Deducting dental expenses when you're self-employed in Canada

Dental expenses are the single biggest out-of-pocket health cost for most self-employed Canadians. Without group benefits, every cleaning, filling, crown, and orthodontic visit comes straight from your after-tax income.

But here's what most self-employed Canadians don't realize: you can deduct 100% of those dental expenses through your business, using a CRA-recognized Private Health Services Plan (PHSP).

The dental reality for self-employed Canadians

Let's look at what dental care actually costs when you're paying out of pocket:

A single year of dental care for one person — two cleanings, an exam, and one filling — runs $750-1,300. For a family of four? Easily $3,000-$5,000+ per year. Add orthodontics for a child and you're looking at $8,000-$13,000 over two to three years.

All of this is paid with money you've already been taxed on. At a 40% marginal rate, you need to earn $5,000 before tax just to cover $3,000 in dental expenses.

What dental expenses qualify under a PHSP?

The short answer: virtually all of them. The CRA's list of eligible dental expenses under section 118.2 of the Income Tax Act is comprehensive:

Routine dental care:

• Professional cleanings (dental hygienist)
• Dental exams and consultations
• X-rays and diagnostic imaging
• Fluoride treatments
• Sealants

Restorative dental work:

• Fillings (amalgam and composite)
• Crowns and bridges
• Inlays and onlays
• Root canal therapy
• Tooth extractions (including wisdom teeth)
• Dentures and partial dentures
• Dental implants

Orthodontics:

• Traditional braces
• Invisalign and clear aligners
• Retainers
• Orthodontic consultations and adjustments
• Palatal expanders

Other dental services:

• Periodontal (gum) treatment
• Night guards and bite splints
• Dental surgery
• Emergency dental care
• Sedation dentistry (when medically necessary)

If a licensed dentist or dental specialist provides the service, it's almost certainly eligible.

The personal tax credit vs. PHSP deduction

You might already know that you can claim medical expenses on your personal tax return (Line 33099). But here's why the PHSP approach is dramatically better:

Personal tax credit (Line 33099):

• Only claim the amount exceeding 3% of your net income
• Applied as a non-refundable credit at the lowest federal rate (15%)
• Example: $3,000 dental expenses, $100,000 income → only $0 eligible (3% threshold = $3,000)
• Tax savings: $0

PHSP business deduction:

• Deduct the full amount as a business expense
• Reduces your income at your marginal rate
• Example: $3,000 dental expenses → $3,000 business deduction
• At 40% marginal rate: $1,200 in additional health spend

The math isn't even close. For most self-employed Canadians with meaningful dental expenses, the PHSP saves 5-10x more than the personal tax credit.

Family dental coverage through your PHSP

One of the biggest advantages of a PHSP is that it covers your entire family:

• Your spouse or common-law partner: All dental expenses are eligible
• Your dependent children: Includes kids under 18 (or under 25 if in full-time education)
• Other dependents: Any dependent you support who qualifies under the Income Tax Act

This is especially powerful for families with children in orthodontics. A $6,000 Invisalign treatment for your teenager? Fully eligible under a PHSP. Through the personal tax credit? You might see $200-300 in savings — if anything.

Orthodontics: the big opportunity

Orthodontics deserves special attention because it's one of the highest-cost dental expenses — and one where the PHSP advantage is most dramatic.

Braces or Invisalign typically cost $5,000-$8,000, paid over 12-24 months. Without a PHSP, this is a pure out-of-pocket expense. With a PHSP:

Sole proprietor example: You can deduct orthodontic expenses up to your annual PHSP limit. If your limit is $4,500 (family), you can spread the claims across two calendar years to maximize the deduction.

Incorporated example: Your corporation can set a PHSP contribution that covers the full orthodontic cost in the year it's incurred. A $7,000 orthodontic expense deducted at a 45% marginal rate creates $3,150 in additional dollars available for health care.

Even partial coverage through a PHSP is significantly better than claiming orthodontics through the personal medical expense tax credit.

How to claim dental expenses through a PHSP

The process is simple:

1. Set up your PHSP. Sign up with Zemma — it takes about 5 minutes. Provide your business structure and family details.

2. Visit your dentist normally. Nothing changes about how you access dental care. See your regular dentist, get the work done, and pay as you normally would.

3. Keep your receipts. After each visit, keep the itemized receipt from your dentist's office. It should show: the date of service, the specific services performed, and the amount you paid. Most dental offices provide this automatically.

4. Submit your claim. Upload the receipt to the Zemma platform. The system verifies CRA eligibility and processes the claim.

5. Receive your reimbursement. The reimbursement flows through your business as a deductible expense. At tax time, it reduces your business income dollar for dollar.

Dental implants: a case study in PHSP value

Dental implants are one of the most expensive dental procedures — and one of the most common situations where the PHSP advantage is massive.

A single dental implant costs $3,000-$5,000. For a self-employed Canadian earning $120,000:

Without a PHSP: You pay $4,000 out of pocket. Through the personal tax credit, after the 3% threshold ($3,600), you claim a credit on only $400 — saving roughly $60.

With a PHSP (incorporated): Your corporation deducts the full $4,000. At a 42% marginal rate, that creates $1,680 in additional dollars available for health care.

That's $1,680 vs. $60. The PHSP saves you 28x more.

Start deducting your dental expenses

If you're self-employed in Canada and paying for dental care out of pocket, setting up a PHSP is one of the simplest ways to reduce your tax bill. Every cleaning, every filling, every orthodontic payment becomes a business deduction.

Zemma makes it easy: 5-minute setup, no broker, no insurance premiums, no medical questions. Just submit your dental receipts and start saving.

Your teeth — and your tax return — will thank you.