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Table of contents
TechNextPicks Editorial
Canada Edition
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Issue: Feb 2026
Expenses
T2125
Receipts
Business portion
Self-Employed Expense List Canada (2026): What to Track + Proof to Keep
Last updated: February 14, 2026
If you're self-employed in Canada, this guide explains what to claim, what to keep, and how to organize records for T2125. General information only, not tax advice.
If you're self-employed in Canada - freelancer, Uber driver, consultant, online seller, contractor, or small business owner - tracking expenses properly can significantly reduce your taxable income. But knowing what you can claim, how much you can deduct, and what proof the CRA requires can feel overwhelming.
This 2026 guide breaks it down clearly.
You'll learn:
- What business expenses you can claim on Form T2125
- Which expenses are fully deductible vs. partially deductible
- What receipts and documentation you must keep
- How GST/HST/QST affects your expense tracking
- Common mistakes that trigger CRA review
- How to stay organized all year (not just at tax time)
Whether you're filing your own taxes or working with an accountant, this guide helps you prepare clean records so tax season becomes simple and stress-free.
Keeping accurate expense records is not just about saving money - it protects you if the CRA ever asks for supporting documentation. In Canada, you are legally required to maintain proper business records, including receipts and invoices, typically for six years.
By the end of this guide, you'll know exactly:
- What to track
- What to keep
- What to ignore
- How to structure your records properly for T2125 reporting
Let's start with the fundamentals.
This list pairs with the T2125 guide. See
T2125 Guide Canada.
General info only. Not tax advice.
Quick rules (important)
- Claim the business-use portion only.
- Keep receipts, invoices, and vouchers.
- Expenses should be reasonable and tied to earning business income.
Expense Finder: Filter by your work style
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T2125: Advertising
Advertising and marketing
Costs to promote your business and attract customers.
Examples
- Online ads or sponsored posts
- Business cards or flyers
- Website hosting or landing pages
- Marketing tools or campaigns
Proof to keep
- Invoices or receipts
- Ad platform statements
- Marketing contracts
Common mistake: Claiming personal promotion or non-business campaigns.
T2125: Office expenses
Office supplies
Consumable items used for day-to-day business tasks.
Examples
- Paper, pens, and printer ink
- Labels or small shipping supplies
- Basic tools used for work
Proof to keep
- Store receipts
- Supplier invoices
Common mistake: Claiming personal household items.
T2125: Office expenses
Software and subscriptions
Apps and services used to operate your business.
Examples
- Accounting or invoicing software
- Design or editing tools
- Project management apps
Proof to keep
- Subscription invoices
- Payment confirmations
Common mistake: Including personal entertainment subscriptions.
T2125: Telephone and utilities
Phone and internet (business portion)
Business-use portion of phone, data, and internet service.
Examples
- Mobile plan business portion
- Home internet portion for work
- Extra data used for business
Proof to keep
- Monthly bills
- Usage notes or allocation
Common mistake: Claiming the full personal plan.
T2125: Professional fees
Professional fees
Fees for professional services that support your business.
Examples
- Accounting or bookkeeping services
- Legal advice
- Consulting related to business operations
Proof to keep
- Invoices
- Engagement letters
Common mistake: Claiming personal legal expenses.
T2125: Interest and bank charges
Bank fees and interest
Business bank charges and interest related to business borrowing.
Examples
- Business account service charges
- Loan interest (business portion)
- Payment processing fees
Proof to keep
- Bank statements
- Loan statements
Common mistake: Claiming personal banking fees.
T2125: Insurance
Insurance
Business-related insurance premiums.
Examples
- Commercial liability coverage
- Equipment or tool coverage
- Business-use vehicle insurance portion
Proof to keep
- Policy documents
- Payment receipts
Common mistake: Claiming personal-only insurance.
T2125: Rent
Rent or coworking
Costs for a dedicated business workspace or coworking.
Examples
- Office rent
- Coworking membership
- Studio or workshop rental
Proof to keep
- Lease or membership agreement
- Invoices or receipts
Common mistake: Claiming personal rent not used for business.
T2125: Utilities
Utilities (if applicable)
Business-use portion of utilities for a workspace.
Examples
- Electricity portion for workspace
- Heat or water portion for workspace
Proof to keep
- Utility bills
- Allocation notes
Common mistake: Claiming full household utilities.
T2125: Travel
Travel
Business-related travel costs.
Examples
- Flights for client work
- Hotels or accommodations
- Transit fares
Proof to keep
- Receipts
- Trip purpose notes
Common mistake: Claiming personal trips.
