What Types of Membership/Subscription Expenses Can You Deduct?
If you’ve tried to sign up for a service recently, chances are that you will be directed to a monthly subscription. The monthly price seems attractive, since it is likely lower that the lump sum that you would have paid in the past. You sign up and think that you will cancel in a month or two once you have extracted the value that you came for. But, it often isn’t that easy. These memberships are designed to keep you subscribed by drawing you into an ecosystem that can be difficult to leave without disrupting your workflow.
As a business owner, one of the upsides of subscriptions and/or memberships is that you can usually deduct it as a business expense as long as it’s directly related to earning business income (and it isn’t specifically excluded).
Deductible memberships/Subscriptions
Generally, if a membership helps you run or grow your business, it’s deductible. Some common examples include:
Professional associations: If you’re required to maintain a designation (like CPA, lawyer, doctor, engineer), your annual dues are usually deductible under CRA’s guidance on business expenses. Source.
Business or industry groups: If you have a memberships in organizations that support your business operations such as chambers of commerce, trade associations, or networking groups, these are also deductible. Source
Educational or resource memberships: Subscriptions or memberships that provide training, guidance, or tools you use to manage your business.
Popular examples include: Dropbox, Canva, Etsy fees, Adobe etc.
Non-deductible memberships
Unfortunately, not all memberships qualify, even if you use them primarily for business or networking. The CRA (and Revenu Québec if you’re in Quebec) generally disallows memberships that are primarily personal. Examples of non deductible memberships include:
Social clubs: Golf, country clubs, gyms, or sports clubs even if you sometimes network there, are specifically not deductible.
According to CRA, a taxpayer cannot deduct:
outlays or expenses for the use or maintenance of a property that is a yacht, camp, lodge or a golf course or facility unless they were incurred in the ordinary course of a taxpayer's business of providing the property for hire or reward; or
membership fees or dues in any club if the main purpose of the club is to provide its members with dining, recreational, or sporting facilities.
Personal-interest memberships: Anything that’s not clearly tied to your business operations.
Mixed-use memberships: If it’s partly personal, only the business-related portion can be deducted (though in practice, this might be difficult to justify).
Sales Tax (GST/HST or QST) On Memberships
If the membership fee includes sales tax and it’s related to your taxable business activities and deductible according to the rules above, you can usually claim the input tax credits (ITCs) or input tax refunds (ITRs). That means you get to recover the tax paid, in addition to deducting the cost.
Accounting for Memberships/Subscriptions
Beyond knowing whether a membership is deductible, it’s important to track them properly in your books. Here are a few guidelines:
Use a clear category/account:
It should be noted that choosing an account or category for your membership subscriptions is not fixed in stone. You can choose an account that makes the most sense for your context and also helps you to get the most meaningful data from your profit and loss statement.
The best category often depends on the purpose of the subscription. Importantly, you should be consistent in whatever account fits best.
Examples of Categories/Accounts for Membership Subscriptions:
A Canva subscription might fit under Advertising & Promotion Expenses.
Your website hosting fee could also go under Advertising or Computer Software Expenses.
A Microsoft 365 or Dropbox subscription might fall under Office Expenses or Computer Software Expenses.
A bank account package or monthly credit card fee would go under Bank Charges.
Professional association dues usually belong in Dues & Subscriptions.
Distinguish business vs. personal:
If you pay for something like a phone, software, or streaming service that has both business and personal use, only the business portion is deductible. In QuickBooks Online or a spreadsheet, make an adjustment to reflect that split.
Watch/Automate recurring charges:
Many subscriptions are automatic. Regularly reconcile your bank or credit card statements to ensure you’re reflecting your monthly subscriptions. If you use an accounting software such as QuickBooks Online, you can automate recurring charges.
Plan for annual renewals:
Some memberships bill annually instead of monthly. Setting aside funds each month can prevent surprises when the renewal hits.
Track sales tax:
Note that not every membership/subscription charges GST/HST and/or QST (especially if they are non Canadian). If GST/HST or QST is included, make sure you record the tax portion so you can claim input tax credits (if eligible).
Also, note that some non Canadian service providers such as Google and Facebook are required to charge GST/HST and QST, however, the system works a little differently for them. They might ask you for your sales tax numbers (if you are registered) in which case they will not charge you sales taxes at all.
Other tips
Pay from your separate business account. This greatly simplifies tracking of your expenses.
Keep receipts and invoices. Record the purpose of the membership in case you ever need to refer back to it or explain it to CRA or RQ.
Review your subscriptions. Over time, you may be paying for memberships you no longer use. Make sure you review them regularly and cut out anything you don’t need.
Final Thoughts
Memberships can absolutely be a valid business expense and are increasingly becoming a common cost for most businesses. Just make sure that they are being used to generate income for your business, they are not specifically excluded (remember gym memberships are not deductible) and that you track them properly so you can take advantage of the tax benefit.
Want to Simplify Your Taxes?
📝 Stay Organized
Get your free Small Business Tax Return Checklist to help you gather the key documents and information needed to prepare your return.
📘 Learn the Essentials
Check out my Small-Business-Tax-Resources for clear, practical guidance on Canadian small business taxes written specifically for self-employed individuals and small business owners in Canada.
🎥 Looking for Personalized Guidance
Book a consultation to get your tax questions answered and receive advice customized to your unique situation.
