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How to use the Equipment Purchase Tax Savings Calculator

This calculator estimates the Year-1 income tax savings from equipment purchases using Capital Cost Allowance (CCA). It compares first-year deduction approaches and shows the estimated tax saved based on an approximate provincial marginal rate.

Step 1 — Enter client and income

Business income before CCA is the income available for deductions.
Province sets the estimated marginal tax rate used for “Tax Saved”.
Fiscal year-end is for reporting context.

Step 2 — Choose the Year-1 method

Normal (Half-year rule): Year-1 CCA is typically ½ × rate × cost.
AII (Accelerated Investment Incentive): Enhanced first-year CCA is commonly 1.5 × rate × cost (simplified).
DIEP / Immediate expensing (if eligible): May allow up to 100% write-off in Year-1, subject to a limit.

Step 3 — Add equipment lines

Enter up to 3 items (ID, Cost, GST/HST, CCA class, purchase date).
Cost drives the CCA calculation. GST/HST is shown separately.
Select the correct CCA class so the rate is applied properly.

Optional — Cap at income

If enabled, the calculator limits Year-1 deductions so they don’t exceed the income entered.
This helps avoid negative income in the estimate.

How to read the results

DIEP = immediate expensing applied to the item (if selected and limit available).
Year-1 CCA on remainder = either AII (if selected) or Half-Year (normal rule).
Total CCA = DIEP + Year-1 CCA on remainder.
Tax Saved = Total CCA × estimated marginal rate (province).

Important: This is an estimate and uses simplified assumptions. Actual eligibility and rates can vary by year, taxpayer type, and property details. Confirm treatment before filing.

Equipment Purchase Tax Savings Calculator

Client Name: Date of Calculation: Date of First Fiscal Year End: Amount of Business Income before CCA: Province of Residence:

Year-1 method on remaining balance

AII uses a simplified factor: Year-1 CCA = 1.5 × rate × remaining cost.

Apply DIEP (immediate expensing)?

If DIEP is “Yes”, it applies first (up to the limit), then the selected Year-1 method applies to the remainder.

DIEP annual limit

Cap at income

Equipment Purchases (up to 3 rows):

Notes: Results are rounded to whole dollars for readability. AII and DIEP are simplified and may not match all real-world eligibility rules.