T2125: Meals and entertainment
Meals and entertainment
Meals or entertainment tied to business meetings or travel.
Examples
- Client lunch or coffee
- Business meeting meal
- Travel meal while working
Proof to keep
- Receipts with date and purpose
- Attendee notes
Only an allowable portion may be claimed. The common limit concept is 50% of eligible meals and entertainment.
Common mistake: Claiming personal dining.
T2125: Motor vehicle expenses
Motor vehicle
Vehicle costs used to earn business income.
Examples
- Fuel and maintenance
- Insurance (business portion)
- Lease or interest portion
Proof to keep
- Mileage log
- Receipts and invoices
- Odometer readings
Track total km and business km. A full logbook or a simplified logbook (after a base year) supports business-use calculations.
Common mistake: Claiming 100% of costs without a logbook.
T2125: Business-use-of-home expenses
Home office / workspace in home
Business-use portion of workspace costs in your home.
Examples
- Rent portion
- Utilities portion
- Internet portion
Proof to keep
- Floor plan or measurement notes
- Bills and statements
Use a reasonable method to calculate business-use portion based on space and time.
Common mistake: Claiming full household costs.
T2125: Other expenses
Training and education
Training that supports your business activities.
Examples
- Industry courses
- Workshops or certifications
- Business skills training
Proof to keep
- Course receipts
- Enrollment confirmations
Common mistake: Claiming unrelated personal education.
T2125: Capital assets / CCA concept
Equipment and tools
Tools or equipment used to earn business income.
Examples
- Hand tools or safety gear
- Computer or camera equipment
- Specialized instruments
Proof to keep
- Receipts
- Asset list or serial numbers
Some purchases may be handled differently than current expenses. Keep records and confirm treatment.
Common mistake: Treating large purchases as regular expenses.
T2125: Delivery and freight
Shipping, packaging, and platform fees
Costs to fulfill and deliver products.
Examples
- Shipping labels and postage
- Packaging supplies
- Marketplace or platform fees
Proof to keep
- Platform statements
- Shipping receipts
Common mistake: Mixing personal shipping costs.
Video guide
Expense categories walkthrough
Watch a short walkthrough on how to organize expense categories and keep proof. General info only.
External video
YouTube
Expense categories walkthrough
How to organize categories and keep records for cleaner year-end filing.
External video link for article-first indexing.
Watch expense walkthroughFull Self-Employed Expense Categories (Canada)
Each category below includes examples, proof to keep, and a common mistake to avoid.
T2125: Advertising
Advertising and marketing
Costs to promote your business and attract customers.
Examples
- Online ads or sponsored posts
- Business cards or flyers
- Website hosting or landing pages
- Marketing tools or campaigns
Proof to keep
- Invoices or receipts
- Ad platform statements
- Marketing contracts
Common mistake: Claiming personal promotion or non-business campaigns.
T2125: Office expenses
Office supplies
Consumable items used for day-to-day business tasks.
Examples
- Paper, pens, and printer ink
- Labels or small shipping supplies
- Basic tools used for work
Proof to keep
- Store receipts
- Supplier invoices
Common mistake: Claiming personal household items.
T2125: Office expenses
Software and subscriptions
Apps and services used to operate your business.
Examples
- Accounting or invoicing software
- Design or editing tools
- Project management apps
Proof to keep
- Subscription invoices
- Payment confirmations
Common mistake: Including personal entertainment subscriptions.
T2125: Telephone and utilities
Phone and internet (business portion)
Business-use portion of phone, data, and internet service.
Examples
- Mobile plan business portion
- Home internet portion for work
- Extra data used for business
Proof to keep
- Monthly bills
- Usage notes or allocation
Common mistake: Claiming the full personal plan.
T2125: Professional fees
Professional fees
Fees for professional services that support your business.
Examples
- Accounting or bookkeeping services
- Legal advice
- Consulting related to business operations
Proof to keep
- Invoices
- Engagement letters
Common mistake: Claiming personal legal expenses.
T2125: Interest and bank charges
Bank fees and interest
Business bank charges and interest related to business borrowing.
Examples
- Business account service charges
- Loan interest (business portion)
- Payment processing fees
Proof to keep
- Bank statements
- Loan statements
Common mistake: Claiming personal banking fees.
T2125: Insurance
Insurance
Business-related insurance premiums.
