Tax Deductions for Tutors and Online Teachers in Canada

If you tutor students one-on-one, run group sessions over video, or sell online courses and memberships, the CRA treats you as running your own business. Whether the money comes through a platform like Outschool, Preply, Wyzant, Teachable, Udemy, Skillshare, or Patreon, or directly from parents and students, you are a sole proprietor reporting on Form T2125 (Statement of Business or Professional Activities) with your personal T1 return. No platform withholds Canadian tax for you, so setting money aside and tracking your deductions carefully is what keeps real money in your pocket. For a broader walkthrough of the form, see our guide to reporting business income on the T2125.

This guide covers the deductions and the one tax issue that is specific to teaching: the GST/HST treatment of what you teach.

You Are Self-Employed

• You report income and expenses on the T2125, attached to your personal T1, and net income (line 9946) flows to line 13500 of the T1.
• Report your gross fees billed, then deduct platform commissions and processor fees as expenses. Do not just report the net amount that lands in your bank, or you understate both income and expenses.
• No tax is withheld, so you set money aside yourself for income tax and CPP.
• You pay both halves of CPP (11.9% combined for 2025 on net business income, up to the year's maximum), plus second additional CPP (CPP2) on earnings above the first ceiling. Half of your base CPP is a deduction and the other half is a non-refundable tax credit, while the full enhanced portion (your first-additional contributions and CPP2) is deductible.
• Your filing deadline is June 15, but any balance owing still accrues interest from May 1, so pay by April 30.
• Once your net tax owing tops $3,000, the CRA expects you to pay by quarterly instalments the following year, and charges instalment interest if you do not.

For the full timeline, see our guide to self-employed tax deadlines, and for the contribution mechanics, CPP when you are self-employed.

Advertising and Promotion (Line 8521)

Everything you spend to fill your schedule is deductible: Google and Facebook/Instagram ads, paid promotion on a tutor directory, listing-site fees, flyers, business cards, and your teaching website or landing page.

One rule to know: advertising aimed mainly at a Canadian market and placed with a foreign broadcaster is not deductible. Ordinary online ads on Google or Meta are fine.

Platform Fees, Software, and Subscriptions (Line 9270)

This is where most of an online teacher's running costs live, on the catch-all "other expenses" line for anything without a dedicated box.

Cost	Notes
Platform commissions	The cut Outschool, Preply, Wyzant, Teachable, Udemy, etc. take on each booking or sale
Payment-processor fees	Stripe and PayPal fees on payouts
Video conferencing	Paid Zoom or Google Meet tiers
Course hosting / LMS	Teachable, Thinkific, Kajabi
Scheduling and booking tools	Calendar and booking software
Cloud storage, e-signature	Storage for lesson materials, signing forms
Content licences	Online curriculum libraries, stock content, music or media licences

Platform commissions and processor fees are a real, deductible cost. Expense them rather than silently netting them against income, so the gross figure on your T2125 matches what the platforms report. For more on recurring digital costs, see tech and software costs.

Teaching Materials and Supplies (Line 8811)

The curriculum and lesson materials you consume in the work go on the supplies line:

• Workbooks, printed worksheets, and textbooks or reference books
• Whiteboards, markers, and flashcards
• Printer paper and ink
• Small classroom and lesson consumables

General consumable office costs not tied to a specific workspace (small stationery items) go on office expenses, line 8810. Bigger purchases like a laptop, webcam, or document camera are capital, not supplies, and go through CCA instead (covered below).

Technology and Equipment: Use CCA, Not a Full Write-Off

The gear that powers online lessons is a capital asset, so you deduct it over time through capital cost allowance, not all at once in the year you buy it.

Item	CCA class	Rate
Laptops, computers, tablets	Class 50	55% declining balance
Webcams, document cameras, microphones	Class 50	55% declining balance
Lighting, systems software	Class 50	55% declining balance
Desk, chair, bookshelves	Class 8	20% declining balance
Low-cost items, application software, library books	Class 12	100%
Vehicle owned for mobile tutoring	Class 10 / 10.1	30%

Class 50 carries the half-year rule, and the accelerated investment incentive and enhanced first-year rules can change how much you claim in the year of purchase. CCA is claimed on the business-use portion only, recorded in Area A and reported on line 9936. Selling an asset later can trigger recapture (income) or a terminal loss. Our capital cost allowance guide explains the mechanics in full.

Business-Use-of-Home (Line 9945)

If you tutor or teach from a dedicated workspace at home, you can deduct the business-use percentage of your home costs: rent, utilities, heat, home insurance, minor maintenance, and, if you own, mortgage interest and property tax. The percentage is based on the workspace area divided by total home area, prorated further by time if the space is shared.

Two limits matter. This deduction cannot create or increase a business loss; it is capped at your net income before home costs, and any unused portion carries forward indefinitely to a future year of the same business. For a home-based tutor it is often the single largest deduction, so support it with a reasonable area (and time) calculation. See our guide to home office deductions.

Telephone, Internet, and Utilities (Line 9220)

Deduct the business-use share of your cell phone and home internet used to deliver online lessons. Important: utilities and internet tied to the home workspace itself belong inside the business-use-of-home calculation above, not on line 9220. Claiming them in both places double-counts the cost.

Travel (Line 9200)

For mobile or in-home tutoring, the business-use share of your vehicle costs (fuel, insurance, maintenance, and CCA) is deductible, prorated by business kilometres and backed by a logbook, plus parking and transit to reach students. Keep personal commuting out of the claim. See vehicle expense tracking for the self-employed.

