Employment Expense Deductions Guide

The T2200 Requirement

What Is Form T2200?

The T2200 (Declaration of Conditions of Employment) is completed by your employer to certify:

• You're required to pay expenses as a condition of employment
• You're not reimbursed for these expenses
• Specific conditions of your job

When You Need It

• To claim employment expenses on Line 22900
• Must be signed by your employer
• Keep with your records (don't submit with return)
• CRA may request it for verification

Common Employment Expense Deductions

Home Office Expenses

If you work from home regularly:

• Detailed method: Calculate actual costs
• Simplified method: $2/day (max $500)
• Requires T2200 for detailed method
• Space must be used regularly for work

What You Can Claim (Home Office)

• Portion of rent or maintenance costs
• Electricity, heat, water
• Home internet
• Minor repairs to workspace
• Office supplies

What You Can't Claim

• Mortgage payments (principal)
• Furniture (unless specific conditions)
• Internet if employer reimburses
• Property taxes (usually)

Vehicle Expenses

If you use your vehicle for work (not commuting):

• Keep detailed mileage log
• Track all vehicle costs
• Deduct employment-use percentage
• Need T2200 confirmation

Deductible Vehicle Costs

• Fuel
• Insurance
• Maintenance and repairs
• License and registration
• Lease payments or CCA on purchase
• Interest on car loan
• Parking (for work, not commuting)

Supplies and Materials

• Office supplies you purchase for work
• Cell phone if required for work
• Computer supplies
• Must be consumed in employment

Professional Fees and Memberships

• Professional dues required for employment
• Union dues (often deducted at source)
• Liability insurance premiums

Special Employee Categories

Commission Salespeople

Additional deductions if you earn commission income:

• Advertising and promotion
• Entertainment (50% limit)
• Meals while traveling (50%)
• Home office even if not exclusive workspace
• Computer and equipment lease

Transport Employees

• Meals when away from home
• Lodging when required
• Simplified method: $23/meal
• Must be away 12+ hours

Tradespersons

• Cost of tools over $1,348 (2024)
• Apprentice mechanic tools deduction
• Need employer certification

Artists

• Can deduct related expenses
• Limited to employment income from art
• Different rules than self-employed artists

How to Claim

Form T777

Complete Form T777 (Statement of Employment Expenses):

• List all eligible expenses
• Calculate deductible amount
• Transfer total to Line 22900

Form T777S (Simplified)

For home office expenses using simplified method:

• $2 per day worked from home
• Maximum $500 per year
• No receipts or T2200 required
• Can't claim other home office expenses

Calculating Home Office Deduction

Detailed Method

1. Calculate total eligible expenses
2. Determine workspace percentage (area/total home)
3. Calculate work-use hours percentage
4. Apply both percentages to expenses

Example

• Home office: 100 sq ft / 1,000 sq ft = 10%
• Work hours: 40 hrs/168 hrs = 24% (if shared space)
• Annual rent: $24,000
• Annual utilities: $3,600
• Annual internet: $1,200
• Total eligible: $28,800
• Dedicated space: $28,800 × 10% = $2,880
• Shared space: $28,800 × 10% × 24% = $691

Record Keeping

Keep for 6 years:

• Signed T2200 form
• All receipts for claimed expenses
• Vehicle mileage log
• Home office measurements and calculations
• Records showing employment requirement

Limitations and Rules

Can't Create a Loss

• Employment expenses can't exceed employment income
• Can't use expenses to reduce other income
• Excess not carried forward (except limited cases)

No Double-Dipping

• Can't claim expenses reimbursed by employer
• Allowance received? May reduce claim
• Report allowances as income if claiming expenses

GST/HST Rebate

If you claim employment expenses:

• May be eligible for GST/HST rebate
• Complete Form GST370
• Rebate on GST/HST portion of expenses
• Adds to taxable income next year