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Updated February 19, 2026 · 12 min read · CPA-Verified

The Complete List of Tax Deductions for Canadian Freelancers (2026)

The average Canadian freelancer misses $2,000–$5,000 in legitimate tax deductions every year. Here's every CRA-eligible deduction you can claim on your T2125 — organized by category, with CRA source links and practical tips.

If you're self-employed, a freelancer, a contractor, or a gig worker in Canada, you report your business income and expenses on CRA Form T2125 (Statement of Business or Professional Activities). Every dollar you claim as a legitimate business expense reduces your taxable income — and the tax you owe.

This guide covers 70+ deductions across seven categories. Bookmark it. Refer back to it at tax time. And if you want a ready-made tracker, grab our free tax deduction checklist.

💡 The Golden Rule: To deduct an expense, it must be (1) incurred to earn business income, (2) reasonable in the circumstances, and (3) supported by documentation. When in doubt, keep the receipt.

1. Business Operating Expenses

These are the day-to-day costs of running your freelance business. They go on Line 8811–8860 of your T2125.

Source: CRA – Business expenses

⚠️ Common Mistake: Meals are only 50% deductible, not 100%. And "meals while working" at your desk don't count — the meal must involve a business purpose (client meeting, networking, travel).

2. Home Office Expenses

If you work from home, you can deduct a proportionate share of your household costs. CRA allows this using the Detailed Method (based on the percentage of your home used for business).

How to Calculate Your Home Office Percentage

Divide your workspace square footage by your total home square footage. For example: 150 sq ft office ÷ 1,200 sq ft home = 12.5%.

Source: CRA – Work-space-in-the-home expenses

💡 Pro Tip: Your home office deduction cannot create a business loss. If your home office expenses exceed your net income, you can carry the unused portion forward to the next year. Don't leave money on the table — track it even if you can't use it this year.

3. Vehicle & Transportation

If you use your personal vehicle for business (meeting clients, site visits, picking up supplies), you can deduct the business-use percentage of your vehicle costs.

How to Calculate Business-Use Percentage

Track your total kilometres driven in the year and your business kilometres. Business km ÷ total km = your deduction percentage. CRA requires a mileage log.

Source: CRA – Motor vehicle expenses

⚠️ Critical: Without a mileage log, the CRA can deny your entire vehicle expense claim. Use an app, a spreadsheet, or our free checklist — just track it.

4. Capital Cost Allowance (CCA) — Depreciable Assets

When you buy equipment that lasts more than one year, you don't deduct the full cost immediately. Instead, you claim CCA (depreciation) over several years.

Source: CRA – Claiming CCA

💡 Pro Tip: The Accelerated Investment Incentive lets you claim a larger CCA deduction in the first year. For most classes, you get 1.5x the normal rate in year one. Check if your asset qualifies.

5. HST/GST — Input Tax Credits (ITCs)

If you're registered for HST/GST (mandatory once you exceed $30,000 in revenue over four consecutive quarters), you can claim back the HST you paid on business purchases as Input Tax Credits.

Source: CRA – Input tax credits

💡 Quick Method Alert: If you use the HST Quick Method, you cannot claim ITCs on most purchases (except capital equipment over $30,000). Make sure you've done the math on which method saves you more. Read our HST Quick Method vs Regular Method comparison →

6. CPP Contributions

As a self-employed person, you pay both the employee and employer portions of CPP. The employer-equivalent portion is deductible on your tax return.

For the 2025 tax year, the combined self-employed CPP rate is 11.9% on net self-employment earnings between $3,500 and $71,300. That's up to $8,068 in CPP. The employer half (~$4,034) is a direct deduction from income.

7. Commonly Missed Deductions

These are the deductions most freelancers forget. Don't be most freelancers.

📥 Track Every Deduction Automatically

Our free CPA-built checklist has all 70+ deductions pre-loaded, plus home office and vehicle calculators.

Download Free Checklist

How to Maximize Your Deductions

  1. Track expenses as they happen. Don't wait until April. Use an app, a spreadsheet, or our free checklist.
  2. Keep every receipt. Digital is fine — take photos, save PDFs. CRA requires you to keep records for 6 years.
  3. Separate business and personal. Get a dedicated business bank account and credit card. It makes everything easier.
  4. Know the rules before you claim. "Reasonable" is CRA's favourite word. A $5,000 steak dinner for a solo freelancer is not reasonable.
  5. Claim CCA strategically. You can choose to claim less than the maximum CCA in a year. If your income is low, save CCA for a higher-income year.

Frequently Asked Questions

What tax deductions can Canadian freelancers claim?
Canadian freelancers can claim any expense incurred to earn business income on CRA Form T2125. This includes advertising, office supplies, professional fees, home office costs, vehicle expenses, internet, phone, software subscriptions, subcontractor payments, and more. The expense must be reasonable and supported by documentation.
How do I claim home office expenses as a freelancer in Canada?
Calculate the percentage of your home used for business (workspace area ÷ total home area). Apply that percentage to eligible expenses: rent, utilities, home insurance, property tax, mortgage interest, internet, and maintenance. Report these on your T2125. Note: home office deductions cannot create a business loss — unused amounts carry forward.
Can I deduct my phone and internet bills?
Yes. Deduct the business-use portion of both. If your phone is used 60% for business, claim 60% of the total bill. A dedicated business phone line is 100% deductible. Keep a log or reasonable basis for your percentage.
What is the T2125 form?
The T2125 (Statement of Business or Professional Activities) is the CRA form where self-employed individuals report business income and expenses. It's attached to your T1 personal tax return. Every deduction listed in this article goes on your T2125.
Do freelancers need to pay CPP?
Yes. Self-employed individuals pay both the employee and employer portions of CPP — a combined rate of 11.9% on net self-employment earnings between $3,500 and $71,300 (2025 figures). The employer-equivalent portion is deductible from your income.
Do I need to keep receipts for tax deductions?
Yes. CRA requires supporting documentation for all business expense claims. Keep receipts, invoices, bank statements, and contracts for at least 6 years after the tax year. Digital copies (photos, PDFs) are acceptable.

Disclaimer: This article is for informational purposes only and does not constitute tax advice. Tax rules change annually. Consult a qualified tax professional for advice specific to your situation. All CRA links and figures were accurate as of February 2026.