How to Fill Out T2125 as a Real Estate Agent in Canada
Every self-employed agent in Canada must file a T2125 with their tax return. This is your line-by-line guide — written specifically for agents, not accountants.
10 min read
What is the T2125?
The T2125 — officially called the Statement of Business or Professional Activities — is the CRA form where self-employed individuals report their business income and expenses. As a real estate agent operating as an independent contractor (which is the vast majority of agents in Canada), you are required to complete this form and attach it to your T1 personal income tax return every year.
Your fiscal period is typically January 1 to December 31. The filing deadline for self-employed individuals is June 15, but any balance owing is still due by April 30.
Before you start: what you need
Gather the following before you sit down to fill out the T2125. Having these ready will save you time and reduce errors.
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T4A slips from your brokerage
Shows total gross commission paid to you during the tax year.
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Business expenses organised by category
Receipts, bank statements, or accounting software reports broken down by advertising, vehicle, office, etc.
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Home office measurements
Square footage of your dedicated workspace and total home area, plus related bills (rent/mortgage interest, utilities, insurance).
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Vehicle logbook
Total kilometres driven and business kilometres driven during the year, with trip-by-trip records.
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Capital cost allowance (CCA) schedule
List of depreciable assets (computer, camera, drone) with purchase dates, costs, and CCA class.
Line-by-line breakdown
The T2125 is a long form, but not every section applies to every agent. Below is a walk-through of the parts that matter most for real estate professionals.
Part 1 — Business Identification
| Field | What to enter |
|---|---|
| Industry code | 531210 — Real estate agents and brokers |
| Business name | Your legal name, or your registered trade name if you operate under one |
| Fiscal period | January 1 to December 31 (for most agents) |
| Partnership | Select “No” unless you operate within a formal partnership structure |
Part 2 — Business Income (Lines 8000–8230)
| Line | Description |
|---|---|
| 8000 | Gross professional fees — Enter the total commission amount from your T4A slip(s). This is your gross commission before your brokerage takes its split. |
| 8230 | Subcontracts / returns — Subtract any adjustments, returns, or allowances. Most agents leave this at zero. |
Important: Report the full gross commission from your T4A — do not subtract your brokerage split here. The brokerage's share goes under expenses (Line 8871). If you subtract it from income, your numbers won't match what the CRA has on file and you may trigger a review.
Part 3 — Business Expenses (Lines 8521–9281)
These are the lines most relevant to real estate agents. You may not use every line — only claim what you actually spent.
Advertising & marketing
Social media ads, Google Ads, print flyers, signage, Just Listed/Just Sold cards, professional photography costs.
Agent tip: This is often one of your largest deductions. Keep every receipt and screenshot of digital ad spend.
Business taxes, fees, licences
Real estate board dues, MLS fees, CREA fees, provincial regulator fees (RECO, RECBC, etc.), lockbox fees.
Agent tip: Include your annual board membership renewal, technology levy, and any mandatory insurance levies from your board.
Insurance
Errors & omissions (E&O) insurance premiums.
Agent tip: If your brokerage deducts E&O from your commission, it still shows here as an expense — the full commission goes on Line 8000.
Interest & bank charges
Interest on business loans or lines of credit, business bank account fees, payment processing fees.
Agent tip: If you carry a business credit card balance, the interest portion is deductible here.
Meals & entertainment
Client meals, coffee meetings, client appreciation events. Only 50% of the amount is deductible.
Agent tip: Record who you met, the business purpose, and keep the itemised receipt. CRA auditors look closely at this category.
Office expenses
Office supplies, printer ink, stationery, small software subscriptions (CRM, e-signature, etc.).
Agent tip: Your Agent Runway subscription, MLS tools, and digital signature platform all belong here.
Office-in-home expenses
Proportional share of rent or mortgage interest, property tax, utilities, home insurance, internet — based on square footage of your dedicated workspace.
Agent tip: Measure your office space carefully. The CRA formula is (office sq ft / total home sq ft) × eligible expenses.
Professional fees
Accountant fees, bookkeeper fees, legal fees related to your business.
Agent tip: Your tax preparation fee for the business portion of your return is deductible here.
Management & administration fees
This is where your brokerage split goes — the portion of commission your brokerage retains.
