Phone and Internet Expenses: What Self-Employed Canadians Can Claim

Why Phone and Internet Deductions Are So Confusing

For most Canadian freelancers, a phone and internet connection are essential business tools. You email clients, join video calls, upload files, run ads, send invoices, and manage projects online. So can you deduct the whole bill on your T2125?

Usually, no. The CRA generally allows the business-use portion of a mixed personal/business expense. Because most sole proprietors use the same phone and home internet for personal life too, the key is choosing a reasonable percentage and documenting how you calculated it.

Where These Expenses Go on the T2125

Phone and internet costs typically belong under Line 9220 — Telephone and utilities on the T2125. If you include internet as part of your home office calculation instead, that can also be reasonable in some cases. The important rule is simple: do not claim the same internet bill twice.

For example, do not claim 60% of your internet bill on Line 9220 and then also include the full bill in your Line 9945 home office expenses. Pick one approach and be consistent.

How to Calculate the Business-Use Percentage

There is no universal CRA percentage for freelancers. Your claim should reflect actual use. A practical method is to estimate your business use based on time, data, or purpose:

A full-time freelancer working from home might reasonably claim 50% to 80% of home internet, depending on household use. A side-hustle freelancer with a full-time job may have a lower percentage. The number matters less than whether you can explain it.

What About the Phone Itself?

Your monthly phone plan is different from buying a phone. The business-use portion of your monthly service fees can usually be deducted as an operating expense. The phone device may be treated as equipment, especially if it is a higher-cost purchase used over multiple years.

For a phone used partly for business and partly personally, apply the same principle: claim only the business-use portion. If the device is expensive, it may need to be claimed through Capital Cost Allowance (CCA) rather than deducted all at once.

Documentation the CRA Expects

You do not need a perfect minute-by-minute log, but you should keep enough support to make the claim defensible:

If your claim is 75% business use, write a short note: "Freelance design work from home, video calls and file uploads daily, estimated 45 business hours/week vs. 15 personal hours/week." That note can be extremely helpful if the CRA asks later.

Common Mistakes to Avoid

Claiming 100% by default. Unless you have a separate dedicated business line, 100% is hard to defend for a personal phone or family internet plan.

Double-counting internet. If it is in home office expenses, do not also claim it under telephone and utilities.

Using the same percentage forever. If your work pattern changes, update the percentage. A part-time year should not use the same claim as a full-time freelance year.

Track Mixed-Use Expenses with ClaimHero

Phone and internet deductions are not difficult once you track them consistently. ClaimHero lets Canadian sole proprietors log the business portion under the correct T2125 category, add notes explaining the percentage, and export a clean year-end summary. Free to start.