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Capital Cost Allowance (CCA)

2025
Asset Details
$
$

Undepreciated capital cost from prior years

CCA Summary

CCA Class 10

30.0%

Vehicles, computer hardware

First Year CCA

$7,500.00

5-Year Total CCA

$39,795.75

Half-Year Rule Applied: Only 50% of additions eligible for CCA in Year 1

5-Year CCA Schedule
YearOpening UCCAdditionsCCA ClaimedClosing UCC
Year 1$0.00+$50,000.00$7,500.00$42,500.00
Year 2$42,500.00-$12,750.00$29,750.00
Year 3$29,750.00-$8,925.00$20,825.00
Year 4$20,825.00-$6,247.50$14,577.50
Year 5$14,577.50-$4,373.25$10,204.25
Total CCA (5 years)$39,795.75$10,204.25

Annual CCA Claimed

Year 1$7,500.00
Year 2$12,750.00
Year 3$8,925.00
Year 4$6,247.50
Year 5$4,373.25
CCA Class Reference
ClassRateDescription
Class 14%Buildings acquired after 1987
Class 610%Frame buildings, fences, greenhouses
Class 820%Furniture, fixtures, equipment
Class 1030%Vehicles, computer hardware
Class 10.130%Passenger vehicles over $37,000
Class 12100%Computer software, tools under $500
Class 13S/LLeasehold improvements (straight-line)
Class 14S/LPatents, licences (straight-line over life)
Class 4330%Manufacturing equipment
Class 4425%Patents acquired after April 2019
Class 4630%Data network infrastructure
Class 5055%General-purpose computer equipment
Class 5430%Zero-emission vehicles (up to $61,000)
Class 5540%Zero-emission vehicles (no dollar limit)
More Information
Frequently Asked Questions
Capital Cost Allowance (CCA) is the tax deduction that Canadian businesses claim for the depreciation of capital assets. Unlike accounting depreciation, CCA is governed by the Income Tax Act and uses specific rates for different classes of assets. CCA allows businesses to recover the cost of capital investments over time by claiming a deduction against their business income each year. The deduction reduces taxable income and therefore the tax payable.
The half-year rule (also called the 50% rule) limits the CCA claim in the first year of asset acquisition. Only 50% of the net additions to a CCA class are eligible for CCA in the year of purchase. For example, if you purchase equipment worth $100,000 in Class 8 (20% rate), your first-year CCA is calculated on $50,000 (half), giving you a $10,000 deduction instead of $20,000. The full UCC is available for CCA in subsequent years. This rule prevents businesses from buying assets near year-end to claim a full year of CCA.
The AIIP was introduced in the 2018 Fall Economic Statement and provides an enhanced first-year CCA deduction. For eligible property acquired after November 20, 2018, the half-year rule is suspended, and an enhanced first-year deduction applies. For most classes, this means the first-year deduction is calculated on 1.5 times the net addition (effectively providing 150% of the normal first-year CCA). For certain zero-emission vehicles and clean energy equipment, a 100% first-year write-off is available. The AIIP is being phased out starting in 2024.
Recapture occurs when you sell an asset for more than the UCC balance of its class. The difference between the sale proceeds (up to original cost) and the UCC is added back to your income as recapture. This represents CCA that was previously overclaimed. Terminal loss occurs when you dispose of the last asset in a class and the UCC balance is positive. The remaining UCC is deducted as a terminal loss. Both recapture and terminal loss ensure that total CCA claimed matches the actual decline in value of the assets.
Both classes have a 30% CCA rate, but they apply to different types of vehicles. Class 10 covers general motor vehicles and computer hardware. Class 10.1 is specifically for passenger vehicles costing more than $37,000 (the prescribed limit for 2025). The key difference is that each Class 10.1 vehicle is placed in its own separate class. This means: no recapture when the vehicle is sold, no terminal loss, and each vehicle is depreciated independently. The $37,000 cost cap also limits the amount of CCA that can be claimed.
You can claim CCA on the business-use portion of your home, but this is generally not recommended. Claiming CCA on a principal residence will reduce the cost base for purposes of the principal residence exemption. When you sell the home, the CCA claimed must be recaptured as income. Most tax professionals advise against claiming CCA on a home office and instead recommend deducting operating expenses (utilities, insurance, maintenance) proportional to business use.
The Income Tax Regulations prescribe specific CCA classes for different types of assets. Common classes include: Class 1 (4%) for buildings, Class 8 (20%) for furniture and equipment, Class 10 (30%) for vehicles and computer hardware, Class 12 (100%) for computer software and small tools, Class 50 (55%) for general-purpose computers, and Class 54 (30%) for zero-emission vehicles. The CRA provides detailed guidance on which assets belong in which class. Misclassifying assets can result in reassessment.
No, CCA is optional. You can claim any amount of CCA up to the maximum allowed for the year (you cannot claim more than the maximum). This flexibility is valuable because you can defer CCA to future years when you expect to be in a higher tax bracket, or skip CCA in years when your income is below the personal amount threshold. Unused CCA simply remains in the UCC balance and is available for future claims. There is no time limit on when UCC must be claimed.

