You run inboxes, calendars, and projects for clients from your laptop. 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 (11.9% of net income above $3,500, up to the year’s maximum pensionable earnings), and set aside 25-30% of each payment as it lands. There’s no minimum: the first dollar from your first client counts. Net more than $74,600 (the 2026 maximum) and an extra CPP2 premium (8%) kicks in on the slice up to $85,000. Worth knowing about before you set your reserve rate.
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; computer equipment goes through CCA regardless of price |
| 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 using a consistent, supportable exchange-rate method. If a US payer requests Form W-8BEN, use it to document foreign status and claim treaty benefits only when they apply. Our guide for Canadians with US clients explains how the location of the work affects the result.
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 and registration is mandatory, and that can happen faster than “over four consecutive quarters” suggests: go over $30,000 in a single calendar quarter and you’re a registrant from the sale that put you over, not just once a trailing four-quarter total gets there. Charge GST/HST on that sale and register within 29 days. 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. One catch: it’s not available for bookkeeping services, so if bookkeeping is part of what you sell, check with an accountant first.
The $500 line isn’t a real cutoff
People treat “under $500, expense it; over $500, CCA it” as a general CRA rule, but it is not. The specific Class 12 threshold does not apply to computers, tablets, or cameras. Computer hardware generally goes through Class 50 regardless of price; classify other equipment based on what it is and how it is used.
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 records client income and organizes the expenses you enter into T2125 categories. Convert foreign-currency amounts using a supportable rate, and monitor the GST/HST registration tests yourself.
Start free. About five minutes.
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, and project management, design, scheduling, and workspace tools all count as current expenses deducted in the year you pay them.
How do I handle US or international clients?
Report income in Canadian dollars using a consistent, supportable exchange-rate method. Provide Form W-8BEN when a payer requests it, but do not assume the form guarantees zero withholding for every payment.
When do I register for GST/HST?
Once revenue exceeds $30,000, and that can trigger in a single quarter rather than only over four consecutive ones. 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.
Official CRA references
Check the CRA’s Form T2125 and business expense guidance against your tax year and circumstances.
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.