Employee wages, CPP, EI, and benefits are deductible — but you can never deduct your own salary as a sole proprietor.
Know exactly what belongs on Line 9060 — and what the CRA says doesn't qualify.
Special CRA rules and percentage limits that apply to salaries, wages & benefits.
As a sole proprietor, you cannot deduct your own salary, wages, or drawings. Your business income after expenses IS your income. Only amounts paid to employees are deductible.
If you employ family members, the wages must be reasonable for the work performed. The CRA may disallow deductions for inflated wages paid to family members who do little or no actual work.
Section 67 of the Income Tax ActSee how different professionals use Line 9060 deductions in practice.
Hired a part-time labourer to assist with framing and drywall work on residential projects.
$18,000
$18,000 (100%)
Employed a part-time worker to pack and ship online orders from the home warehouse.
$8,400
$8,400 (100%)
These errors on Line 9060 can trigger a CRA review — here's how to get it right.
Trying to deduct own salary as a sole proprietor
Sole proprietors cannot deduct their own salary, wages, or draws. Your net business income after all other expenses is your taxable income.
Paying family members unreasonable amounts
Wages paid to family members must be reasonable for the work actually performed. The CRA can disallow deductions if the amount is excessive relative to the duties.
These categories are often mixed up with Salaries, Wages & Benefits. Here's the difference.
See how ScanForTax processes a typical salaries expense.
Internal Payroll Record
2025-03-31
Ontario
ScanForTax records this payroll entry and auto-categorizes it under Salaries, Wages & Benefits (Line 9060). The total includes gross pay plus employer-side CPP and EI contributions. No HST applies to payroll.
Profession-specific guides that frequently use Salaries deductions.
See how tax recovery works for salaries expenses in each province.
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