The short answer: most everyday costs (advertising, insurance, professional fees) go straight onto their own T2125 line at 100%. Three categories get prorated instead — meals and entertainment at a flat 50%, vehicle costs by your business-km share, and home-office costs by your workspace’s area share. Anything that lasts for years — a laptop, furniture, a vehicle — is capitalized and depreciated through CCA instead of deducted in one shot. Search below for your exact expense.
Type an expense, tap an example, or pick a category to see its T2125 line.
Estimate, not advice — a curated list of the expenses self-employed Canadians meet most often, not every line on Form T2125. Confirm anything unusual, or anything large, with a Canadian accountant or the CRA.
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Why the same receipt can land on different lines
Form T2125 doesn’t ask “what did you buy” — it asks “what kind of cost was this, and how much of it was really for the business.” A $60 dinner with a client and a $60 dinner alone are the same receipt, but only one of them belongs on line 8523, and even then only at 50%. A $2,000 laptop and a $200 keyboard both go toward “computer equipment,” but only the laptop gets capitalized — the keyboard, if it’s a separate purchase under $500, can be written off in full the year you buy it.
Four rules cover almost everything a self-employed Canadian runs into:
| 100% deductible | Advertising, insurance, professional fees, dues, rent, most operating costs | The full amount, once — no proration. |
| 50% (meals & entertainment) | Client coffee, lunch, dinner, event tickets | Line 8523: 50% of the lesser of cost or a reasonable amount. |
| Prorated by business-km share | Fuel, insurance, repairs, loan interest, lease payments | Line 9281: business kilometres ÷ total kilometres. |
| Prorated by workspace area/time | Rent, mortgage interest, utilities, insurance for a home workspace | Line 9945: workspace area ÷ home area (× hours/24 if shared). |
| Capitalize — claim CCA | Laptops, furniture, vehicles, equipment that lasts for years | Line 9936: the CRA class rate, applied to the undepreciated balance. |
Vehicle and home-office math get their own dedicated calculators — business vehicle expense calculator and home office expense calculator, or the full write-ups on claiming vehicle expenses and business-use-of-home expenses. For a capital item’s year-by-year write-off, use the CCA calculator.
People also ask
What is Form T2125?
Form T2125, "Statement of Business or Professional Activities," is the CRA form self-employed Canadians file with their T1 return to report business or professional income and expenses. It has dedicated line numbers for each expense category — advertising, meals and entertainment, insurance, motor vehicle expenses, and so on.
How do I know which T2125 line an expense goes on?
CRA groups expenses into named categories, each with its own line number — for example advertising is line 8521, and meals and entertainment is line 8523. This tool matches what you typed against a curated table of common self-employed expenses and shows you the line, the label, and the deductible-share rule that applies.
Why are some expenses only "partly" deductible?
Three different limits show up depending on the expense. Meals and entertainment are capped at 50% by the CRA, full stop. Vehicle costs are prorated by your business kilometres ÷ total kilometres. And home-office costs are prorated by your workspace’s area (and hours, if the space is shared with personal life) as a share of the whole home.
What does "capitalize it — claim CCA" mean?
Some purchases — a laptop, office furniture, a vehicle — aren’t deducted all at once. The CRA calls these capital property, and you write off their cost gradually as capital cost allowance (CCA), on line 9936, using the class rate assigned to that type of property. Small items under $500 (most tools, kitchen utensils, non-systems software) are the exception — Class 12 lets you write off the full cost the year you buy them.
Are meals with a client really only 50% deductible?
Yes. The CRA caps food, beverage and entertainment expenses at 50% of the lesser of what you actually paid or a reasonable amount for the circumstances — there’s no way around this cap for a sole proprietor’s client meals.
Is this tool official tax advice or CRA software?
No. It’s a curated reference built from CRA’s own line-by-line guidance for the expenses self-employed Canadians meet most often — not every possible expense, and not a substitute for Guide T4002 or a Canadian accountant. If your situation is unusual or the amount is large, confirm with a professional or the CRA.
Sources
Every line number and CCA class in this tool is transcribed directly from the CRA, verified 21 September 2026:
- CRA — Expenses section of form T2125 — the master index of every Part 4 expense line, 8521 through 9270.
- CRA — Classes of depreciable property — CCA class rates (Class 1 4% · 8 20% · 10/10.1 30% · 12 100% · 14.1 5% · 16 40% · 43 30% · 46 30% · 50 55%).
- CRA — Line 8523, Meals and entertainment — the 50% limit.
- CRA — Motor vehicle expenses (not including CCA) — line 9281, the parking/commuting/supplementary-insurance rules.
- CRA — Business-use-of-home expenses — line 9945.
- Dept. of Finance — 2026 Automobile Deduction Limits — the $39,000 Class 10.1 ceiling, $350/month interest cap, $1,100/month lease cap.
Every row in the tool also links its own specific CRA source — open any result to check it.
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