--- title: "Cell Phone Allowance and Expenses: What the CRA Allows" url: https://www.everstonecpa.com/blog/business-use-of-cellphone-internet-canada description: "Cell phone allowance and expenses: what the CRA lets you claim for phone and internet used for work, the business portion, and when it is taxable. See it." type: guide updated: 2026-10-08 summary: "Phone and internet costs are deductible to the extent they are incurred to earn income, so a mixed-use bill has to be apportioned. The CRA expects a reasonable, supportable basis rather than a round number. Where a corporation pays an owner-employee’s bill, separate taxable-benefit rules apply." faq_count: 7 publisher: EverStone CPA Inc., a Chartered Professional Accountant firm registered with CPA British Columbia and CPA Alberta service_area: British Columbia, Alberta, Ontario and Manitoba language: en-CA contact: info@everstonecpa.com · https://www.everstonecpa.com/book-online --- [Home](https://www.everstonecpa.com/) [Blog](https://www.everstonecpa.com/blog) Business Use of Cellphone and Internet: What the CRA Accepts Tax # Cellphone and internet: *splitting business from personal use* By EverStone CPA · Updated September 2026 · 7 min read **Quick answer:** Phone and internet costs are deductible to the extent they are incurred to earn income, so a mixed-use bill has to be apportioned. The CRA expects a reasonable, supportable basis rather than a round number. Where a corporation pays an owner-employee’s bill, separate taxable-benefit rules apply. **Paying staff or yourself for a phone?** We set up the allowance or reimbursement so it is deductible to the company and tax-free where the rules allow, inside bookkeeping from $325 a month. [Get My Fixed Quote](https://www.everstonecpa.com/book-online?service=monthly#enquiry-form) A round number with nothing behind it is what gets adjusted. **Rather have a CPA handle this?** A CPA at EverStone replies with a straight answer and a fixed fee for your situation. [Get My Fixed Quote →](https://www.everstonecpa.com/book-online) ## Key takeaways - Telephone and utilities are deductible where the expense was incurred to earn income. - Mixed personal and business use has to be apportioned on a reasonable, documented basis. - Where a corporation provides a cell phone it owns for employment duties, the fair market value of the device is generally not a taxable benefit. - A cell phone plan provided to an employee can be non-taxable if it meets all of the CRA’s administrative conditions. - For home internet a corporation pays or reimburses, the business-use portion is not a taxable benefit but the personal portion is. Few people have a phone or internet connection used only for business, so these are among the most misclaimed small business expenses, usually because a split was guessed once and repeated for years. ## Claiming cellphone and internet costs as a business expense The CRA’s guidance on [business expenses](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/business-expenses.html) allows telephone and utilities incurred to earn income. A mixed-use bill is deductible only for the business portion, which must be worked out, not assumed. The CRA internet expense test is the same: a home connection is deductible only to the extent it is used to earn income, on a basis you can support. Utility costs for a home workspace are claimed as business-use-of-home expenses, not a separate line, so if you claim a [home office](https://www.everstonecpa.com/blog/home-office-expenses-incorporated-business-canada), do not count them twice. **Want these bills claimed without a fight?** Our bookkeeping, from $325 a month, applies a defensible business percentage to phone and internet and keeps the backup the CRA asks for. See [our bookkeeping](https://www.everstonecpa.com/accounting-services), or [get a quote](https://www.everstonecpa.com/book-online). [Get My Fixed Quote](https://www.everstonecpa.com/book-online) ## What a defensible split looks like There is no prescribed percentage. What the CRA expects is a reasonable basis you can explain and support. In practice that means one of: - **A usage sample.** Review a representative period of itemized billing or call and data logs, work out the business share, and apply that percentage for the year — the same logic as keeping a [mileage log](https://www.everstonecpa.com/blog/vehicle-mileage-deductions-canada-business) for a vehicle. - **A line count.** Where a plan covers several lines and one is used only for business, that line’s cost is straightforward. - **Hours or devices for internet.** A home connection shared by a household is rarely mostly business. Tie the estimate to something — work hours against total household use, or the share of the home used for work. **The cleanest answer is separation.** A dedicated business line, or a separate business internet account, removes the apportionment question entirely. Where that is not practical, write down the basis for your percentage and keep the workings with your [records](https://www.everstonecpa.com/blog/cra-record-retention-how-long-to-keep-records). ## Cell phone allowance or company plan: if your corporation pays For an incorporated owner who is also an employee of the company, a second set of rules applies. The CRA’s guidance on [cell phone and internet services](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/benefits-allowances/provided/cellular-phone-internet-services.html) sets out the administrative policy: - **The device.** Where the employer provides a cell phone it owns and requires the employee to use it as part of their employment duties, the fair market value of the device is not a taxable benefit. If the employee buys the phone and the employer reimburses them, the administrative policy does not apply and the fair market value is a taxable benefit. - **The plan.** A service plan is not a taxable benefit where all of the CRA’s conditions are met: the employer requires the employee to use the plan as part of their duties, the plan has a reasonable fixed cost, and the employee’s personal use does not result in additional charges beyond the plan cost. Extra charges caused by personal use are a taxable benefit unless the employee reimburses them. - **Home internet.** Where the employer provides or reimburses home internet, the business-use portion is not a taxable benefit and the personal use is taxable. - **Allowances.