Wave is genuinely good and genuinely free, which is why so many Canadian freelancers start there. The catch shows up at tax time: Wave is general small-business accounting, double-entry ledgers, chart of accounts, the works, and it stops short of handing you a T2125. If you’re a sole proprietor who just wants the tax form done, that gap matters. Here’s the alternative.
What Wave does well, and where it leaves you
Wave gives you free invoicing and accounting with real double-entry bookkeeping. For a lot of people that’s plenty.
But it was built as small-business accounting software, not self-employed tax software. So:
It speaks accounting, not T2125. You get a chart of accounts and financial statements, then you (or your accountant) still have to translate them into the CRA’s T2125 categories.
It’s light on Canadian self-employed specifics. GST/HST threshold tracking, mileage logs for vehicle claims, and CRA-category receipt sorting aren’t its focus.
In our assessment, support and some features feel more US-oriented, which some Canadian sole proprietors tell us they notice.
What to look for instead
| Need | Why it matters |
|---|---|
| T2125-native categories | Skip translating a chart of accounts into the tax form |
| GST/HST + $30K threshold tracking | Know when to register; capture input tax credits |
| Mileage tracking | Vehicle deductions need a CRA-compliant log |
| Receipt capture to CRA categories | Deductions caught as you spend |
| Made for one person, not a ledger | Simple enough to actually keep up with |
Where Accountly fits
Accountly is narrower than Wave on purpose: it does the self-employed Canadian’s job and skips the parts a sole proprietor doesn’t need.
T2125, not a chart of accounts. Your income and expenses land in CRA categories and your T2125 totals update live, so there’s nothing to translate in April.
GST/HST aware. Tracks revenue against the $30,000 threshold and captures input tax credits.
Mileage and receipts built in. Log business kilometres and snap receipts that sort themselves.
Built in Canada, for the T1/T2125. It’s designed for exactly your return, not a generic ledger.
How they compare
| Wave | Accountly | |
|---|---|---|
| Price | Free (with paid add-ons) | Paid, sole-proprietor pricing |
| T2125-ready categories | No (general accounting) | Yes |
| GST/HST + $30K threshold tracking | Basic | Yes |
| Mileage tracking | No | Yes |
| Best fit | DIY bookkeepers comfortable with accounting | Sole proprietors who want the tax form done |
Honest take: if you’re comfortable with double-entry bookkeeping and free is the priority, Wave is a reasonable choice. If you’d rather the T2125 be ready without translating ledgers, that’s the trade Accountly makes. We lay it out fully in Accountly vs. Wave vs. spreadsheets.
Switching is quick
No ledger migration. Start logging from your switch date, backfill the current tax year from bank and card statements, done. Try Accountly free — about five minutes, no credit card.
Frequently asked questions
Is Wave good for self-employed Canadians?
Wave is free and capable, but it’s general small-business accounting that doesn’t produce a T2125 or focus on Canadian self-employed specifics like GST/HST threshold tracking and mileage. It suits people comfortable doing their own bookkeeping.
What’s the best alternative to Wave for sole proprietors in Canada?
Look for a tool built around the T2125 with GST/HST and mileage tracking. Accountly is purpose-built for self-employed Canadians; QuickBooks is an option but heavier and pricier.
Does Wave generate a T2125?
No. Wave gives you accounting reports and a chart of accounts, which then have to be mapped to the CRA’s T2125. A Canada-first tool produces the form’s categories directly.
Is it worth paying when Wave is free?
If free general accounting covers you, stay. If translating ledgers into a T2125 every spring is the pain, paying for software that produces the form directly can save hours and missed deductions.
Do I need to move my data from Wave?
No. Focus on the current tax year — start fresh from your switch date and backfill from statements. There’s no multi-year migration.
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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