CRA-Aligned: Uses 2025 CCA rates and classes as prescribed by the Income Tax Regulations. AIIP availability may be limited for certain property acquired after 2023. Consult a tax professional for asset classification and optimal CCA strategies.

Understanding Capital Cost Allowance in Canada

How CCA lets you write off business assets over time

What is Capital Cost Allowance?

Capital Cost Allowance (CCA) is the CRA term for depreciation. When you buy an asset for your business — such as a computer, vehicle, or piece of equipment — you cannot deduct the full cost in one year. Instead, CCA lets you write off a portion of the cost each year over the useful life of the asset.

How are CCA classes determined?

The CRA groups assets into numbered classes, each with its own depreciation rate. For example, Class 10 covers motor vehicles at 30%, Class 50 covers computer hardware at 55%, and Class 1 covers buildings at 4%. The class your asset belongs to determines how fast you can write it off against your business income.

What is the half-year rule?

In the year you buy an asset, you can usually only claim CCA on half of its cost. This is called the half-year rule (also known as the 50% rule). For example, if you buy a $10,000 computer in Class 50 (55% rate), your first-year CCA is 55% of $5,000 = $2,750, not 55% of $10,000.

What is the Accelerated Investment Incentive?

The Accelerated Investment Incentive (AII) was introduced to encourage business investment. It lets you claim a larger CCA deduction in the first year by applying 1.5 times the normal CCA rate, instead of the half-year rule. This means you can write off assets faster and reduce your tax bill sooner. The AII applies to eligible property acquired after November 2018.

Can you claim CCA on a vehicle used for business?

Yes, but there are limits. Passenger vehicles costing more than $37,000 (before tax) are placed in Class 10.1 with a cap on the depreciable amount. If you use the vehicle for both business and personal purposes, you can only claim the business-use percentage. Keep a mileage logbook to support your claim.

What happens when you sell a depreciable asset?

When you sell or dispose of an asset, you may trigger recapture or a terminal loss. If the sale price exceeds the remaining undepreciated capital cost (UCC) of the class, the difference is added back to your income as recapture. If the UCC exceeds the sale price and no assets remain in the class, you can claim a terminal loss as a deduction.

Is CCA mandatory?

No. CCA is optional — you can claim any amount from zero up to the maximum allowed. This flexibility is useful if your business has a loss year and you want to save the deduction for a future year when your income is higher. Unused CCA carries forward indefinitely, so there is no deadline to use it.

CRA-Aligned: Based on 2025 CRA rates and thresholds. For personal advice, speak to a qualified accountant or tax professional.

Disclaimer: This calculator provides estimates based on current CRA rates and thresholds for the 2025 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified accountant before making financial decisions. Read our terms

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