Can I Claim Equipment and Computer Hardware as a Business Expense in Canada?
Yes, deductible via Capital Cost Allowance (CCA). Computers and office equipment fall into Class 8 at a 20% declining balance rate. The half-year rule limits the first-year deduction to 50% of normal CCA. Immediate expensing for CCPCs (up to CAD 1.5M) was available through to end of 2024 - check current CRA guidance for the latest status.
What Canada Revenue Agency (CRA) says
CRA prescribes CCA classes under Schedule II of the Income Tax Regulations. Computer hardware and systems software fall in Class 10 (30%) or Class 8 (20%) depending on category. The Accelerated Investment Incentive and immediate expensing rules changed the first-year deduction significantly for property acquired between 2018 and 2024. For 2025 and later, the standard half-year rule applies for most property.
When you can claim
- Class 8 (20%): office furniture, photocopiers, scanners, printers, and general business equipment
- Class 10 (30%): general purpose electronic data processing equipment and systems software
- Immediate expensing (if still available): 100% first-year deduction for eligible CCPCs on designated property
- Software application programs (eligible for CCA or immediate deduction depending on type and year acquired)
When you cannot claim
- Personal computers or devices not used for business (or only the personal-use portion)
- Capital cost above the class ceiling for restricted assets
- Software or equipment purchased for personal use and occasionally used for work
Good to know
Pro tip: CCA is discretionary - you do not have to claim the maximum each year. In a loss year, skip the CCA claim entirely (it cannot be claimed to create or increase a loss that would otherwise not be used). Save the CCA for years when you have taxable income to shelter.
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