Examples
- Commercial liability coverage
- Equipment or tool coverage
- Business-use vehicle insurance portion
Proof to keep
- Policy documents
- Payment receipts
Common mistake: Claiming personal-only insurance.
T2125: Rent
Rent or coworking
Costs for a dedicated business workspace or coworking.
Examples
- Office rent
- Coworking membership
- Studio or workshop rental
Proof to keep
- Lease or membership agreement
- Invoices or receipts
Common mistake: Claiming personal rent not used for business.
T2125: Utilities
Utilities (if applicable)
Business-use portion of utilities for a workspace.
Examples
- Electricity portion for workspace
- Heat or water portion for workspace
Proof to keep
- Utility bills
- Allocation notes
Common mistake: Claiming full household utilities.
T2125: Travel
Travel
Business-related travel costs.
Examples
- Flights for client work
- Hotels or accommodations
- Transit fares
Proof to keep
- Receipts
- Trip purpose notes
Common mistake: Claiming personal trips.
T2125: Meals and entertainment
Meals and entertainment
Meals or entertainment tied to business meetings or travel.
Examples
- Client lunch or coffee
- Business meeting meal
- Travel meal while working
Proof to keep
- Receipts with date and purpose
- Attendee notes
Only an allowable portion may be claimed. The common limit concept is 50% of eligible meals and entertainment.
Common mistake: Claiming personal dining.
T2125: Motor vehicle expenses
Motor vehicle
Vehicle costs used to earn business income.
Examples
- Fuel and maintenance
- Insurance (business portion)
- Lease or interest portion
Proof to keep
- Mileage log
- Receipts and invoices
- Odometer readings
Track total km and business km. A full logbook or a simplified logbook (after a base year) supports business-use calculations.
Common mistake: Claiming 100% of costs without a logbook.
T2125: Business-use-of-home expenses
Home office / workspace in home
Business-use portion of workspace costs in your home.
Examples
- Rent portion
- Utilities portion
- Internet portion
Proof to keep
- Floor plan or measurement notes
- Bills and statements
Use a reasonable method to calculate business-use portion based on space and time.
Common mistake: Claiming full household costs.
T2125: Other expenses
Training and education
Training that supports your business activities.
Examples
- Industry courses
- Workshops or certifications
- Business skills training
Proof to keep
- Course receipts
- Enrollment confirmations
Common mistake: Claiming unrelated personal education.
T2125: Capital assets / CCA concept
Equipment and tools
Tools or equipment used to earn business income.
Examples
- Hand tools or safety gear
- Computer or camera equipment
- Specialized instruments
Proof to keep
- Receipts
- Asset list or serial numbers
Some purchases may be handled differently than current expenses. Keep records and confirm treatment.
Common mistake: Treating large purchases as regular expenses.
T2125: Delivery and freight
Shipping, packaging, and platform fees
Costs to fulfill and deliver products.
Examples
- Shipping labels and postage
- Packaging supplies
- Marketplace or platform fees
Proof to keep
- Platform statements
- Shipping receipts
Common mistake: Mixing personal shipping costs.
Quebec note (GST/QST)
If you are registered for GST/HST or QST, you may be able to recover tax paid on eligible purchases using ITCs or ITRs. Confirm details with official guidance.
Official sourceKeep learning
How to File GST/HST & QST
Sales tax basics and filing steps for Canada and Quebec.
Read the GST/HST/QST guideSelf-Employed Tax Installments Canada
Installments explained with planning tips and a risk checker.
Read the installments guideCPP vs QPP for Self-Employed
Planning-focused guide to CPP/QPP basics and cash flow.
Read the CPP/QPP guideSelf-Employed Vehicle Expenses Canada
Business-use rules, mileage logs, and proof to keep.
Read the vehicle guideFAQ
Can I claim home internet?
You can generally claim the business-use portion of phone or internet costs. Keep a reasonable allocation method.
Do I need receipts?
Yes. Keep receipts, invoices, and statements that support your claims.
How do I track vehicle expenses?
Track total km and business km. A logbook supports the business-use portion.
Are meals deductible?
Only an allowable portion may be claimable, and it must be related to earning business income.
Do I need a separate bank account?
It is strongly recommended. It keeps business and personal activity easier to separate.
Can I claim software subscriptions?
If the software is used for business, the business portion is usually the relevant part to track.
What about equipment purchases?
Some items may be treated differently than current expenses. Keep records and confirm treatment.
Do I need to register for GST/HST?
Registration depends on your revenue and activities. Review CRA guidance for the small supplier threshold concept.