Home Office Expense Calculator 2026
Updated October 2026
This is for self-employed people using Form T2125. It is not for employees. Employees use Form T777 and a T2200, which aren't covered here. You can claim business-use-of-home expenses when the workspace is your main place of business, or you use it only for business and you regularly meet clients there.
Business-use percentage
Rooms: only if rooms are roughly the same size.
Annual costs
Interest only, not the principal.
Use your own business-use % for internet if you track it. Shown separately for line 9220, not added to line 9945.
Enter the workspace and the total size of the home.
Estimate, not tax advice. Uses 2026 rates where published (all figures used here were published by October 2026) and only the basic personal amount and CPP/QPP credits and deductions. Your actual tax depends on your full return. Check with the CRA, Revenu Québec or a qualified professional before you rely on it.
Sources
Who can claim business-use-of-home expenses
You can claim them when the workspace is your principal place of business, or when you use the space only to earn business income and you meet clients or customers there on a regular basis. A kitchen table you also use for dinner does not qualify unless you measure the business hours and apply them to the area.
How to calculate the business-use %
Divide the workspace by the finished area of the home. A 200 square foot office in a 1,000 square foot home is 20%. If the rooms are about the same size, you can divide rooms instead: 1 room of 8 is 12.5%. When the space is shared with personal use, multiply by the hours you work there and divide by 168, the hours in a week.
What you can and can't include
Include rent, or mortgage interest if you own, plus property tax, heat, electricity, water, home insurance, and maintenance. Do not include mortgage principal, furniture (that is capital cost allowance on equipment, not line 9945), or rooms you never use for the business. Internet is usually a separate business expense.
The loss limit and carry-forward
Home office expenses cannot create or increase a business loss. If your net business income before these costs is $3,000 and the home office total is $5,400, you claim $3,000 this year and carry $2,400 forward. You can use the carry-forward in a later year if you still qualify. The self-employed tax calculator shows what a lower net income does to the tax you set aside. The mileage calculator covers the vehicle, and the profit margin calculator covers price and cost.
Renters vs owners
Renters claim rent. Owners claim mortgage interest, not the principal portion of the payment, plus property tax. Both can claim utilities, insurance, and repairs that relate to the home. The business-use percentage applies to each of those costs.
Questions
Can I claim home office expenses if I'm self-employed in Canada?
Yes, if it's your main place of business, or used only for business and regularly to meet clients.
Where do home office expenses go on the T2125?
Line 9945, business-use-of-home expenses, calculated in Part 7.
Can home office expenses create a loss?
No. They're limited to net business income before them. The rest carries forward.
Can I deduct my mortgage payment?
Only the interest part, not the principal.
Should I claim CCA on my home?
Usually not, because of the principal residence and recapture effects.
Is internet a home office expense?
It's usually claimed as a business expense on line 9220 for the business-use part, not on line 9945.