What business expenses can I deduct as a self-employed person in Ontario?

Self-employed individuals can deduct expenses that are incurred to earn business or professional income, as long as those expenses are reasonable. Common deductible categories include advertising and marketing costs, professional fees (accounting, legal), office supplies, telephone and internet costs allocated to business use, business insurance, bank charges, and relevant software subscriptions.

Other allowable expenses include salaries paid to employees (including family members at a reasonable rate), professional dues, and the cost of goods sold. Capital items — like computers or equipment — are generally not deducted outright but are claimed through Capital Cost Allowance (CCA), which spreads the deduction over time according to CRA depreciation classes.

A fundamental rule is that personal expenses are not deductible, and mixed-use expenses (like a phone used for both personal and business purposes) must be allocated reasonably. The CRA may request receipts and records to support claimed deductions, so keeping organized documentation is essential. If an expense seems borderline, a conservative approach avoids audit risk.