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Can You Deduct Work Related Expenses in Canada?

Can You Deduct Work Related Expenses in Canada?

Rasul Hojati

CPA

Most employees cannot deduct everyday work costs. CRA only allows employment expense deductions when your employment conditions and the specific expense meet CRA rules, and you have the right paperwork (usually Form T2200).

This guide covers:

  • Who qualifies (salaried employees vs commission employees)
  • What expenses are commonly deductible and what is not
  • Required documentation (T2200 and T777)
  • Recordkeeping that holds up in a CRA review
  • Quick links to deeper guides (home office, vehicle, legal/accounting fees)

Eligibility: the CRA checklist

To claim employment expenses (Line 22900 – Other employment expenses), you generally must meet all of the following:

  • Your employment contract required you to pay the expense to do your job.
  • You were not reimbursed by your employer, and you did not receive a non-taxable allowance for the expense.
  • You kept receipts and supporting records for the expenses you are claiming.
  • You have a completed Form T2200 from your employer (and keep it with your records).

Two common non-deductible items CRA specifically flags: commuting (travel to and from work) and most tools and clothing.

Employees vs commission (salesperson) employees: what is different

Salaried employees can claim only certain categories of expenses, and only when their employment conditions support the claim. Commission employees (generally employees who sell goods or negotiate contracts and have an amount in box 42 of the T4) can often claim additional categories, but must meet extra conditions and may be subject to limits.

Tip: Tip for sales roles: If you can choose between 100% salary and salary + commission, the commission structure may allow more types of employment expenses to be deductible — but only if you’re required to pay those expenses and you keep proper documentation (including a T2200). Don’t choose commission for “tax savings” alone — compare your after-tax pay and the real out-of-pocket costs.

CRA employment expense categories (salaried vs commission)

This table compares the major CRA “category titles” that show up in CRA guidance. Eligibility still depends on your facts and your T2200.

Required forms and documentation

Form T2200 (employer form)

  • Your employer completes Form T2200 to certify your conditions of employment for employment expense deductions.
  • If you have more than one employer, each employer should complete a separate T2200.
  • You generally do not file T2200 with your return, but you must keep it in case CRA asks.
  • CRA accepts electronic signatures on the T2200.

Form T777 (employee form you file)

  • You use Form T777 to calculate and report your employment expense deduction.
  • You include the T777 with your tax return when claiming employment expenses.

Recordkeeping (do this if you want your claim to survive a CRA review)

  • Keep receipts/invoices for each claimed expense (vendor, date, description, taxes paid).
  • Keep proof of payment (card statements, bank statements).
  • Keep your completed T2200(s).
  • For vehicle claims: keep a mileage logbook and odometer readings.

Office supplies: what counts (and what does not)

CRA’s rule of thumb: office supplies must be items that are used up while directly performing your job, and you can claim only the portion used for work.

Eligible office supplies (salaried vs commission) – CRA examples

The CRA lists common home office supply items and whether each can be claimed. Below is a practical summary of the items most people actually buy.

Common non-eligible examples (CRA): briefcases, desks, chairs, printers, monitors, software, and equipment purchases are generally not claimable as employment office supplies.

Home office expenses: what is deductible

If you meet the CRA eligibility rules for claiming a work space in your home, you can claim only the employment-use portion of certain expenses (detailed method). Commission employees can claim a few expenses that salaried employees cannot.

Home office deductible expenses (salaried vs commission)

Read next (deeper guides)

To keep this post focused, we cover the high-detail calculations in separate posts.

  • Home office expenses – eligibility and how to calculate the claim (Detailed method)
  • Motor vehicle expenses for employees – logbook rules, allowances vs reimbursements, and CRA-proof support
  • Accounting and legal fees – when they are deductible, and common CRA denials [INSERT LINK]

Commission employees: extra conditions and limits

If you sell goods or negotiate contracts and are paid partly or wholly by commissions, CRA requires additional conditions (for example, you are normally required to work away from your employer’s place of business, and you keep a completed T2200 with your records).

CRA also notes a common limitation: except for interest and CCA on your vehicle, your commission expense deduction is generally limited to the commissions you earned for the year. CRA describes an alternate method in some cases where claiming under salaried-employee rules may be advantageous.

Common mistakes that trigger CRA reviews

  • Claiming employment expenses without a T2200.
  • Claiming commuting costs (not deductible).
  • Treating equipment purchases (desk, chair, computer purchase) as supplies.
  • Home office claims without a clear, reasonable allocation method and support.
  • Vehicle claims without a logbook (if applicable).

FAQ

Q: Do I submit the T2200 with my return?

A: Usually no. Keep it with your records in case CRA requests it.

Q: What form do I file to claim employment expenses?

A: You use Form T777 to calculate and report employment expenses (line 22900).

Q: Can I claim mortgage interest for my home office?

A: No. CRA does not allow mortgage interest or principal mortgage payments as home office expenses for employees.

Q: Can I claim my commute?

A: No. CRA specifically says travel to and from work is not deductible as an employment expense.

Need help?

If you want to claim employment expenses without creating CRA problems, we can review your employment conditions, T2200 wording, and your supporting documentation and help you report the claim correctly on T777.

CRA references