Step-by-step guide to completing CRA Form T2125 for Canadian self-employed individuals and gig workers.
You need T2125 if you have self-employment income from any source: rideshare driving, food delivery, Airbnb, Etsy, freelancing, contracting, tutoring, photography, or any other business activity. If you earn income without a T4 (no employer), T2125 is almost certainly required.
File one T2125 per distinct business activity. If you both drive for Uber and freelance write, file two separate T2125 forms.
Enter your name, SIN, business name (can be your own name), business address (your home address is fine), and the fiscal year end (usually December 31 for individuals). Select your industry code (NAICS) — look up the closest match at canada.ca/naics.
Line 8000 — Gross sales, commissions, or fees: Enter your total revenue before any deductions. This is everything you collected from clients, platforms, or customers. Do not net out expenses here — report the full gross amount.
Lines 8290–8300 — Reserve adjustments: For most gig workers, these are zero.
For sellers of physical goods (Etsy, Shopify, Amazon FBA): enter opening inventory, plus purchases made during the year, minus closing inventory. The result is your Cost of Goods Sold — subtracted from gross revenue to give gross profit.
For service businesses (delivery drivers, freelancers): skip this section (COGS = zero).
Gross revenue minus COGS = Gross Profit. For service businesses, gross profit = gross revenue.
This is the core deduction section. Common lines:
| Line | Expense Type |
|---|---|
| 8810 | Advertising |
| 8860 | Meals and entertainment (50% of eligible amounts) |
| 8871 | Insurance |
| 8910 | Interest and bank charges |
| 8960 | Office expenses (supplies, postage) |
| 8990 | Professional fees (accounting, legal) |
| 9060 | Salaries, wages, subcontractors |
| 9200 | Telephone and utilities (business portion) |
| 9220 | Travel expenses |
| 9281 | Motor vehicle expenses (actual cost method) |
| 9270 | Other expenses (per-km mileage goes here) |
| 9945 | Business-use-of-home expenses |
| 9936 | Capital cost allowance (from CCA schedule) |
Gross profit minus total business expenses = Net income (or loss). This is your taxable self-employment income. It flows to Line 13500 of your T1 personal return.
Enter your total vehicle costs for the year and your business-use percentage (business km ÷ total km). T2125 calculates the deductible amount. If using the per-km rate instead, skip this section and enter the total mileage calculation under "Other expenses" at line 9270.
Calculate your home office expenses (rent/mortgage interest, utilities, internet, property taxes) and multiply by your business-use percentage. Enter the total on line 9945. Remember: this cannot create or increase a loss — any excess carries forward.
For each class of depreciable property (equipment, vehicle, etc.): enter opening UCC (undepreciated capital cost), additions during the year, disposals, and calculate CCA for the year. The total CCA from all classes flows back to your T2125 expenses.
T2125 is filed with your T1. For self-employed individuals, the T1 filing deadline is June 15 (extended from April 30). However, any taxes owing are still due April 30 to avoid interest charges. The extended deadline only delays the obligation to file the return — not to pay the balance owing.
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Get KOHO Free — Use Code 45ET55JSYAInformational only. Not tax or legal advice. Download the official T2125 at canada.ca. Consult a CPA if you're unsure about any section.