Claiming Internet, Phone, and Utilities – CRA Guidelines

Running your business often means using your internet, phone, and home utilities for work. The Canada Revenue Agency (CRA) allows you to deduct part of these costs — but only the portion used for business.

Knowing how to calculate your business-use percentage and keeping proper records can help you maximize your deductions while staying compliant with CRA rules.

Let’s break down what you can (and can’t) claim.

1. Internet Expenses – Claim the Business Portion

If you use your home internet for business, you can claim a reasonable portion of that cost.

For example:
If your internet bill is $120/month, and you estimate that 60% of your usage is for business activities (emails, virtual meetings, research, uploading files), you can claim $72/month as a deductible expense.

💡 Tip: CRA may ask how you calculated this percentage. Keep notes or examples of your business internet activities to support your estimate.

2. Phone Expenses – Personal vs. Business Use

You can claim a portion of your cell phone or landline bill if it’s used for business.

If you use one phone for both personal and business:

• Estimate your business-use percentage (based on call logs or time spent).

• Claim only that portion of your total monthly bill.

If you have a dedicated business phone line:

• You can generally claim 100% of that cost.

Example:
If your phone bill is $90/month and 50% of your calls or data are business-related, you can claim $45/month.

3. Utilities – If You Have a Home Office

If you operate your business from home, you can claim part of your utilities as a home office expense.

Eligible utilities include:

• Electricity

• Heating

• Water

• Internet (if not already claimed separately)

To calculate your home office deduction, use this simple formula:

(Workspace area ÷ Total home area) × Business-use % = Deductible portion

Example:
If your office is 10% of your home and you use it full-time for business, you can claim 10% of your utility bills.

💡 Renters can also claim part of their rent.
💡 Homeowners may claim portions of property taxes, mortgage interest, and home insurance.

4. Keep Proper Documentation

CRA requires supporting documents for all expense claims. Always keep:

• Internet, phone, and utility bills

• Records showing how you calculated business use

• Proof of payment (bank statements or receipts)

Electronic copies are fine — just make sure they’re easy to access if CRA asks for them.

5. Common CRA Mistakes to Avoid

🚫 Claiming 100% of your internet or phone bill when there’s personal use
🚫 Forgetting to adjust your business-use percentage if your work habits change
🚫 No receipts or supporting documents
🚫 Double-claiming the same internet costs under “home office” and “utilities”

CRA looks closely at mixed-use expenses — reasonable, well-documented estimates are key.

6. Stay Organized and Claim Confidently

Deducting part of your internet, phone, and utilities can significantly reduce your taxable income — as long as you follow CRA’s business-use rules.

At Tiki Tax, we help small business owners and self-employed professionals track mixed-use expenses, calculate fair business-use percentages, and stay compliant — so you can claim confidently and save more at tax time.