Agent tip: This is the most important line for agents. Your brokerage’s share is NOT subtracted from income — it goes here as an expense.
Travel
Flights, hotels, and meals for business travel (conferences, out-of-town showings). Not regular vehicle use.
Agent tip: OREA or provincial association conferences count here. Keep boarding passes and hotel receipts.
Telephone & internet
Business portion of your cell phone plan, home internet (if not already claimed under home office), and any dedicated business phone line.
Agent tip: If you use one phone for both personal and business, estimate the business-use percentage and apply it consistently.
Motor vehicle expenses
Gas, insurance, maintenance, lease payments, parking — multiplied by your business-use percentage from your vehicle logbook.
Agent tip: You MUST keep a logbook. Without one, the CRA can deny your entire vehicle claim on audit.
Capital cost allowance (CCA)
Depreciation on capital assets: laptop, camera, drone, furniture. Claimed over multiple years based on CCA class and rate.
Agent tip: A laptop is Class 50 (55% rate). A camera is Class 8 (20% rate). Your accountant can calculate the optimal claim.
Other expenses
Anything that doesn’t fit above: staging supplies, courier fees, client gifts (up to $500 each), virtual tour software.
Agent tip: Always document what the expense was for. “Other” is a catch-all, but you still need receipts and a clear business purpose.
Part 4 — Net Income Calculation
| Line | Description |
|---|---|
| 9369 | Total expenses — Sum of all expense lines above. |
| 9945 | Net income (loss) — Gross income minus total expenses. This is your net self-employment income. |
| 9946 | Your share — If you're a sole proprietor (not a partnership), this equals Line 9945. This number flows to Line 135 of your T1 personal return. |
Common mistakes agents make on the T2125
Deducting brokerage split from income instead of expensing it
Your brokerage’s share goes on Line 8871 as an expense — not subtracted from Line 8000. Doing it wrong creates a mismatch with your T4A and can trigger a CRA review.
Not keeping a vehicle logbook
Without a contemporaneous logbook recording business versus personal kilometres, the CRA can deny your entire vehicle expense claim on audit. This is non-negotiable.
Claiming 100% of home office without proper calculation
You must calculate the proportional square footage of your dedicated workspace relative to your total home. Overclaiming is a common audit trigger.
Declaring less income than what’s on your T4A
The CRA already has your T4A on file. If your Line 8000 is lower than what your brokerage reported, expect a reassessment notice.
Counting HST/GST collected as income
HST/GST you collect is not business income — it’s held in trust for the CRA. It should not appear on your T2125. It’s reported separately on your GST/HST return.
Claiming personal meals as business expenses
Only meals with a clear business purpose (client meeting, prospect lunch) qualify — and even then, only 50% is deductible. Your Tuesday night takeout does not count.
Frequently asked questions
Do I need to file T2125 if my brokerage gives me a T4A?
Yes. The T4A reports the gross commission your brokerage paid you, but it does not report your expenses. As a self-employed agent, you file T2125 to report that income and claim all of your business expenses against it. The net result flows to your T1 personal return.
Where do I enter my brokerage commission split on T2125?
Your brokerage split goes on Line 8871 — Management and administration fees. Report the full gross commission on Line 8000 as income, then deduct the brokerage's share on Line 8871 as an expense. Do not subtract it from income directly.
Can I claim a home office on T2125 as a real estate agent?
Yes, if you use a dedicated space in your home regularly and exclusively for business. You can claim a proportional share of rent or mortgage interest, property tax, utilities, insurance, and internet on Line 8810. The proportion is typically calculated by square footage of the office versus total home area.
What is the industry code for real estate agents on T2125?
The NAICS industry code for real estate agents and brokers is 531210. You enter this in Part 1 of the T2125 form under business identification.
Want to track your T2125 numbers year-round?
Agent Runway automatically categorizes your income and expenses — so filing is just reading a report.
Filing shouldn't feel like guessing.
Agent Runway tracks your commission income and expenses throughout the year — so when it's time to fill out your T2125, the numbers are already there.
Disclaimer: This guide is for educational purposes only and does not constitute tax, legal, or financial advice. Tax rules change frequently and individual circumstances vary. Always consult a qualified accountant or tax professional for advice specific to your situation. Agent Runway assumes no liability for tax-related decisions.