Home Office Internet and Phone Bills: What's Tax Deductible in Canada?

Yes, a portion of your internet and phone bills can be deducted as home office expenses if you use them for business purposes. However, the CRA requires you to claim only the business-related portion, not your entire bill. This means you need to track how much of your monthly costs go toward work versus personal use, and the amount you claim must be reasonable and defensible. Not all communication costs are created equal when it comes to tax deductions. The CRA allows you to claim expenses that are directly linked to earning business income from your home office. These typically include: Internet service (residential or business plan) Mobile phone lines dedicated to business Landline for business calls Data plans used exclusively for work Video conferencing or communication software subscriptions (Zoom, Microsoft Teams, etc.) Expenses that generally do NOT qualify include basic cellular plans shared with personal use unless you can document a clear business percentage. The key to successfully claiming these expenses is calculating the percentage of time you use them for business. If you use your internet connection 40% for work and 60% for personal browsing, you can only deduct 40% of your bill.

Frequently Asked Questions

Can I claim my full internet bill if I work from home?

No. You can only claim the business-use portion of your internet bill. If you estimate 50% business use and 50% personal use, you claim 50% of the bill. You must be able to justify this percentage with documentation.

Do I need a separate phone line for work to claim it?

Not required, but it makes claiming easier. If your phone is shared between work and personal use, you claim only the business percentage. A dedicated business line lets you claim 100% without estimating, which is cleaner for CRA records.

Can employees claim internet and phone expenses?

Only if your employment contract requires you to work from home and your employer does not reimburse these costs. Employees cannot claim these expenses without meeting both conditions.

Should I claim internet under the simplified or detailed home office method?

Internet and phone expenses can only be claimed using the detailed expense tracking method. If you use the simplified method (per-square-foot calculation), you cannot claim these communication costs separately.

How long do I need to keep receipts for internet and phone bills?

Keep all supporting documents for six years from the tax year you claim the expense. The CRA can audit back that far, and having clear records protects you if questions arise.

Steps

1. Gather 12 months of bills: Collect all internet and phone statements from the past year. If you switched providers mid-year, include bills from both. Highlight the monthly charges so you have a clear list to reference.
2. Calculate your business-use percentage: Estimate honestly what portion of these services you use for work versus personal use. Consider work hours, household members, and your industry. Document your reasoning in writing so you can explain it if needed.
3. Apply the percentage to each bill: Multiply each month's internet or phone charge by your business-use percentage. If your bill is $100 and business use is 40%, claim $40 for that month. Sum all months for your annual deduction.
4. Choose the detailed expense method: Confirm you're using the detailed home office deduction method (not simplified per-square-foot). This allows you to claim internet and phone alongside other eligible home office expenses like utilities and rent.
5. Record expenses on your tax return: Enter your total claimed internet and phone expenses on Schedule 8 (if self-employed) or on your T777 form (if an employee). Keep all supporting bills and your business-use calculation notes in your tax records for six years.