** A cash allowance for phone and internet is always a taxable benefit under the CRA’s policy. Employers must be able to justify the plan cost as reasonable for the job. Put simply, a CRA cell phone allowance paid in cash is always a taxable benefit, while a company-owned phone or a qualifying plan can be provided without one. Related: [The company car taxable benefit: what owning a vehicle in your corporation really costs](https://www.everstonecpa.com/blog/company-car-taxable-benefit-canada). ## Writing off a cell phone for business: common mistakes Common errors: claiming the full bill for a personal phone or household internet, counting a utility twice through a [home office claim](https://www.everstonecpa.com/blog/home-office-deduction-corporation-canada) and a separate line, and running a personal plan through the corporation with no benefit reported. Each is small, but easy for a reviewer to spot and project across years. A separate expense account helps; see [a chart of accounts for small business](https://www.everstonecpa.com/blog/chart-of-accounts-small-business-canada). ## The Maple Ridge commuter consultant A Maple Ridge consultant serving Vancouver or Burnaby clients works from a phone and home connection. A corporate plan with a reasonable personal-use estimate is easier to defend than a personal plan expensed at a percentage. [Accountants in Maple Ridge BC](https://www.everstonecpa.com/accountant-maple-ridge). ## The bottom line Phone and internet are deductible to the extent they earn income, and when a corporation pays for an owner-employee, taxable-benefit rules apply too. Pick a supportable percentage and keep the calculation. If your company pays these directly, have a CPA confirm the reporting before it becomes a multi-year pattern. Whether any of this applies to you turns on your year-end, your structure and what else is in the picture — [ask about your own situation](https://www.everstonecpa.com/quick-question) and a CPA replies, usually the same business day. Free either way. Sources - [Canada Revenue Agency — Business expenses](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/business-expenses.html) - [Canada Revenue Agency — Cell phone and internet services (taxable benefits)](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/benefits-allowances/provided/cellular-phone-internet-services.html) - [Canada Revenue Agency — Payroll](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll.html) This article is general information for Canadian business owners and is current as of July 2026. It is not tax, legal or accounting advice, and it does not create a client relationship. Tax rules change and your situation is unique, so please [speak with a CPA](https://www.everstonecpa.com/book-online) before acting on anything here. About this article **EverStone CPA** Prepared and reviewed by a CPA at EverStone CPA, serving businesses in BC, Alberta, Ontario and Manitoba. [About the firm →](https://www.everstonecpa.com/about) · [Send an enquiry →](https://www.everstonecpa.com/book-online) A business portion holds up when the method behind it is written down once and applied the same way every month, which is how we handle it in [the monthly books](https://www.everstonecpa.com/monthly-bookkeeping-services). ### Keep reading [Home office expenses when incorporated →](https://www.everstonecpa.com/blog/home-office-expenses-incorporated-business-canada) [Vehicle mileage deductions →](https://www.everstonecpa.com/blog/vehicle-mileage-deductions-canada-business) [How long to keep your records →](https://www.everstonecpa.com/blog/cra-record-retention-how-long-to-keep-records) FAQ ## Frequently asked questions **Can I deduct my whole cell phone bill?** Only if the whole bill was incurred to earn income. A phone used for business and personal calls is deductible only for the business portion. **How do I work out the business percentage?** No set percentage applies. Use a supportable basis, such as itemized bills or data logs over a representative period, a dedicated line, or a documented work-use estimate, and keep the calculation. **Is a cell phone my corporation provides a taxable benefit?** Under CRA policy, a phone the employer owns and requires the employee to use for work is not a taxable benefit. Different rules apply if the employee buys it and is reimbursed. **When is a phone plan paid by my company non-taxable?** Only if all conditions are met: the employer requires its use for work, the plan has a reasonable fixed cost, and personal use adds no charges beyond the plan cost. **What about home internet the corporation pays for?** If an employer provides or reimburses home internet, the business portion is not a taxable benefit and personal use is. A cash allowance for cell phone and internet is always taxable. **Can I claim internet twice if I also claim a home office?** No. Home-workspace utilities must be claimed as business-use-of-home expenses and cannot be claimed again on another line. **Is a cell phone allowance taxable?** Yes. A cash allowance for cell phone and internet is always a taxable benefit. If the employer provides or reimburses the service, only personal use is taxable. ## Not sure how much of your phone and internet to claim? Tell us how you use them and whether you are incorporated. A CPA replies by email within one business day with the split we would use and a fixed fee for the books. [Get My Fixed Quote](https://www.everstonecpa.com/book-online)[Book a Paid Advice Call](https://www.everstonecpa.com/advice-call) ## Have a question about this? Ask free through [the quick-question form](https://www.everstonecpa.com/quick-question); a CPA replies within one business day. Need more? A 45-minute **Advice Call** is $225 plus GST, credited to your first invoice if you become a client within 60 days. Want us to take it on? [Send an enquiry](https://www.everstonecpa.com/book-online). [Ask a Free Question](https://www.everstonecpa.com/quick-question) [Book a Paid Advice Call](https://www.everstonecpa.com/advice-call) Email info@everstonecpa.com ★★★★★ “…have been completing my bookkeeping, taxes and financials for the last 2 years and they have been amazing. Thank you!” R. H. · Google review **Run your own numbers with the free calculators:** [compare salary against dividends](https://www.everstonecpa.com/salary-vs-dividends-calculator) · [check when your T2 is due](https://www.everstonecpa.com/t2-deadline-calculator) · [check whether instalments apply to you](https://www.everstonecpa.com/tax-instalment-calculator) [← Business number and CRA program accounts: RC, RP, RT and RZ explained](https://www.everstonecpa.com/blog/business-number-program-accounts-canada) [Capital cost allowance: how CCA classes actually work →](https://www.everstonecpa.com/blog/capital-cost-allowance-cca-classes-canada) --- Source: https://www.everstonecpa.com/blog/business-use-of-cellphone-internet-canada Prices: https://www.everstonecpa.com/pricing · Contact: info@everstonecpa.com · https://www.everstonecpa.com/book-online