A real estate agent working under a brokerage is still self-employed under Canadian tax law — not an employee of that brokerage. That one fact shapes almost everything else about how the books work.

If you also manage properties for clients rather than just selling, see our guide for property managers.  Guide for Property Managers

You're Self-Employed, Even Though You Work Under a Brokerage

Almost every real estate agent in Canada operates as an independent contractor of their brokerage, not an employee. You won't get a T4. You're responsible for your own income tax instalments, your own bookkeeping, and both the employee and employer portions of CPP (Canada Pension Plan) — there's no employer matching your contribution the way there would be in a salaried job.

This matters because it changes what you're on the hook for. No one is withholding tax from your commission cheques. If you don't set money aside as it comes in, April can be a rough month.

GST/HST: The $30,000 Threshold Catches Agents Off Guard

Once your self-employed taxable revenue crosses $30,000 — in a single calendar quarter or over four consecutive quarters — you're required to register for GST/HST. For a working agent, that threshold arrives faster than people expect, sometimes within the first year.

Whether that $30,000 is measured on your gross commission or your net split after brokerage fees can depend on how your specific agent agreement is structured. This is worth confirming directly with your accountant or your brokerage's office, since agreements vary — but don't assume you're automatically under the threshold just because your take-home pay is lower than the gross commission on a deal.

Brokerage Splits, Desk Fees, and What Actually Counts as Income

Every brokerage relationship splits commission differently — a percentage split, a flat desk fee, a cap system, or some combination. However your arrangement works, the split and any desk fees are a business expense, not a reduction of your income before it hits your books. Record the full amount from your commission statement as revenue, and the brokerage's cut as a separate expense — most statements already break gross, split, and net out for you.

One exception to watch: your T4A (the tax slip your brokerage issues for commission income) can report either the gross commission or the amount already net of the split, depending on your brokerage. If yours shows the net figure, don't also deduct the broker's cut as an expense — that double-counts it against what's already reported to CRA. Netting the two together in your day-to-day books is still one of the most common ways agents lose track of what they actually earned, so keep them separate, and flag which basis your T4A uses when you hand off to your accountant.

Vehicle Expenses: The Logbook Is Non-Negotiable

Showings, listing appointments, client meetings — a real estate agent's vehicle is a genuine cost of doing business, and it's also one of the CRA's most closely reviewed deductions. To claim it, you need a logbook recording four things for every business trip: the date, the destination, the business purpose, and the kilometres driven. On top of that, record your odometer reading at the start and end of the year (and any time you change vehicles) — that's what turns your trip-by-trip kilometres into a business-use percentage for the whole year. A vague estimate at year-end doesn't hold up if the CRA asks.

What You Can Deduct

Beyond your vehicle, the common deductible expenses for a working agent include:

Brokerage fees, desk fees, and franchise fees
MLS and real estate board dues
Errors & omissions (E&O) insurance
Marketing costs — staging, professional photography, signage, online ads
Licensing renewals and continuing education
A reasonable portion of home office costs, if you use part of your home regularly for administrative work.

FAQ

Do I need to incorporate as a real estate agent? Some provinces allow licensed agents to incorporate a Personal Real Estate Corporation (PREC). Whether it makes sense depends on your income level and long-term plans — it's a separate decision from your day-to-day bookkeeping, and worth a conversation with your accountant once your income reaches a meaningful level.

Take the quiz to see where that decision might land for you. Take the quiz: Should I Incorporate?

Can I deduct my real estate license renewal? Yes — licensing and continuing education costs required to keep working in the profession are deductible business expenses.

What if my brokerage already deducts fees before paying me? The timing doesn't change the bookkeeping — record the full commission as revenue and the brokerage's cut as a separate expense, the same way your commission statement usually breaks it out. The one thing to confirm is whether your T4A reports that same gross figure or the amount already net of the split — if it's net, your accountant won't want the brokerage fee claimed twice.

Commission income, brokerage splits, vehicle logs — Margot walks through all of it, built specifically for how Canadian real estate agents get paid. Ask Margot a question right now.