Laptop & Computer Equipment — Canada Tax Rules

Claim computers and peripherals via Capital Cost Allowance (CCA) — Class 50 at 55%/year — or as immediate expenses if under C$500.

Claimable: Fully claimable · Tax authority: CRA (Canada Revenue Agency)

CRA (Canada Revenue Agency) Rules

• Computers, laptops, and tablets are CCA Class 50 assets, depreciated at 55% per year on a declining balance.
• In the first year of purchase, the half-year rule applies — you claim only 50% of the usual CCA (i.e. 27.5% of the purchase price).
• If you use the computer for both business and personal purposes, claim only the business-use proportion of the CCA.
• Items costing C$500 or less may qualify for Class 12 at 100% deduction in the year of purchase — no depreciation schedule needed.
• External monitors, keyboards, mice, webcams, and printers follow the same CCA rules as the computer.
• Software subscriptions (SaaS) and annual licences are deductible as operating expenses in the year paid — not capitalised.
• Cloud storage services (Dropbox, Google One) used for business are deductible in the payment year.

Limits

Class 50 (computers): 55%/year declining balance. Half-year rule applies in year of purchase (claim 27.5%). Items ≤C$500 may qualify for Class 12 (100%). Business-use proportion applies if computer used personally.

Worked Example

Chen buys a C$2,000 laptop used 80% for business and a C$350 webcam used 100% for business. Laptop: business-use base C$2,000 × 80% = C$1,600. Year 1 CCA (half-year rule): C$1,600 × 55% × 50% = C$440. Webcam: C$350 under C$500 threshold — Class 12, claim C$350 immediately. Total 2024 deduction: C$790.

Record Keeping

• Keep purchase receipts or invoices for all computer equipment
• Document the business-use percentage for any dual-use items with written reasoning
• Maintain a CCA schedule for all Class 50 assets: opening UCC, CCA claimed, and closing UCC each year
• Record the date of purchase and original cost for each capital asset
• If disposing of or selling equipment, record sale proceeds — this triggers a recapture or terminal loss calculation

Frequently Asked Questions

What CCA class does a laptop fall under in Canada?

Laptops and computers are CCA Class 50, with a 55% per year declining balance depreciation rate. In the first year of purchase, the half-year rule applies and you claim 27.5% (half of 55%). If the laptop is used for both business and personal purposes, apply your business-use percentage to the CCA calculation.

Can I expense a laptop under C$500 immediately in Canada?

Yes — items costing C$500 or less may qualify for Class 12 (100% deduction in the year of purchase). If a basic laptop costs under C$500, you can deduct the full business-use proportion in the year of purchase without maintaining a depreciation schedule.

Is business software like Microsoft 365 or Adobe CC a capital expense?

No — subscription-based software (SaaS) is an operating expense deductible in the year you pay the subscription fee. You do not need to capitalise recurring annual software subscriptions. Only perpetual software licences with significant upfront costs might require capitalisation under CCA Class 12.

What happens to my CCA when I sell or dispose of a business laptop?

When you sell or dispose of a computer, you reduce your Class 50 UCC (undepreciated capital cost) by the lesser of the proceeds of disposition or the original cost. If the UCC goes negative, the difference is recaptured income. If the entire Class 50 pool is wound down with remaining UCC, the remaining balance is a terminal loss deduction.