What is the Saskatchewan small business tax rate?

In Saskatchewan, small businesses pay a combined federal and provincial rate of 10% on the first $500,000 of active business income (9% federal + 1% SK provincial). Income from $500,000 to $600,000 is taxed at 16%, and income over $600,000 is taxed at the general rate of 27%.

Should I pay myself salary or dividends in Saskatchewan?

The salary vs dividend decision depends on your specific situation. Salary provides RRSP contribution room and is tax-deductible for the corporation. Dividends have lower personal tax rates but don't create RRSP room. SK TaxGPT can calculate which option gives you more after-tax income based on your numbers.

What are the corporate tax filing deadlines in Canada?

Corporate tax returns (T2) must be filed within 6 months of your fiscal year-end. Corporate taxes owed are due either 2 months or 3 months after year-end depending on whether you qualify for the small business deduction. The tool helps you calculate your specific deadlines based on your fiscal year.

How do I calculate home office deduction in Canada?

Home office deductions are calculated based on the percentage of your home used for business. You can deduct a proportional amount of utilities, insurance, property taxes, mortgage interest, and maintenance. SK TaxGPT calculates this automatically based on your office square footage and total home size.

What are the CRA eligibility tests for home office deductions?

You qualify if your home office is your principal place of business (more than 50% of work), OR you use a dedicated space exclusively and regularly for meeting clients in person. Most self-employed Canadians qualify under the first test.

Can home office expenses create a business loss?

No. Home office expenses cannot create or increase a business loss. If your expenses exceed your business income, the excess carries forward to future years when you have sufficient income.

Can I claim mortgage principal as a home office expense?

No. You can only claim mortgage INTEREST, not principal payments. Principal is debt repayment, not an expense. This is one of the most common mistakes taxpayers make.

What is the simplified method for employees working from home?

Employees can claim $2 per day worked from home, up to a maximum of $500 per year (250 days). This flat-rate method requires no receipts or calculations, but is only available to employees, not self-employed individuals.

Home Office Expenses CRA: Complete Deduction Guide (2025)

Everything you need to claim work-from-home deductions in Canada

Quick Summary

What You CAN Deduct

Mortgage interest (not principal)
Property taxes
Home insurance
Utilities (heat, electricity, water)
Rent (if applicable)
Maintenance and repairs

What You CANNOT Deduct

Mortgage principal payments
Home purchase costs
Furniture (claim as CCA instead)
Major renovations
Personal portion of expenses

CRA Eligibility Tests

You can deduct home office expenses if your workspace meets ONE of these tests:

Test 1: Principal Place of Business

Your home office is where you mainly (more than 50%) conduct your business. This is the most common test for self-employed people who work from home.

Test 2: Client Meeting Space

Your home office is used exclusively for business AND you meet clients there regularly and continuously. “Regularly” means frequent, scheduled meetings - not occasional or sporadic use.

How to Calculate Your Deduction

Method 1: Square Footage (Most Common)

Business % = Office Square Feet ÷ Total Home Square Feet

Example: 150 sq ft office ÷ 1,500 sq ft home = 10% business use

Method 2: Number of Rooms

Business % = Rooms Used for Business ÷ Total Rooms

Only use this method if rooms are roughly equal size.

Example: Software Developer in Saskatchewan

Home Details

Total home: 1,800 sq ft
Office space: 180 sq ft
Business use: 10%

Annual Deduction

$2,080

10% of eligible expenses

Expense	Annual Cost	Business (10%)
Mortgage Interest	$12,000	$1,200
Property Taxes	$3,600	$360
Home Insurance	$1,200	$120
Utilities	$3,000	$300
Maintenance	$1,000	$100
Total	$20,800	$2,080

Important: The Loss Limitation Rule

Home office expenses cannot create or increase a business loss. Here's how it works:

Calculate your business income BEFORE home office expenses
Your home office deduction is limited to that amount
Excess carries forward to future years (indefinitely)

Example:

Business income (before home office): $2,000
Calculated home office expenses: $5,000
Allowable deduction this year: $2,000
Carryforward to next year: $3,000

Simplified Method for Employees

Employees (not self-employed) can use the simplified flat-rate method:

per day worked from home

250

maximum days

$500

maximum deduction

No receipts required. Only available to employees, not self-employed individuals.

Common Mistakes to Avoid

Including mortgage principal

Only interest is deductible

Claiming 100% of expenses

Must prorate by space %

Creating a business loss

Expenses limited to income

No documentation

Keep receipts and measurements

Claiming CCA on home

Usually not worth complications

Forgetting carryforward

Unused amounts carry forward

Documentation Required

Keep Records Of:

Floor plan showing office space measurement
Total home square footage
All expense receipts (utilities, insurance, etc.)
Mortgage statements showing interest portion
Evidence the space is used for business

Pro Tip: Take Photos

Photograph your home office setup annually. This proves a dedicated workspace exists and is set up for business use.

Calculate Your Home Office Deduction

Use our free SK TaxGPT calculator to estimate your home office deduction

Try SK TaxGPT Free

Related Tax Guides

Capital Cost Allowance (CCA)Depreciate business assets Employee vs ContractorCRA classification tests Dividend Tax in CanadaGross-up and tax credits Saskatchewan Tax Rates2025 personal & corporate rates

Sources

CRA Income Tax Folio S4-F2-C2 - Business Use of Home Expenses
CRA Form T2125 - Statement of Business or Professional Activities
CRA Guide T4002 - Business and Professional Income

Disclaimer: This is general tax information, not professional advice. Tax rules are complex and individual circumstances vary. Always consult a qualified accountant or tax professional for advice specific to your situation.