Laptop, Phone or Tool in Canada: Expense or CCA Write-Off?

Can I deduct a cell phone or laptop as an expense, or does it go through CCA?

A laptop or phone is a capital asset: you claim its cost as capital cost allowance (CCA), not as an ordinary expense (Guide T4002, chapter 3). CCA is a yearly deduction set by class, and you choose how much to claim (CRA: basic information). In the first year a new Class 50 laptop can be claimed up to 100% of its cost and a new Class 8 phone up to 30%, if the incentives below apply; without them it is half the class rate.

Two other costs are treated differently. A tool costing less than the Class 12 limit also goes through CCA, but the claim is generally its whole cost in the year. The phone plan and minor repairs are ordinary expenses; see the list below.

A case is not simple if you owned the device before the business, use it for both business and personal life, have several devices, run a corporation, or bought devices in earlier years and recorded them as expenses. Gather the invoice, purchase date, date business use began, business-use share, and last year's CCA schedule if one exists. These are the federal rules; a Quebec return is also filed with Revenu Québec, which this page does not cover. This page is for a business or a corporation; an employee's claim follows different rules, starting with the CRA's guide T4044.

What counts as an expense instead?

• Phone plan airtime: deduct the business-use percentage on line 9220 (Guide T4002, chapter 3).
• Minor repair or maintenance: the cost of labour and materials is deductible, and an expense that simply restores a property to its original condition is usually a current expense (Guide T4002, chapter 3).
• A repair that improves the device beyond its original condition: probably a capital expense, so it goes through CCA (Guide T4002, chapter 3).

Which CCA class does a laptop or a phone go in?

A laptop is computer hardware in Class 50. The CRA lists electronic telephone equipment, which includes a cell phone, in Class 8.

The CRA pages and the Regulations name telephones, not tablets. Have a professional confirm a tablet's class before you file.

For Class 8 telephone equipment costing at least $1,000 each, you can elect a separate class by attaching a letter to the return for the year you acquired it. The rate stays the same, but the class runs five years, and when all its property is disposed of the remaining balance is a terminal loss (Regulations, 1101(5p) and (5q); CRA: classes).

For how classes pool year after year, see capital cost allowance on equipment, vehicles and buildings.

Where is the tool line, and is a laptop or phone ever a small tool?

A tool costing less than $500 goes in Class 12; a tool costing that or more goes in Class 8 (CRA: classes). Test each tool on its own cost. Most small tools in Class 12 are not subject to the half-year rule, so the full cost is claimable in the year (Guide T4002, chapter 4).

A laptop or phone does not count as a small tool, whatever it costs. Class 12 excludes an electronic communication device or electronic data processing equipment that can be used for any purpose other than measuring, locating and calculating (Regulations, Schedule II, Class 12(h)). A device limited to those jobs, such as a calculator, is not excluded. Drills and hand tools are the usual Class 12 items.

How much of a laptop or phone can I write off in the first year?

The table gives the most you can claim in the first year on the business-use cost, for a full-year fiscal period and with no sale or other disposal in the same class; a disposal can reduce the figure (see selling a business asset). Where no incentive applies, the half-year rule limits the claim to half the class rate (CRA: basic information).

The CRA's guide T4002 and classes page still call the Class 50 deduction proposed. The Budget 2025 Implementation Act, No. 1 amended the Income Tax Regulations to include it, and the consolidated Regulations show it. Where the two differ, the Regulations govern; confirm the current position before you file. A computer available for use in 2027 or later does not get it, though a qualifying one still skips the half-year reduction (section 1100(2)), and a tax year that straddles that cutoff gets a blended factor (section 1100(2.011)).

The Department of Finance has also proposed immediate expensing for most depreciable property acquired from September 15, 2026; it is not law (Finance release). For status and timing, see buying equipment before year-end.

If your first fiscal period is shorter than 365 days, such as when you start freelancing mid-year, the CCA claim is prorated by the days in the period (CRA: basic information; Guide T4002, chapter 4).

Do I have to claim the full CCA every year?

