Depreciation Calculator (CCA)

Capital Cost Allowance (CCA) in Canada

Capital Cost Allowance is the Canadian tax system’s method for depreciating business assets. Instead of deducting the full cost of an asset in the year of purchase, CRA requires you to claim a percentage each year based on the asset’s CCA class. The system uses the declining balance method, meaning the deduction is calculated on the remaining undepreciated capital cost (UCC) rather than the original cost. The half-year rule applies in the first year: CCA is calculated on only 50% of the net addition to the class, regardless of when during the year the asset was acquired.

The Accelerated Investment Incentive, introduced in the 2018 Fall Economic Statement, was winding down after 2023, but the Budget 2025 Implementation Act, No. 1 (royal assent 26 March 2026) brought it back in full. Property acquired after 2024 that becomes available for use before 2030 gets a first-year claim of 1.5 times the normal rate on its full cost, with the half-year rule suspended. That is three times the ordinary first-year amount: $22,500 instead of $7,500 on a $50,000 Class 10 vehicle. Manufacturing and processing equipment (Class 53), clean energy equipment (Class 43.1) and zero-emission vehicles (Classes 54 to 56) are again fully expensed in the first year, and Class 50 computers are fully expensed if available for use before 2027. The enhancements phase down for property that becomes available for use from 2030 to 2033 and end after 2033. Used property previously owned by you or a non-arm’s-length person does not qualify, so the half-year rule still applies to it.

Common CCA Classes and Rates

CCA is optional—you can claim less than the maximum in any year, which is useful if your income is low and the deduction would be wasted. Unused CCA carries forward in the UCC balance indefinitely. When you sell a depreciable asset, the proceeds reduce the UCC of the class. If the UCC goes negative, the resulting amount is recaptured as income. Proper CCA planning, especially around year-end asset purchases, can meaningfully reduce your business tax burden.