CCA classes, in plain English
Every depreciable asset belongs to a CRA class with a maximum rate. Learn six classes and you have covered most of what a small business buys. Rates below are the long-standing standard ones — confirm current-year rules with the CRA or your accountant before filing.
The classes you will actually use
Class 1 (4%): buildings. Class 8 (20%): furniture, fixtures, equipment — the catch-all. Class 10 (30%): vehicles, general-purpose. Class 10.1: passenger vehicles over the cost cap, with special rules. Class 12 (100%): small tools, dishes, some software — often fully claimable. Class 50 (55%): computers and systems software.
The half-year rule
In the year you acquire an asset you may generally claim only half the normal rate — the CRA's answer to buying on December 30th. Accelerated first-year rules have modified this in recent years for eligible property; your accountant will apply the current version.
Declining balance
CCA applies the rate to the remaining (undepreciated) balance, not the original cost — so the claim shrinks each year and the asset never quite reaches zero on paper.
Book depreciation and CCA are different numbers
Depreciation in your financial statements and capital cost allowance on your tax return are two legitimate answers to the same question, computed under different rules for different audiences. Treating them as one figure is a common small-business error that makes both the statements and the return slightly wrong.
They are meant to differ. Keeping them separate is correct, not sloppy.
The half-year rule catches people
In the year an asset is acquired, the claim is generally restricted — the first-year convention every Canadian accountant checks first. Businesses that compute a full year's claim on a December purchase overstate the deduction and invite a correction.
Class determines the rate, and the class is a property of the asset, so getting it right once at acquisition saves arguing about it annually.
What SeroBooks does with this
The fixed asset register carries acquisition date, cost, accumulated depreciation, book value, class, method and status, and opens book depreciation and the CCA schedule separately. The schedule computes by class with the half-year rule applied — opening UCC, additions, dispositions, rate, claim, closing UCC.
Depreciation posts to the ledger as journals, so the statements carry it without a side calculation, and disposals post proceeds and gain or loss properly rather than the asset simply vanishing.
See it in your own numbers.
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