Phone and Internet Expenses

by Karen B
(Brampton, ON)

Only the business portion of your personal accounts is deductible.

Only the business portion of your personal accounts is deductible.


Editor's Note February 2024: You can get the most up-to-date information on what CRA's current position is on cell phones and home internet service at my sister website Some of the information in this post may be out of date.


Split phone line and internet expenses for home office

I am a sole owner who works from home and am set up with a single phone line with two numbers (one personal and one work), as well as internet charges.

From what I have read, these are not deductible under home office expenses, yet I use the second phone number exclusively for work and I use the internet primarily for work.

These bills, however, are in my personal name. Normally, when I have business expenses incurred out-of-pocket, I charge them back to the business (i.e. office supplies, etc.)

Can I do the same with my phone/internet expenses that apply to the business?

Many thanks for your help!

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Hello Karen,

The good news is ... yes you can!

Your business line is claimed on line 9220 of tax schedule T2125 ... but your personal line is not tax deductible.

You can deduct a portion of your internet connection as well. You will need to find a reasonable method of estimating the personal portion to back out ... as it is not tax deductible. I would claim the business portion for your internet expenses on line 9220 as well ... or line 9270.

The general rule for claiming business expenses is ... it must be reasonable and made with the expectation of profit. All business expenses must be supported by original source documents.

As far as I know, it is okay that they are in your personal name ... because you are a sole proprietor and you are your business.

I do recommend that you limit purchasing business expenses with your personal funds. Learn why in my article on How to Create an Audit Trail.

You may also like to read my Home Business Taxes series found under "The Tax" button on the left hand side of the site.

I wish you much success in your business. :0)

Comments for Phone and Internet Expenses

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Jul 28, 2010
Many Thanks!
by: Karen B

Hello Laura,

Thank you so very much for your quick response! Your advice is so helpful and I found myself reading quite a few other categories also.

To say I am impressed would be an understatement. I am definitely going to tweet about you on Twitter and share your info on Facebook as well.

Keep up the great work!

Kind regards,

Jul 28, 2010
My "bloglets" are on Facebook
by: Bookkeeping Essentials

Hi Karen,

Thanks so much. I'm delighted you like my sight ... and that you want others to know about it too! ;0)

I've just taken the time ... it was on my to do list ... You can find me on Facebook under "Pages" as

Apr 13, 2011
But what about ITCs?
by: Christian

Hi there,

Thanks for this information with regards to telephone and internet (and all the other useful info in this site!). This is what I expected.

Now my question is related to the ITCs associated with these costs. For example, if I have business use of 68.9% of my $100 (inclusive of tax) internet bill, would I, in Ontario, claim 13/113 of the $68.9, ie $7.93 as ITC?

Also, what do you think about the following "formula" to establish business use: 5 weekdays of 8 hrs business use, 2 hrs private use, 2 weekend days of 4 hrs private use= 40 hrs business vs 18 hrs private = 68.9% business use?

Thanks so much for any help.


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Hi Christian,

Yes you can claim ITCs related to business use.

With regards your business use calculation ... as long as it passess the "reasonable" test and you feel you could defend it to a CRA auditor ... and you document how you arrived at your percentage, it should be okay.

P.S. I would like to remind you there is a difference between information and advice. The general information provided in this post or on my site should not be construed as advice. You should not act or rely on this information without engaging professional advice specific to your situation prior to using this site content for any reason whatsoever.

Sep 01, 2015
Phone and Internet Expenses
by: Alina

Nice post. I was checking constantly this blog and I'm impressed! Very useful information specially the last part :) I care for such information much. I was seeking this particular information for a very long time. Thank you and best of luck.

Oct 13, 2016
Salaried Employee work at home
by: Anonymous

What if you are an employee working at home, and required to have the internet to do your work? Is this tax deductible?

Oct 13, 2016
Salaried Employee work at home
by: Lake

Assuming you are in Canada, if it is required for your job and your home office is your main office - not an additional office - then you can claim it on tax form T77 when you file your personal tax return.

However, in order for you to file this form, you must have your employer complete a Form 2200.

Lern more here:

Apr 02, 2017
Internet being part of a bundle
by: Kac

Hi, I know I can claim my internet for work at home space as I have a T2200 which states it. I know how to fill it out. What I am wondering is my internet is part of a bundle with home phone and TV. The bill does not have a breakdown of it. Also I am using it for personal use too obviously. How much do I claim and do I split it as in a third of the cost and then half as I do use it personally too.

Apr 05, 2017
by: Lake

The T2200 must be completed and signed by your employer NOT the employee. The T2200 form gives the employee authorization to complete form T777 Statement of Employment Expenses when preparing your personal income tax return.

Check out the chat on CRA's position on cell phones here:

Apr 05, 2017
Internet expense
by: kac

Hi Lake,

I know the employer needs to fill out the T2200 which they have. And I know I have to fill out T777 which I have for all the other expenses. What I am wondering about is my internet is part of my bundle, which includes my phone and TV. How to I break it down or do I have to break it down to be able to claim my internet.