Meals and Entertainment (Line 8523)

Only 50% of food, beverage, and entertainment costs are deductible, for example a coffee meeting with a parent or a working meal while travelling for the business. Routine personal meals are never deductible.

Other Deductions

• Professional, accounting, and legal fees (line 8860): bookkeeping, tax preparation, and legal fees to set up or run the tutoring business.
• Insurance and dues (line 8690): commercial or professional liability insurance, plus teaching-association membership dues or required licences.
• Salaries and contractors (line 9060): wages to an assistant, and amounts paid to other self-employed tutors or freelancers you subcontract work to, with proper documentation.
• Professional development (line 9270): course fees, certification, and training that maintain or upgrade your teaching skills in your existing field are generally deductible. Training to enter a brand-new occupation may be treated as capital or personal and denied.

GST/HST

This is the issue that trips up tutors, because the GST/HST treatment follows what you teach, not who you are.

Under section 9 of Part III of Schedule V to the Excise Tax Act, a service of tutoring or instructing an individual is exempt from GST/HST only where the course is approved for credit by, or follows a curriculum designated by, a school authority (an organization operating a provincially-recognized elementary or secondary school), a prescribed equivalent, or a mandatory prerequisite to such a course. Music lessons are prescribed as equivalent and are always exempt.

So:

• Exempt supplies: coaching a student in a school-curriculum subject (math, science, French at the provincial-curriculum level) or giving music lessons. You charge no GST/HST, but you also cannot claim input tax credits on related purchases.
• Taxable supplies: instruction that falls outside that rule, which is the normal case for general online courses, hobby and skills classes, test prep not tied to a designated curriculum, business or coding bootcamps, and pre-recorded courses or memberships sold as digital products.

For courses leading to a certificate or diploma attesting competence to practise a trade or vocation, the vocational-school rules (section 8) can exempt them, and a supplier can elect under section 6 to make certain credential and exam-instruction supplies taxable.

Registration. There is no special mandatory-registration rule for tutors (unlike taxi or ridesharing drivers). You must register once your worldwide taxable (non-exempt) supplies exceed $30,000 in a single calendar quarter or over four consecutive calendar quarters. Only taxable supplies count toward that threshold. A tutor making only exempt supplies generally cannot and should not register, and simply pays GST/HST on inputs as part of the deductible business cost.

Mixed streams. If you do both, track them separately. A tutor with $25,000 of exempt curriculum tutoring and $10,000 of taxable general courses is over the threshold on the taxable stream and may need to register for it, then charge tax on the taxable courses and apportion input tax credits to that commercial activity only. Our guide to GST/HST input tax credits explains how ITCs work.

Common Mistakes

1. Reporting only net platform payouts as income. Report gross fees billed and deduct the platform commission and processor fees separately, or you understate both income and expenses.
2. Assuming all tutoring is GST/HST exempt. Only school-curriculum or credit tutoring and music lessons are exempt; general online courses, test prep, and skills coaching are usually taxable and count toward the $30,000 threshold.
3. Charging GST/HST on exempt tutoring, or registering when all supplies are exempt. That creates an obligation to collect tax you should never have charged.
4. Claiming ITCs on purchases used for exempt tutoring. Input tax credits are only available for inputs used in taxable (commercial) activity.
5. Expensing a laptop, tablet, webcam, or camera in full. These go to CCA Class 50 (55% declining balance, with the half-year and accelerated rules in year one).
6. Using business-use-of-home to create or increase a loss. It is capped at net income before home costs; the excess carries forward.
7. Double-counting home internet and utilities on both line 9220 and inside the home-office calculation.
8. Deducting 100% of mixed-use costs. Cell phone, internet, vehicle, and home costs are claimed at the business-use percentage, supported by a logbook or reasonable basis.
9. Forgetting CPP at 11.9% on net business income (plus CPP2), owed on top of income tax.
10. Missing the April 30 payment date, or skipping required instalments once net tax owing tops $3,000.
11. Deducting 100% of meals or the cost of everyday personal meals. Only 50% of legitimate business meals and entertainment is allowed.

What Good Records Look Like

For each tax year you should have a record of your gross fees from every source (each platform and any direct payments from parents or students), the platform and processor fees deducted, software and subscription invoices, receipts for teaching materials and equipment (the cost drives the CCA class), your home-office area calculation, a vehicle logbook if you tutor in person, and, if you have mixed teaching, separate tracking of your exempt versus taxable streams with your GST/HST records. Keep everything for six years from the end of the tax year. For a checklist of what is claimable across the form, see what you can claim on the T2125.

Sources

1. CRA: T2125 Statement of Business or Professional Activities
2. CRA: Expenses section of form T2125
3. CRA: Line 8521 -- Advertising
4. CRA: Line 8811 -- Office stationery and supplies
5. CRA: Other business expenses (line 9270)
6. CRA: Business-use-of-home expenses
7. CRA: Classes of depreciable property (CCA classes incl. Class 50)
8. CRA: GST/HST Memorandum 20-6 -- Tutoring and Equivalent Services
9. CRA: GST/HST Memorandum 20-4 -- Vocational Schools and Courses
10. CRA: When to register for and start charging the GST/HST
11. CRA: Input tax credits
12. CRA: CPP contribution rates, maximums and exemptions
13. CRA: Due dates and payment dates -- Personal income tax
14. CRA: Who has to pay -- Required tax instalments for individuals