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A business expense write off is a deduction that lowers the profit you’re taxed on. On $80,000 of business income in Ontario, an extra $6,000 of valid expenses cuts your income tax and CPP by $2,286, about 38 cents per dollar. The catch: the cost has to belong to the business.
What does the CRA let you write off?
The CRA’s list of operating expenses includes accounting and legal fees, advertising, business taxes, fees, licences and dues, insurance, interest and bank charges, maintenance and repairs, meals and entertainment, office expenses, salaries and employer contributions, motor vehicle costs and prepaid expenses. Each comes with conditions, and your records must back the claim.
In most cases you can’t deduct personal and living expenses. Club dues fail too when the club’s main purpose is dining, recreation or sports.
Business expenses write off rules that trip people up
| Item | What the CRA says |
|---|---|
| Meals and entertainment | You can claim 50% of the amount you spent or a reasonable amount, whichever is less |
| Meals when travelling | The 50% limit applies as well |
| Capital items such as a desk or filing cabinet | Not a current expense, though capital cost allowance may apply |
| Capital repairs | Not deductible as repairs |
| Home workspace | Claimable only if it’s your main place of business, or you use it only for business and regularly meet clients there |
| Records | Keep them six years after the end of the last tax year they cover |
How much does a write off save you?
Picture an Ontario freelancer with $80,000 of net business income. On the self-employed tax calculator that means $13,233.57 of income tax and $8,892.90 of CPP, $22,126.47 in all.
Now say $6,000 more of business costs are allowed, so net income is $74,000. Income tax falls to $11,450.68 and CPP to $8,389.50. That’s $19,840.18, or $2,286.29 less.
A write off is not a refund of the $6,000. You still spent it. It just means the government takes less on the rest.
Can you write off part of your home?
Yes, if one of the two tests in the table is met. You can claim a share of costs such as heat, electricity, insurance, cleaning supplies and property taxes, plus mortgage interest and capital cost allowance. Divide the workspace area by the whole floor area to get your share.
Here’s a made-up case. An office of 120 square feet in a 1,200 square foot home is 10%, so $6,000 of eligible home costs gives $600. Your own figures will differ.
There’s a limit. Home costs can’t be more than your net business income before you deduct them, so they can’t create or increase a loss. Unused amounts carry forward to later years.
What about the meals you buy?
Say you spend $2,000 on client lunches. Only $1,000 is deductible. Rules can differ when a meal is billed on to a client or provided to all your employees, and we didn’t confirm those cases, so read the meals section of guide T4002 first.
Mistakes and limits
Mixing personal spending into the business account is the classic one. Buying equipment and claiming it all as a current expense is another, since capital items follow different rules. And skipping receipts costs you the claim when the CRA asks.
Our calculator has limits too. It doesn’t take business expenses as a separate field, so enter profit after expenses. It also leaves out GST/HST and EI, and instalments may apply once your tax bill is large, which the tax instalments calculator can estimate. To see your whole return, the income tax calculator takes several income types.
For the 2025 return, the self-employed filing date was June 15, 2026, though the balance was still due April 30. We couldn’t find 2026 dates yet.
Where the numbers come from
The rules are from CRA pages: the page on types of operating expenses, guide T4002, the business-use-of-home page and the business records page. The tax figures come from our calculators using 2026 federal and Ontario data.
Frequently asked questions
Can I write off meals in Canada?
You can claim 50% of what you spent, or a reasonable amount if that's less. The CRA applies the same limit to meals while travelling.
Can I write off part of my home?
Yes, if the space is your principal place of business, or you use it only for business and regularly meet clients there. You claim a share by area.
Can home costs create a business loss?
No. The CRA says the claim can't be more than your net business income before those costs, and you can carry the rest forward.
Is a new desk a business expense?
Not as a current expense. The CRA treats items like desks and filing cabinets as capital, so capital cost allowance may apply.
How long do I keep business records?
At least six years from the end of the last tax year they relate to, unless the CRA gives written permission to destroy them earlier.
- Self-employed taxes in Canada: income, CPP and GST
How tax works when you are self-employed in Canada: reporting income and expenses, paying both halves of CPP, instalments and when to register for GST
Information only. This page is general information, not tax, legal or accounting advice. Tax-Services.ca is an independent publisher: we don't prepare or file tax returns or offer tax services, and we have no connection with the CRA, Revenu Québec, any government or any company named on this page. Check the figures that matter with an official source or a qualified professional.