No. You can claim any amount from zero to the maximum for the year (Guide T4002, chapter 4). What you skip is not lost: it stays in the class balance still waiting to be claimed (the undepreciated capital cost) and is available in later years (CRA folio S3-F4-C1). The enhanced first-year amount applies only in the year the item becomes available for use; skip it, and later years claim at the ordinary class rate (Regulations, section 1100(2)).

Can I claim CCA on a laptop I bought years ago, before I started freelancing?

You may be able to claim CCA from the day you start using it to earn income. Its starting cost is generally its market value that day if that is below what you paid. The Act treats you as acquiring property bought for another purpose, once you use it to earn income, at a capital cost no higher than its fair market value at that time (Income Tax Act, 13(7)(b)). The CRA's form instructions say the same (Guide T4002, chapter 4). If you bought it before you became a Canadian resident, the Act treats you as acquiring it at its market value on the day you became resident (Income Tax Act, 128.1(1)(b) and (c)); see your first year as a Canadian tax resident.

The drop in value before business use is not deductible: the Act treats a loss on personal-use property as nil (Income Tax Act, 40(2)(g)). If the item is worth more than it cost, which is unusual for a laptop or phone, a capital gain can arise and the starting cost follows a different formula in 13(7)(b) (CRA: personal use of property). The owner can instead elect under Income Tax Act, 45(2), by a signed letter filed with the return for the year business use begins. The Act then treats business use as not begun, and the CRA says CCA should not be claimed while the election stands (Folio S1-F3-C2, paragraphs 2.48 and 2.51, written for homes). Take that case to a professional.

CCA starts when the property is available for use. The Act treats that as the earliest of several times, including when you first use the property to earn income and when it is delivered and can be used to perform a service (Income Tax Act, 13(27)). For gear moved in from personal life, you are treated as acquiring it when business use begins, so the date business use began sets the tax year of your first claim.

The CRA says the half-year rule applies to personal property, such as a personal computer, that you transfer into your business (Guide T4002, chapter 4). Whether a first-year incentive also applies turns on section 1104(4.01): property acquired after 2024 qualifies if no one claimed CCA on it before you acquired it, or if neither you nor a person you do not deal with at arm's length owned it before. Section 1100(2.021) keeps costs incurred before 2025 out of the enhanced amount in the first case. So gear bought before 2025 is likely limited to the half-year amount; gear bought in 2025 or later and moved in afterwards is the case to confirm. Have a professional confirm it before you claim more than the half-year amount; see Different for you? below. The proposed immediate expensing would not reach gear you owned before.

How do I claim a phone or laptop that is also personal?

CCA is allowed only on the business share. The Act treats you as acquiring, for earning income, the proportion of the property equal to the share of its regular use that is for earning income, at the same proportion of its cost (Income Tax Act, 13(7)(c)). On Form T2125 you enter the total cost, the personal part and the business part (Guide T4002, chapter 4).

Use a measure you can support and write down how you reached the percentage. If your business use later rises, the Act treats the increase as a new acquisition of that share. If it falls, the Act treats you as having disposed of the dropped share at its share of market value, which can make earlier CCA taxable recapture even though you keep the device (Income Tax Act, 13(7)(d)); see selling a business asset. Phone-plan airtime follows the same idea: deduct the business-use percentage (Guide T4002, chapter 3). For internet and other mixed-use costs, see business use of home for the self-employed.

Does a corporation treat a laptop, phone or tool the same way?

Yes. A corporation uses the same classes, rates and tool line. It calculates CCA on Schedule 8 (CRA: Schedule 8) and deducts the total on line 403 of Schedule 1. Like an individual, it can claim any amount up to the maximum, and it prorates the claim for a tax year shorter than 365 days (T2 guide, chapter 3). If a shareholder also uses a corporate phone or laptop personally, that use can be a taxable benefit to the shareholder (Income Tax Act, 15(1)). This page does not cover it; raise it before you file.

