What Expenses Can I Claim on the T2125?
Updated 2026-10-06
If you’re self-employed in Canada, Form T2125 (Statement of Business or Professional Activities) is where you report your income and claim your expenses against it. Part 5 of the form lists specific expense categories, each with its own line number — using the right one matters for matching your bookkeeping to what the CRA expects to see.
The standard expense lines
| Line | Category |
|---|---|
| 8521 | Advertising |
| 8523 | Meals and entertainment (50% limit — see below) |
| 8590 | Bad debts |
| 8690 | Insurance |
| 8710 | Interest and bank charges |
| 8760 | Business tax, fees, licences, dues, memberships and subscriptions |
| 8810 | Office expenses |
| 8811 | Supplies |
| 8860 | Legal, accounting and other professional fees |
| 8871 | Management and administration fees |
| 8910 | Rent |
| 8960 | Maintenance and repairs |
| 9060 | Salaries, wages and benefits (to employees, not to yourself) |
| 9180 | Property taxes |
| 9200 | Travel (transportation, accommodations, allowable part of meals) |
| 9220 | Telephone and utilities |
| 9224 | Fuel costs (other than for motor vehicles) |
| 9275 | Delivery, freight and express |
| 9281 | Motor vehicle expenses (not including CCA — see below) |
| 9936 | Capital cost allowance (CCA, i.e. depreciation on equipment/vehicles) |
| 9270 | Other expenses (anything that doesn’t fit the categories above) |
Two categories with special rules
Meals and entertainment (line 8523) are only 50% deductible in almost all cases — if you spend $100 taking a client to lunch to discuss a project, $50 is the deductible amount, not $100. There are narrow exceptions (e.g., meals provided to all employees at a general event), but the 50% limit is the default assumption for client meals and working lunches.
Motor vehicle expenses (line 9281) can only be claimed for the business-use portion of the vehicle — track your business kilometres against total kilometres driven (a mileage logbook) and apply that percentage to fuel, insurance, maintenance, and lease or loan interest. Depreciation on a vehicle you own is claimed separately as CCA (line 9936), not as a line 9281 expense.
Business-use-of-home expenses
If you work from home, a separate section of the form lets you claim a portion of home expenses — heat, electricity, insurance, maintenance, mortgage interest or rent, and property taxes — based on the percentage of your home’s square footage used for business. This is calculated separately from the Part 5 categories above and entered at the bottom of the form.
This is general information, not tax advice, and the form and its line numbers can change year to year. Verify your specific situation against the current CRA form and guide linked above, or with an accountant, before filing.
Sources
This is general information, not tax advice, and rules change. Verify your specific situation against the sources above or with an accountant.
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