Capital cost allowance lets you deduct a big-ticket business asset gradually, not all at once. Each asset sits in a CCA class with its own rate, and most classes use declining balance: each year's deduction is the rate times the remaining value. For something bought new in 2026, the Accelerated Investment Incentive usually lets you claim the full rate in year one. Pick a class below to see the whole schedule.
Computers, tablets, phones, and systems software. Declining-balance rate: 55%.
Most assets bought new in 2026 qualify for the Accelerated Investment Incentive — the half-year rule is suspended, so you claim the full rate in year one.
First-year CCA deduction
$1,100
55% declining balance, full first year — $1,963 claimed over 5 years.
CCA is optional — you can claim any amount up to the maximum, or none, to save room for a higher-income year. It's claimed in Area A of Form T2125. When you sell the asset, the difference between the sale price and the remaining UCC can trigger recapture (added to income) or a terminal loss (deducted).
Estimate only, on the 2026 rules. It doesn't model the special immediate expensing for zero-emission vehicles (Class 54/55) or full expensing for manufacturing (Class 53) and clean energy (43.1/43.2), GST/HST input tax credits, or business-use proration (a vehicle used 60% for business claims 60% of the CCA shown). Not tax advice — see the Sources below and confirm with a Canadian accountant.
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A worked example
Say you buy a $2,000 laptop for your business in 2026. That's Class 50, a 55% declining-balance rate, and it qualifies for the Accelerated Investment Incentive — so you claim the full rate in year one:
Year one deducts $1,100 — the full 55%. Each later year deducts 55% of what's left, so the deduction tapers. Under the old half-year rule, year one would have been only $550. That accelerated first year is the incentive at work.
Sources
Every class rate and first-year rule in this calculator is drawn directly from the CRA, verified against the live pages below:
- CRA — Classes of depreciable property (CCA classes and rates)
The class list and declining-balance rates (Class 8 20%, 10 30%, 50 55%, and the rest).
- CRA — Accelerated Investment Incentive
The enhanced first-year allowance, the suspension of the half-year rule, and the 2024–2027 phase-out.
- Department of Finance — 2026 Automobile Deduction Limits
The 2026 Class 10.1 passenger-vehicle ceiling of $39,000 before tax.
Keep going
Depreciating a car? Pair this with the business vehicle expense calculator and the vehicle expenses guide. Add your home office deduction, size your monthly set-aside with the tax set-aside calculator, and see the whole picture in the guide to self-employed taxes in Canada.
People also ask
What is capital cost allowance (CCA) in Canada?
Capital cost allowance is how the CRA lets you deduct the cost of a lasting business asset — a computer, a work vehicle, tools, furniture — over several years instead of all at once. Each asset belongs to a class with its own rate, and most classes use the declining-balance method: each year you deduct the rate times the remaining undepreciated capital cost (UCC). It is claimed in Area A of Form T2125.
What is the Accelerated Investment Incentive?
For most property acquired after November 20, 2018 and available for use before 2028, the Accelerated Investment Incentive suspends the old half-year rule. During the 2024–2027 phase-out, an asset that would normally be subject to the half-year rule gets an enhanced first-year allowance of two times the normal first-year amount while the half-year rule stays suspended — which works out to CCA at the full class rate on the full cost in year one. That is the "Accelerated (full rate)" option in this tool, and it is the usual choice for something you bought new in 2026.
What is the half-year rule?
The half-year rule limits you to claiming CCA on only half the cost of an asset in the year you acquire it. It still applies to property that does not qualify for the Accelerated Investment Incentive — for example something bought from a non-arm’s-length party. Use the "Half-year rule" option in this tool for those cases.
What CCA class is a computer or a vehicle?
Computers, tablets, phones, and systems software are Class 50 at 55%. A car or work vehicle costing up to the price ceiling is Class 10 at 30%; a passenger vehicle costing more than $39,000 (2026) is Class 10.1 at 30%, with the cost capped at that ceiling. Furniture, tools worth $500 or more, and most equipment are Class 8 at 20%. Buildings are usually Class 1 at 4%.
Do I have to claim the maximum CCA every year?
No. CCA is optional and flexible — you can claim any amount from zero up to the maximum. In a low-income year many self-employed people claim little or no CCA, saving the deduction for a future higher-income year when it is worth more. Whatever you do not claim stays in the pool and keeps depreciating.
What happens to CCA when I sell the asset?
When you sell, you compare the proceeds to the remaining UCC in the class. If you sold for more than the UCC, the difference is "recapture" and gets added back to your income; if for less, you may claim a "terminal loss". A Class 10.1 passenger vehicle is an exception — it has neither recapture nor a terminal loss. This calculator projects the deduction only; it does not model the sale.
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