The amortization in a corporation's financial statements is a separate figure from CCA; see amortization and CCA in corporate books. Gear that moves from an owner into a corporation is a different transfer from the change of use above; see books after incorporating a sole proprietorship.

How do I categorize and record a laptop, phone or tool in the books?

Books usually record each laptop and phone in an asset account such as equipment, not an expense account, with one asset list used to work out CCA.

• Asset list: one line per item with the invoice date, cost, class, date business use began and business-use share.
• Cost: the full cost of acquiring it (CRA: basic information). If you claimed an input tax credit on the purchase, subtract it before entering the cost for CCA (Guide T4002, chapter 4). For tax paid before registering, see claiming GST/HST paid before registering.
• CCA: worked out once a year, by class, from the list. It goes on line 9936 of Form T2125 for a self-employed person, or on Schedule 8 for a corporation.
• Tools under the limit: the Class 12 claim is the full cost in the year, so the tax result matches an expense. Keep the tool on the list so a later sale or scrap is recorded; see selling a business asset.
• Other expenses: for which T2125 line each one goes on, see self-employed expense lines in Canada.

What should I keep for a laptop, phone or tool?

Keep the invoice, the purchase date, the date business use began, and the business-use share with a note of how you worked it out. For gear you owned before, add the market value on the date business use began and how you set it, such as listings for the same model in similar condition. Keep the prior year's CCA schedule too. For retention periods and receipts, see how long to keep business records and CRA receipt requirements.

Example

These examples are illustrative and use Canadian dollars. They assume a full-year fiscal period (a shorter first period prorates the claim), no opening class balance, other additions or disposals, business use only unless stated, and purchase amounts after any recoverable sales tax. New items are available for use before the cutoffs in the table above.

A new laptop bought in March

A designer in Ontario buys a C$1,800 laptop in March, after any input tax credit, and uses it for clients at once. It is Class 50. If the Regulations' Class 50 rule applies, the largest first-year claim is the whole C$1,800; the half-year rule alone would cap it at C$495 (C$1,800 x 55% x 1/2). She claims on line 9936 of Form T2125 and may choose any amount from zero to that maximum. Anything she skips stays in the class balance.

A laptop owned for years

A freelancer paid C$2,000 for a laptop three years ago for home use. It is worth about C$700 when she starts billing clients, and she uses it 80% for business. Her starting cost is C$700, the lower figure, not C$2,000, and the C$1,300 drop is not deductible. The business part is C$560 (C$700 x 80%). She bought it before 2025, so the enhanced first-year amount most likely does not reach it. The half-year amount is C$154 (C$560 x 55% x 1/2). Had she bought it in 2025 or later, whether an incentive applies is the point to confirm first.

A drill, a saw and a tablet

A small corporation buys new a C$450 drill, a C$650 saw and a C$450 tablet. The drill costs less than C$500, so it is Class 12 and the full C$450 is generally claimable in the year. The saw is Class 8 at 20%; if the Class 8 first-year rule in the table above applies, its first-year maximum is C$195 (C$650 x 20% x 1.5). The tablet costs the same as the drill but is not a Class 12 tool, because the Regulations exclude an electronic device with uses beyond measuring, locating and calculating. If it works as a general-purpose computer, it is Class 50. The corporation claims all three on Schedule 8.

Different for you?

• You deducted a laptop or phone as an expense, in this year's books or on a return already filed: the amount may belong in CCA instead, which can change the books and the return. See catching up on overdue books and get bookkeeping help.
• You have several devices, gear moved in from personal life, or no asset list: the list and the CCA schedule have to be built from the invoices. See bookkeeping help.
• You paid for a device yourself and your corporation uses it, or the corporation paid and you also use it personally: see business expenses paid personally and personal expenses paid by the corporation.
• You are selling, scrapping or replacing the item: see selling a business asset for recapture and terminal loss.
• You are deciding when to buy: see buying equipment before year-end.
• You paid GST/HST before registering: see claiming GST/HST paid before registering.
• You are claiming a car or truck: see buying a car through your business.
• You want to know whether the CRA accepts a cost at all: see business expenses the CRA accepts.