You run inboxes, calendars, and projects for clients from your laptop — and as far as the CRA is concerned, you run a business. Nobody withholds tax from those client payments, and your home office, software, and internet are deductions that bring your bill down fast.
If you work as a VA, your income goes on Form T2125, and the cost of your setup comes off the top.
You’re self-employed, with no tax withheld
Every client payment comes to you in full. You report it all, pay both halves of CPP (roughly 11.9% of net income), and set aside 25–30% of each payment as it lands. There’s no minimum — the first dollar from your first client counts.
Your biggest deduction is the room you work in
VAs work from home, which makes the home office your largest and most reliable deduction. Claim the business-use percentage of rent (or mortgage interest), utilities, and internet based on your workspace’s share of your home’s square footage. A VA using a 120 sq ft office in a 900 sq ft apartment claims ~13% of those costs. Our home office guide has the full math.
What else VAs deduct
| Expense | Deductible? | Notes |
|---|---|---|
| Home office | Yes | Business-use % of rent, utilities, internet |
| Software & subscriptions | Yes | Asana, ClickUp, Notion, Canva, Google Workspace, scheduling tools |
| Computer & equipment | Yes | Laptop, monitor, headset; over $500 = CCA |
| Phone & internet | Business portion | Core to the work — track the % |
| Professional development | Yes | VA courses, certifications, skill training |
| Platform & payment fees | Yes | Upwork, Fiverr cuts; PayPal/Wise/Stripe fees |
| Marketing | Yes | Website, ads, business cards |
| Subcontractors | Yes | If you outsource tasks to another VA |
Software is the other big stack — a VA easily spends $1,000–$3,000 a year on tools, and the business-use portion is deductible. Track it; untracked subscriptions are deductions handed back to the CRA.
US and international clients
Lots of VAs work for clients abroad. Report income in Canadian dollars, converted at the rate on the day you were paid. If a US business client asks for a W-8BEN, fill it out so they don’t withhold US tax — you’re taxed in Canada. Our guide for Canadians with US clients covers it.
Foreign income still counts toward your $30,000 GST/HST threshold, even though sales to clients outside Canada are usually zero-rated.
The GST/HST threshold
Cross $30,000 over four consecutive quarters and registration is mandatory. A full-time VA with steady clients gets there. Once registered, you charge GST/HST to Canadian clients and claim back the GST/HST on your software and equipment. For a low-overhead VA, the Quick Method often comes out ahead.
Equipment over $500
The standard rule: gear under $500 is deducted in full now; over $500 is a capital asset deducted over years through CCA (computers are Class 50, 55%). A $200 headset deducts now; a $1,600 laptop is CCA.
Deadlines
| Deadline | What’s due |
|---|---|
| April 30 | Tax balance owing (payment) |
| June 15 | T1 + T2125 filing (self-employed) |
Let Accountly handle the admin behind your admin
Accountly logs client income, sorts your software subscriptions and home-office costs into the right T2125 lines, converts USD payments at the right rate, and flags the $30,000 GST/HST line. Your return builds itself as you work.
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Frequently asked questions
Do virtual assistants pay taxes in Canada?
Yes. VA income is self-employment income reported on a T2125. No tax is withheld from client payments, and you also pay both halves of CPP, so set aside 25–30% as you go.
Can I deduct my home office as a VA?
Yes — it’s usually your largest deduction. Claim the business-use percentage (workspace square footage ÷ total home area) of rent, utilities, and internet.
Are my software subscriptions deductible?
Yes — the business-use portion is deductible. Project management, design, scheduling, and workspace tools are current expenses deducted in the year you pay them.
How do I handle US or international clients?
Report income in Canadian dollars at the exchange rate on the day you were paid, and provide a W-8BEN to US business clients so they don’t withhold US tax — you’re taxed in Canada.
When do I register for GST/HST?
Once revenue exceeds $30,000 over four consecutive quarters. Foreign client income counts toward the threshold even though it’s usually zero-rated.
How much should I set aside for taxes as a VA?
Reserve 25–30% of each payment for income tax and CPP, plus any GST/HST you collect once registered.
The information in this guide is for general informational purposes only and is not intended as accounting, tax, business, or legal advice. Accountly does not provide professional services or act as your accountant, tax advisor, or lawyer. No client relationship is created by your use of this material. Always seek advice from qualified professionals who understand your particular circumstances before acting on any information contained herein.
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