Free tool · Canadian self-employed
Home office deduction calculator
If you run your business from home, a share of your rent or mortgage interest, utilities, insurance, and upkeep is deductible on your T2125. Enter your workspace size and yearly costs to estimate what you can claim, with the CRA’s loss limit and carryforward built in.
1 · Your workspace
2 · Your yearly home costs
Enter the full-home annual amounts. We apply your business-use share. Renters use rent; owners use mortgage interest and property tax (never mortgage principal).
3 · Net business income (optional)
Your net self-employment income before this deduction. The home-office deduction can’t create or increase a loss, so we cap it at your income and carry the rest forward.
Fill in your space and costs
We need your workspace size, home size, and at least one yearly cost to estimate the deduction.
How the deduction is figured.
Your business-use share
Workspace area divided by your home’s total area. A room used only for business counts fully; a shared space (a dining table office) is reduced by the hours it is actually used for work.
Eligible costs
Heat, electricity, water, home insurance, maintenance, and either rent or mortgage interest plus property taxes. Mortgage principal never counts, it is a capital repayment, not an expense.
The loss limit
The deduction can’t create or increase a business loss. It is capped at your net income for the year, and anything you can’t use carries forward to a future year.
Uses the CRA detailed business-use-of-home method for the self-employed (Form T2125, line 9945). The temporary $2/day flat-rate method was for employees and ended after 2022. Always confirm with the CRA or your accountant. Nothing here is tax advice. Source: canada.ca, business-use-of-home expenses.
Questions
- How is the home office deduction calculated for self-employed Canadians?
- Take the area of your workspace divided by the total finished area of your home to get your business-use percentage. If the space is also used personally, you further reduce it by the share of hours it is used for business. Multiply that percentage by your eligible home costs for the year. This goes on Form T2125, line 9945.
- What home expenses can I include?
- Heat, electricity and water, home insurance, maintenance and repairs, and either rent (if you rent) or mortgage interest and property taxes (if you own). You can also include a reasonable portion of internet. You cannot include mortgage principal, which is a capital repayment, not an expense.
- What is the difference between this and the $2/day method?
- The temporary $2/day flat-rate method was for employees working from home during 2020 to 2022 and is no longer available. Self-employed people use the detailed business-use-of-home method, which is what this calculator uses, and there is no $500 cap on it.
- Can the home office deduction create a loss?
- No. Business-use-of-home expenses cannot be used to create or increase a business loss. You can only deduct up to your net business income for the year; any unused amount carries forward and can be claimed in a future year, subject to the same limit.
- Are these results official?
- No. This is a representative estimate based on the CRA's detailed business-use-of-home method. Your situation may have nuances, so confirm with the CRA or your accountant. Nothing here is tax advice.
It is one of many deductions
Your home office, and everything else you can write off.
Claimable tracks your home-office claim with the loss limit and carryforward handled for you, and sits it next to your scanned receipts, vehicle log, and CCA, each mapped to the right CRA line on your T2125 for a clean hand-off at tax time.
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