Quick Answer
Yes, all Etsy fees are fully tax deductible in Canada as ordinary business expenses. This includes listing fees, transaction fees (6.5%), Etsy Payments processing fees, and Etsy Ads spend. Deduct them against your Etsy income on Form T2125.
Deductible Etsy Fees for Canadian Sellers
| Fee Type | Rate | Deductible? |
|---|---|---|
| Listing fee | $0.20 USD per listing (4 months) | Yes |
| Transaction fee | 6.5% of item + shipping price | Yes |
| Etsy Payments processing | 3% + $0.25 CAD per transaction | Yes |
| Etsy Ads (on-site) | Variable CPC | Yes |
| Offsite Ads | 12–15% of attributable sale | Yes |
| Pattern (Etsy website) | $15 USD/month | Yes |
Other Deductible Expenses for Etsy Sellers
- Materials and supplies to make your products
- Shipping supplies (boxes, poly mailers, tissue paper, tape)
- Postage and courier costs
- Photography equipment and props
- Home studio proportional costs (rent, utilities, internet)
- Accounting and bookkeeping fees
Records Required
Download your annual Finance Report from Etsy as a CSV — this contains all fees broken down by type. Keep this with your tax records for 6 years. Convert USD fees to CAD at the Bank of Canada rate on the date of each charge.
Claim Every Etsy Deduction with MaxRefund
MaxRefund ensures Canadian Etsy sellers claim every legitimate fee and expense deduction. Our bookkeeping service categorizes everything throughout the year.
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