Canada Revenue Agency
www.cra.gc.ca
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Rooms used for daycare
Rooms for daycare use only
If you have one or more rooms that you use only for your daycare, including a finished or unfinished basement, you can determine the amount to claim based on the area you use.
You can claim expenses for the business use of your home by dividing the area of the home you use for your daycare by the total area of your home, and then multiplying the result by your total annual home expenses.
Example
Sonia has a daycare in her home, and she has a finished basement that she uses only for the children. The daycare area is 20 square metres and the total area of her home is 120 square metres. Sonia's annual household expenses are $6,000. She calculates the allowable part of her expenses using the formula:
Area used for business divided by the total area of the home multiplied by total expenses.
The calculation is as follows:
(20 ÷ 120 metres) × $6,000 in household expenses = $1,000
Sonia can deduct $1,000 of her household expenses as business-use-of-home expenses.
Rooms used for both daycare and personal living
If you use part of your home for both your daycare and personal living, calculate how many hours in the day you use the rooms for daycare, then divide that amount by 24 hours. Multiply the result by the daycare part of your total annual home expenses (see the previous example). This will give you the home expenses you can deduct.
If you run the business for only part of the week or year, reduce your claim accordingly.
Example
Danny runs a daycare in his home weekdays from 7:00 a.m. to 5:00 p.m. (10 hours out of a 24-hour day.) The children use an area of 35 square metres. The house is 100 square metres, and the annual home expenses are $5,800.
The calculation is as follows:
(10 ÷ 24 hours) × (35 ÷ 100 metres) × $5,800 expenses = $845.83
The daycare only operates 5 days per week, so Danny has to do another calculation.
The other calculation would be:
$845.83 × (5 ÷ 7 days) = $604.16
Danny can deduct a total of $604.16 for home expenses.
