What You Can (and Can’t) Write Off as a Small Business in Canada

Running a small business in Canada comes with plenty of perks — and one of the most powerful is the ability to deduct legitimate expenses from your taxable income. But not everything you spend money on qualifies. Let’s break down what you can write off, what you can’t, and how to stay on the CRA’s good side.

What You Can Write Off

These are common, CRA-approved deductions that reduce your taxable income:

1. Office Supplies & Equipment

• Pens, paper, printer ink

• Computers, monitors, and software

• Furniture (desk, chair) if used for business

2. Vehicle Expenses

• Fuel, maintenance, insurance, lease payments

• Must track mileage and separate personal vs business use

3. Meals & Entertainment

• 50% of meals with clients or for business travel

• Must document who you met and the business purpose

4. Home Office Expenses

• Portion of rent/mortgage interest, utilities, internet

• Must have a dedicated workspace used exclusively for business

5. Marketing & Advertising

• Website costs, social media ads, flyers

• Sponsorships with a clear business benefit

What You Can’t Write Off

Some expenses are tempting but don’t qualify:

• Personal groceries or clothing (even if worn at work)

• 100% of meals or entertainment

• Fines, penalties, or illegal activities

• Life insurance premiums (unless required for a loan)

Pro Tips

• Keep detailed receipts and notes for every expense.

• Use accounting software or hire a bookkeeper to stay organized.

• When in doubt, reach out and ask.