Running a small business in Canada is exciting — but it also comes with its challenges, especially during tax season. The good news? Knowing the right tax deductions can save you thousands and help your business grow.
At Track Accounting, we help entrepreneurs and small businesses stay on top of their finances while maximizing tax savings. Here’s your ultimate guide to the top tax deductions for Canadian small businesses in 2025, with practical tips to make the most of them.
If you operate your business from home, you can deduct a portion of your household costs, such as:
Tip: Calculate the percentage of your home used for business. For example, if your office is 200 sq. ft. in a 2,000 sq. ft. house, you can deduct 10% of eligible expenses.
If you use your vehicle for business, you can deduct:
Business travel, like flights, hotels, and meals for client meetings or conferences, is also deductible.
Tip: Keep a mileage log to separate business and personal use. Apps like MileIQ or QuickBooks Mileage Tracker make this easy.
Hiring professionals to help your business is fully deductible. This includes:
Tip: Consider these services an investment — professional guidance often saves more than it costs.
Everyday supplies like stationery, printer ink, or software subscriptions are deductible. Larger items such as computers, office furniture, or machinery are claimed through Capital Cost Allowance (CCA) over time.
Tip: Time your purchases strategically before year-end to maximize deductions.
Promoting your business is essential and fully deductible, including:
Tip: Track your marketing ROI to make every advertising dollar count.
Business-related meals and entertainment are 50% deductible. Keep detailed receipts and note the purpose and attendees for CRA compliance.
Tip: Use digital receipts and store them in a folder for easy reference.
Salaries, wages, bonuses, and employee benefits (like health and dental coverage or training programs) are deductible expenses.
Tip: Offering benefits helps retain employees while providing tax savings.
Courses, workshops, or certifications that improve business skills or your employees’ skills are deductible.
Tip: Online platforms like LinkedIn Learning or Coursera provide affordable, deductible courses.
Insurance for liability, property, or errors & omissions is deductible.
Tip: Insurance protects your business and reduces taxable income — a win-win!
Interest on business loans, credit lines, and service fees for business accounts or credit cards are deductible.
Tip: Keep business and personal accounts separate for clean record-keeping.
Larger assets, like vehicles or equipment, are deducted gradually over time using CCA.
Tip: Plan asset purchases strategically to maximize deductions in the current tax year.
Employee health benefits, such as gym memberships or wellness stipends, may also qualify as deductions.
Tip: Boost employee morale and productivity while claiming a deduction.
If a customer owes you money that you cannot collect despite reasonable efforts, it may be deductible as a bad debt.
Tip: Maintain detailed records of invoices and collection attempts.
Software for accounting, project management, CRM, or communication tools like Zoom and Slack are deductible.
Tip: These tools increase efficiency while qualifying as business expenses.
Charitable donations may provide tax credits, and sponsorships can qualify as advertising deductions.
Tip: Align sponsorships with your brand for exposure, goodwill, and tax benefits.
Tax deductions are more than just a way to reduce taxes — they’re a way to reinvest in your business. By understanding what’s available and planning strategically, Canadian small businesses can keep more money in their business, improve cash flow, and thrive in 2025.
At Track Accounting, we help entrepreneurs and small businesses maximize deductions, streamline bookkeeping, and stay compliant with the CRA. Whether you’re self-employed, running a startup, or managing a growing company, we’ll guide you through tax season with confidence.
📞 Ready to maximize your 2025 tax deductions? Contact Track Accounting today for a free consultation and start saving!
