment deductions. Read our detailed guide to vehicle expenses CRA.
Meals and Entertainment
Business meals with clients, prospects, or at conferences are deductible at 50% of the actual cost. You must record the date, attendees, and business purpose on each receipt. Long-haul truck drivers can deduct 80%. See our guide to meal expenses CRA for all the rules and exceptions.
Travel Expenses
Airfare, train, hotel, and other travel expenses for business purposes are fully deductible (meals while travelling are still subject to the 50% rule). Keep all receipts and document the business purpose of each trip.
Professional Fees
Fees paid to accountants, lawyers, consultants, and other professionals for business services are fully deductible. This includes tax preparation fees for your business return. Keep all invoices.
Insurance
Business insurance premiums are deductible — this includes general liability, professional liability (errors and omissions), business property insurance, and commercial vehicle insurance. Health and dental premiums may be deductible if you are self-employed and not covered by another plan.
Telephone and Internet
The business-use portion of your phone and internet bills is deductible. If you use your personal phone for business, calculate a reasonable business-use percentage and deduct that portion.
Salaries and Benefits
Wages, salaries, and benefits paid to employees are fully deductible. This includes the employer’s portion of CPP, EI, and any health or retirement benefits you provide. Keep payroll records and T4 slips.
Capital Cost Allowance (CCA)
Business assets like computers, furniture, equipment, and vehicles cannot be fully deducted in the year of purchase. Instead, you claim CCA — a yearly deduction based on the asset’s CCA class and depreciation rate. Common classes include Class 50 (computers, 55%), Class 8 (furniture and equipment, 20%), and Class 10 (vehicles, 30%). The Accelerated Investment Incentive allows a larger first-year deduction for eligible property.
GST/HST Paid on Business Expenses
If you are registered for GST/HST, you can claim input tax credits (ITCs) to recover the GST/HST paid on business purchases. This is a separate claim from your income tax deductions. Documentation requirements are strict — see our guide to GST/HST ITC documentation.
Other Deductible Expenses
- Bank fees and interest — business bank account fees, credit card interest on business purchases, loan interest for business purposes
- Licences and permits — business licences, professional memberships, regulatory fees
- Education and training — courses, conferences, and certifications directly related to your business
- Bad debts — amounts owed to you that you have determined are uncollectable
- Rent — commercial office or retail space rent
- Delivery and shipping — postage, courier fees, freight charges
Receipt Requirements for All Deductions
The CRA requires supporting documentation for every expense you claim. Keep receipts that show the date, amount, vendor, and description of the purchase. All records must be kept for at least six years from the end of the tax year.
The easiest way to stay organized is to scan every receipt as it arrives. SparkReceipt’s AI receipt scanner extracts all the details in seconds and categorizes expenses automatically. Connect your email to capture digital receipts from SaaS tools and online purchases. Generate expense reports anytime you need them.
For a complete guide to what the CRA expects, see our pillar article on CRA receipt requirements.
This article is for informational purposes only and does not constitute tax advice. Consult a qualified Canadian tax professional for your specific situation.
