This estimate is for informational purposes only. This tool provides a rough estimate and is not a substitute for the advice of an accountant. For advice tailored to your situation, Bankeo will find you the ideal accountant for free, with no obligation.
Find an AccountantMeals and entertainment, vehicle expenses based on mileage or percentage of business use, and home office.
Mileage, amount paid, or percentage of use, as well as your marginal tax rate.
Total deduction calculated and estimated net tax savings.
Deductible business expenses allow a self-employed individual or a business to reduce their taxable income, and thus the amount of tax owed. For an expense to be deductible, it must be incurred for business purposes and be reasonable. In Canada, the calculator applies the 2026 rules: 50% deductibility for meals and business entertainment (harmonized rule for the federal government, Quebec, and Ontario), vehicle expenses based on mileage or actual use, and home office expenses prorated based on floor area. Taxes and credits are not included in the estimate.
If you use your vehicle for work, there are two approaches in Canada. You can deduct the business portion of your actual expenses, that is, your vehicle expenses multiplied by the ratio of business kilometers to total kilometers (fuel, maintenance, insurance, registration, interest, depreciation). Keep a log of your trips. The calculator applies the 2026 limits (Category 10.1: capital cost of $39,000, lease of $1,100 per month, interest of $350 per month).
Meals and entertainment expenses include a personal component (you would have eaten even without the client), which is why the tax authorities limit the deduction. In Canada, the limit is generally 50% (and the same percentage applies to tax credits), according to a rule harmonized between the federal government, Quebec, and Ontario, with individual rules for certain sectors.
| Type of Expense | Processing in Canada |
|---|---|
| Vehicle by Mileage | Actual expenses × (business km / total km), with caps |
| Actual-Use Vehicle | Business Portion of Actual Expenses |
| Meals and Receptions | 50% Deductible Expenses (Federal, Quebec, Ontario) |
| Home Office | Pro-rated based on office size |
| Vehicle Depreciation | Subject to a cap (Category 10.1: capital cost of $39,000) |
| Thresholds and Limits | Varies by province and year |
| Annual Update | 2026 rates recalculated by the calculator |
This is an educational overview. Exact rates, limits, and caps may vary by province: the calculator uses Canada’s 2026 rates.
In Canada, you can deduct the business portion of your vehicle’s actual expenses: automobile expenses (fuel, maintenance, insurance, registration, interest, depreciation) multiplied by the ratio of business kilometers to total kilometers. Keep a log of your trips. The calculator applies the 2026 limits (Category 10.1).
You can deduct the business portion of actual expenses: fuel, maintenance, registration, insurance, interest, lease payments, and depreciation. The percentage is calculated using a logbook (business km / total km). Example: 8,000 business km out of a total of 20,000 km equals 40%; for 8,000 in expenses, the deduction is 3,200.
In Canada, only a portion of business meals and entertainment expenses is deductible: the limit is generally 50%, according to a rule harmonized between the federal government, Quebec, and Ontario, with individual provisions for certain sectors. The calculator automatically applies this limit.
Keep a record of your trips: date, departure and arrival locations, purpose of the trip, and kilometers travelled. Save receipts for fuel, maintenance, and insurance. A mobile tracking app is highly recommended to automate the process.
Business meals and entertainment expenses (meals, event tickets, modest business gifts) are subject to the same deduction limit. In Canada, this is generally 50%. Membership dues for clubs (sports, social, golf) are generally not deductible.
The savings equal the deduction multiplied by your marginal tax rate. For example, with a marginal tax rate of 36%, a deduction of $5,000 saves you approximately $1,800 in taxes. Your tax rate depends on your province and income level: the calculator applies it automatically.
The calculation method is the same, but the tax savings differ because tax rates vary. A self-employed individual deducts at their personal marginal tax rate, while a business deducts at the corporate tax rate. These rates vary by province, which the calculator takes into account.
Bankeo connects you, for free, with vetted accountants who specialize in tax optimization and business deductions. We understand your business and match you with accountants who can maximize your deductions while complying with tax regulations. This service is free for business owners and comes with no obligation.
Tax Optimization for Business Vehicles.
Read the article →A Practical Guide for Entrepreneurs.
Read the article →Complete list and rules for 2026.
Read the article →Deductible moving expenses for entrepreneurs.
Read the article →Bankeo connects you for free with vetted accountants who specialize in tax optimization and business deductions. This service is free for business owners and comes with no obligation.
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