If you work from a shared workspace, tax season brings an obvious question: is a coworking membership tax deductible in Canada? For most self-employed people and businesses, the answer is yes. For employees, however, the rules are much stricter. This guide explains who can claim it, where it goes on your return and which records the Canada Revenue Agency (CRA) expects you to keep.
This article is general information, not tax advice. Your situation may differ, so confirm your claim with an accountant before you file.
Is a Coworking Membership Tax Deductible?
Whether a coworking membership is tax deductible depends mainly on who pays for it and why.
| Who pays | Deductible? | Where it’s claimed |
| Self-employed person or freelancer | Yes, for the business portion | Form T2125 with your personal return |
| Incorporated business | Yes | The corporation’s T2 return |
| Employee | Only in narrow cases | Form T777 and line 22900, with a signed T2200 |
| Employer paying for staff | Generally yes | The employer’s business return |
In short, the deduction follows the business. If a business pays to earn income, it can usually deduct the cost. Still deciding whether to join? Read is a coworking space membership right for your business.
Is a Coworking Membership Tax Deductible If You’re Self-Employed?
If you run a sole proprietorship, your coworking membership is generally a deductible business expense. The CRA allows you to deduct expenses you incur to earn business income, as long as they’re reasonable.
That covers most of what you pay for at a coworking space, including:
- A monthly membership in a coworking space Ottawa location
- Day passes for the days you work outside your home
- Meeting room bookings for client meetings
- A virtual office address and mail handling for your business
You report these costs on Form T2125, Statement of Business or Professional Activities. Many people list them as rent, since you’re paying for workspace. Your accountant can confirm the right line for your setup.
There’s one important catch. If you also use the space for personal projects, you can only deduct the business share. For example, if a quarter of your time there goes to a hobby, deduct about three-quarters of the cost.
Incorporated Businesses
For a corporation, a coworking membership is tax deductible as a regular operating expense on its T2 return. This applies whether the company books a single desk or leases private office space for rent for its whole team.
However, be careful when an owner-manager uses company-paid space for personal reasons. The CRA can treat a company’s payment of a shareholder’s personal costs as a taxable shareholder benefit. So keep the membership in the company’s name and use it for company work.
Is a Coworking Membership Tax Deductible for Employees?
Usually, no. Employees face much narrower rules than business owners. You can only deduct office rent if all of these are true:
- Your employment contract requires you to rent an office and pay for it yourself.
- Your employer signs Form T2200, Declaration of Conditions of Employment, confirming that requirement.
- You weren’t reimbursed, or you included any reimbursement in your income.
If you meet all three, you claim the cost on Form T777 and report it on line 22900, other employment expenses.
On the other hand, if you simply prefer coworking to working from home, the cost isn’t deductible. In that case, the better route is to ask your employer to pay for your membership. Some employers already do this for remote and hybrid staff, and they can usually deduct it as a business expense.
Coworking and the Home Office Deduction
Many freelancers split their week between home and a shared office space in Ottawa. That raises a common question: can you claim both?
You can, but only if each claim meets its own test. According to the CRA, you can deduct business-use-of-home expenses if you meet one of two conditions:
- The home space is your main place of business
- You use it only to earn business income, and you use it regularly to meet clients or customers.
Your coworking membership stays tax deductible either way. The real question is whether your home office still qualifies. If your coworking desk becomes your main place of business, your home office may no longer pass the first test. In that case, you’d need to meet clients at home regularly to keep claiming it.
Also, note two more rules. First, you can’t deduct the same cost twice. Second, home office expenses can’t create or increase a business loss, although you can carry the unused amount forward.
You may have read online that you must work from home “more than 50% of the time.” That 50% test exists, but it applies to employees claiming a home office, not to self-employed people. If you’re self-employed, rely on the two conditions above.
Claiming GST/HST on Your Coworking Membership
If your business is registered for GST/HST, you can usually recover the HST you pay on your membership. The CRA calls these input tax credits, and they apply to costs you use in your commercial activities.
There are a few things to check:
- Your invoices should show the supplier’s GST/HST number.
- The Quick Method works differently. If you use it, you generally don’t claim input tax credits on regular operating expenses like rent.
- Small suppliers who aren’t registered can’t claim input tax credits at all.
As a result, a tax deductible coworking membership can also give you back the HST you paid.
Which Coworking Costs Can You Deduct?
The CRA doesn’t treat every charge on a coworking invoice the same way. Here’s a general overview:
| Cost | Usual tax treatment |
| Monthly membership | Business expense |
| Day passes | Business expense |
| Meeting room rental | Business expense |
| Virtual office and mail handling | Business expense |
| Event space for a business event | Business expense, but food and drinks are usually limited to 50% |
| Furniture or equipment you buy | Capital cost, claimed over several years |
| Personal use of the space | Not deductible |
For example, if you book meeting room rental Ottawa space for a client workshop, the room is a business expense. Meanwhile, the catered lunch usually falls under the 50% meals and entertainment limit. The same split applies when you rent event space Ottawa venues for a client event.
Keep the Records the CRA Expects
Even when a coworking membership is tax deductible, the CRA can deny a claim you can’t prove. Therefore, keep:
- Every invoice and receipt for your membership, day passes and room bookings
- Proof of payment, such as bank or credit card statements
- A note on business purpose each time you book a meeting room or event space, such as the client or project
- A simple usage log if you split time between home, coworking and personal use
The CRA generally expects you to keep records for six years from the end of the tax year they relate to. Electronic records, including scanned receipts, are accepted, as long as they’re clear, complete and backed up.
Frequently Asked Questions
Is a coworking membership tax deductible for freelancers in Canada?
Yes. A coworking membership is generally a deductible business expense for self-employed people, as long as you use it to earn business income. Report it on Form T2125.
Can I deduct a coworking day pass?
Yes, if you use the day for business. Day passes count as a business expense, just like a monthly membership.
Can an employee deduct a coworking membership?
Only if the employment contract requires you to rent an office, your employer signs Form T2200, and you weren’t reimbursed. Otherwise, ask your employer to cover it.
Can I claim both coworking and a home office?
Yes, if each one qualifies on its own. However, your home office must still be your main place of business or a space you use only for business and regular client meetings.
Is a virtual office tax deductible?
Generally, yes. For a business, a virtual offices Ottawa plan is a regular operating expense, like any other business service.
Can I claim the HST on my membership?
If you’re a GST/HST registrant and use the space for business, you can usually claim the HST as an input tax credit.
Make Your Workspace Work at Tax Time
A tax deductible coworking membership lowers your tax bill while giving you a professional place to work. To get the most from it, keep it in your business’s name, track your business use and save every invoice. Then review the claim with your accountant before you file.
Ready to find the right setup? Compare our membership plans, or book a day pass to try the space first.