T2125 Form: Reporting Self-Employment Income in Canada
T2125 is the Canadian equivalent of US Schedule C. Complete 2026 guide for Canadian small business.
April 24, 2026 1 min readby TinSuite Team
canadian tax canadian-t2125-form payroll
Form T2125 (Statement of Business or Professional Activities) is filed by sole proprietors and partnerships as part of their T1 personal tax return. It reports business income and expenses to arrive at net business income.
Essential details
- Filed with personal T1 return — deadline June 15 for self-employed (but tax owing still April 30)
- Reports gross revenue, COGS, operating expenses
- CCA (depreciation) claimed on eligible assets
- Home office: simplified or detailed method
- Motor vehicle: logbook required, actual or per-km approach
- Net income flows to T1 line 13500 (business) or 13700 (professional)
How to file correctly
1. Collect the data from your payroll records — don't reconstruct at year-end
2. Use official CRA forms — free downloads from canada.ca
3. File electronically when required (50+ slips)
4. Distribute copies to recipients by the deadline
5. Keep records for 6 years — CRA audit window
Common mistakes
- Missing the distribution deadline (last day of February for most slips)
- Using wrong box for income type
- Forgetting to remit source deductions monthly (PD7A)
- Not reconciling year-end to the T4 Summary
- Quebec employees: not filing the separate RL-1 slip
How TinSuite handles this
- Auto-generates T4, T4A, T5, RL-1 slips from your payroll data
- CPP, EI, and income tax calculated automatically
- Quebec-specific forms (QPP, QPIP) supported natively
- PD7A remittance reminders and calculations
- Bilingual EN/FR-CA interface
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