Apr 11, 2017
by: Lake

I don't know what to say. Every bill I have ever seen has a breakdown of the charges. If you bill doesn't have a breakdown, phone the company and ask for a breakdown of your bill for accounting purposes.

Apr 14, 2017
Internet Not Deductible
by: Anonymous

We have received a notice from CRA for TY 2014 and 2015 and the letter states (re deductions for home office required by employer) that for internet: "there is no provision under the Income Tax Act to allow this expense. This expense is considered personal in nature."

Given part of the job is maintaining website content and communicating with suppliers and customers by email, that is ridiculous.

Jun 03, 2017
Internet Not Deductible
by: Lake

Internet is not a home office expense. It is a business expense claimed on line 9220. If you don't have a dedicated business line for the internet, you will have to come up with a way to back out your personal use portion.

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Cell Phones and CRA

by Kaila
(Fort McMurray)

What is CRA's position on cell phones?

What is CRA's position on cell phones?

Editor: links updated 2019-08

Are cell phones fully deductible?

My client is using 2 cell phone and I am not sure if they are both fully deductible. Is there a rule on this?

If using only one cell phone, is that fully deductible?

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Hi Kaila,

CRA's postion on cellular phone use is found at .

I discuss briefly land line phones at T2125 Line 9220 and also when discussing what expenses are not deductible.

The key to deductibily when you are a business owner is incurring the expense to earn income.

You might want to take at look at the CRA publication Excise and GST/HST News No. 61 from the summer of 2006 - Ordinary location of mobile phones.

It discusses that there "are special rules for determining whether a particular call is subject to GST/HST in the situation where a cellular service provider charges a subscriber for calls made on his or her cell phone on a pay-per-use basis."

The CRA publication T4130 Employer's Guide Taxable Benefits and Allowances discusses cellular phone service.

The Canadian Tax Resource published an article in March 2010 on Deductions From Employment Income. Salesperson expenses were discussed.

Under expenes permitted as salesperson expenses, it says, "Supplies used directly in your work. This includes office supplies, cellular phone airtime, and long distance (your normal monthly charge for cellular or telephone cannot be deducted)."

Jones & O'Connell posted an excellent article in September 2016 entitled Employer-provided cell phones - the potential tax cost. Updated March 2017 - be sure to read this article

While these references / articles are discussing employees, some of the logic could be applied to the sole proprietor when trying to determine "What is a reasonable expense?"

So, are two cell phones deductible?

I think it would be pretty tough to explain why the business owner needs 2 business cell phones for himself. He can only use one at a time. Any individually charged calls would certainly be deductible if they were related to business and were not personal in nature.

Is one cell phone fully deductible?

Again it depends. Is it used 100% for business with no personal useage? Is the plan a basic one? Does the owner's personal use of the cell phone result in charges over the basic plan?

You can always phone CRA and ask their opinion.

P.S. I would like to remind you there is a difference between information and advice. The general information provided in this post or on my site should not be construed as advice. You should not act or rely on this information without engaging professional advice specific to your situation prior to using this site content for any reason whatsoever.

Comments for Cell Phones and CRA

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Jan 22, 2012
Cell Phone Purchase
by: Sharon, Calgary

I have a client who purchased a new iphone using his personal credit card for $99.00 plus tax. He uses the phone 10% for business and 90% personal.

How would I properly record this type of transaction?

Would I have him fill out a personal expense report for only 10% of the total bill ($9.90 for phone and $0.50 GST)? Then book as an expense as the amount is less than $200 in the books and only claim the $0.50 for ITC's)?

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Hey Sharon,

I'm thinking I would approach the entry exactly like you have suggested.

Apr 03, 2013
Cell Phone Expenses
by: Anonymous

Are cell phone costs deductible for self employed persons?

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I moved your question here as it related to cell phones. Check out the references listed.

Mar 08, 2017
Cell phone for self employed
by: Tanya from Ottawa

Hi! First of all I want to tell you how fantastic your page is! You have such great information to share!

I have a question re: cell phone for self employed - if used for both business and personal (say 50/50) can it be an expense still (the business part? Would that only include chargeable business messages or would it include a portion of the monthly base charge?

Thank you!

P.S. I love the website but a search button for articles on the site would be great. The search button I tried and it took me off the Bookkeeping-Essentials website :(

Mar 08, 2017
by: Lake

I moved your post to the "cell phone" page. You should find the answer to your question above.

Strange about the search box. When I search for information on my site using the custom search box in the right hand navigation bar, it never searches off my site. Google does put advertising at the top but all the rest should be articles on my site.

Sep 18, 2017
So, on which line...
by: Anonymous

On which line does this go? Everyone blogs about these expenses, but doesn't tell you where to put them

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