Yes — coworking space membership fees and day passes are fully deductible as business expenses for Canadian self-employed freelancers and consultants. Unlike home office expenses, there is no percentage limitation or square footage calculation required. You pay for a business workspace and deduct the cost.
How to Claim Coworking Fees
Coworking membership fees, monthly dues, or day-pass costs are deductible on T2125 under “Rent” (line 8911 or the rent expense line) or “Other expenses”. The full amount is deductible — 100% — because it is a cost incurred exclusively for business purposes.
Example:
- Monthly coworking membership: $350/month
- Annual total: $4,200
- Deductible amount: $4,200 (100%)
- Enter on T2125 under “Rent” or “Other expenses”
Does Coworking Affect Your Home Office Deduction?
This is the most important question to get right. The CRA‘s home office deduction requires that your home be your principal place of business — meaning more than 50% of your work is performed there.
If you primarily work from a coworking space and only occasionally work from home, your home does not qualify as your principal place of business. You would lose the home office deduction.
If you split your time between home and coworking (e.g., 3 days home, 2 days coworking), you may still qualify — if more than 50% of your work occurs at home. Track your working days to confirm.
In a 50/50 home/coworking split: technically you do not meet the “more than 50%” test. However, many CPAs argue the “regular and continuous use to meet clients” alternative test may still apply if you do meet clients at home. The safest approach is to ensure your home genuinely qualifies if you plan to claim both.
What If You Use Both Home Office and Coworking?
You can claim both — as long as your home meets the eligibility test:
- Coworking fees: claimed as “Rent” on T2125, 100% deductible
- Home office expenses: claimed in Part 7 of T2125, with the appropriate percentage based on your workspace square footage
The two deductions are completely separate and do not interact with each other on the form.
Hot Desks vs Dedicated Desks vs Private Offices
All coworking configurations are deductible at 100% — the type of workspace (hot desk, dedicated desk, private office) does not affect deductibility. What matters is that the expense was incurred to earn business income.
If you also use a private coworking office for occasional personal tasks, the CRA expects you to claim only the business-use portion — but for a dedicated professional workspace, claiming 100% is defensible for virtually all freelancers.
GST/HST on Coworking Fees
If you are registered for GST/HST, the HST you pay on coworking fees is an ITC you can claim on your GST/HST return. Keep your coworking invoices showing the HST amount paid.
Frequently Asked Questions
What documentation does the CRA want for coworking expenses?
Keep your membership agreement, monthly invoices, and bank records showing payments. Invoices should show the coworking space name, address, date, amount, and HST (if applicable). These satisfy the CRA’s documentation requirements if you are audited.
Can I deduct day passes for client meetings at a coworking space?
Yes — individual day passes purchased to work or meet clients are deductible as “Other expenses” or “Rent” at 100%. Keep the receipt and a brief note of the purpose if you use a day pass only occasionally.
Is a coworking membership deductible if I also have a full-time employer?
Only for self-employment income. If you have both a full-time job and a self-employment side business, coworking fees are deductible only against the self-employment income on your T2125 — not against your employment income. You cannot deduct coworking costs as employment expenses unless your employer specifically required you to use a remote office and issued a T2200 (Declaration of Conditions of Employment).