Most small-business equipment falls into one of a handful of Capital Cost Allowance (CCA) classes, and the class sets the yearly depreciation rate. The common ones for freelancers and small businesses are Class 8 (furniture and equipment, 20%), Class 10 / 10.1 (vehicles, 30%), Class 12 (small tools and application software, 100%), and Class 50 (computers, 55%).
Common CCA classes for small business
| Class | What goes in it | Rate |
|---|---|---|
| Class 8 | Furniture, fixtures, most equipment and machinery, tools costing $500 or more not covered elsewhere | 20% |
| Class 10 | Most motor vehicles, vans and light trucks used in the business | 30% |
| Class 10.1 | A passenger vehicle that costs more than the CRA's annual cost limit (see below) | 30% |
| Class 12 | Tools under $500, application (non-system) software, uniforms, some utensils | 100% |
| Class 46 | Data network infrastructure equipment (e.g. network switches) acquired after March 22, 2004 | 30% |
| Class 50 | General-purpose computer equipment and systems software acquired after March 18, 2007 — laptops, desktops, servers | 55% |
Verify each class and rate against the current CRA guidance on classes of depreciable property before you file — classes are occasionally added or amended. This is educational information, not tax advice.
How CCA works
You generally don't deduct the full cost of a capital purchase in the year you buy it. Instead you claim a percentage of the remaining value each year — this is declining-balance depreciation. A $2,000 Class 8 desk (20%) lets you claim $400 the first eligible year, then 20% of the $1,600 left the next year, and so on.
Two rules that trip people up:
- The half-year rule. In the year you acquire an asset, you can usually only claim CCA on half the normal amount. (Recent accelerated-investment and immediate-expensing incentives change this for some assets and years — check the current rules for your purchase.)
- CCA is optional. You don't have to claim the maximum, or any, CCA in a given year. Claiming less leaves more undepreciated cost to claim in future years.
Where CCA goes on the T2125
On Form T2125 (Statement of Business or Professional Activities), capital cost allowance is calculated in Area A — the CCA table — and the total flows to line 9936. Area A is where you track each class's opening balance, additions, the half-year adjustment, the rate, and the closing undepreciated capital cost (UCC) that carries to next year.
How ExpenseBot helps
ExpenseBot's year-end workbook uses AI to flag your capital purchases and suggest a likely CCA class (Class 8, 10, 50, and so on) with a short reason, so nothing large gets buried as a regular expense. It classifies and sums those candidates for you.
What it does not do is compute the Area A declining-balance schedule — the half-year adjustment, UCC roll-forward, and recapture/terminal-loss math stay with you or your accountant, because they depend on prior-year balances and elections ExpenseBot doesn't hold. Think of it as getting your capital items sorted into the right buckets, ready for the Area A table.
See the T2125 expense tracker and how ExpenseBot handles input tax credits alongside CCA, or the Canada expense tracker overview.
Quick answers
What class is a laptop? Class 50 (55%) — general-purpose computer equipment.
What class is a vehicle? Class 10 (30%) for most vehicles. If it's a passenger vehicle that cost more than the CRA's annual limit ($39,000 before tax for vehicles bought in 2026, set each year), it goes in Class 10.1 instead, still at 30% but tracked separately.
What class is software? Application (non-system) software is Class 12 (100%). Systems software bought with a computer is Class 50 (55%).
Do I have to claim CCA every year? No. CCA is optional — you can claim part of it or none, and carry the undepreciated balance forward. Many people skip it in low-income years to save the deduction for a higher-income year.
Educational tax information, not tax advice. Confirm the correct class and rate for your purchase with the CRA or your accountant.