Claiming Employment Expenses

The Income Tax Act is very specific about the expenses that may be claimed by employees. They are specified in S. 8, generally deductible on Form T777 Statement of Employment Expenses and require the completion of Form T2200 Declaration of Conditions of Employment by the employer.

So just take a close look at Form T777 to check which employment expenses you can deduct. Of course, all those expenses should be work related.

If you work out of your home, negotiate your employment terms to enable you to deduct household expenses related to your home office.

Commission employees can deduct more expenses. Salespeople can claim advertising and promotion expenses as well as 50 per cent of client entertainment. They can also claim a reasonable percentage of insurance and property taxes as home work space expenses in addition to the utilities, rent and maintenance. However, they cannot claim mortgage interest (self-employed individuals can). Also, if you are paid at least in part by commissions, consider leasing your cell phone, computer, or other equipment. Should you purchase these items, you are not entitled to capital cost allowance (again, self-employed individuals can claim CCA).

Most employees in Canada cannot claim employment expenses. So if you decided to do that make sure you keep good records of all your expenses. The CRA often takes a close look at this category.
Sometimes employers are reluctant to provide a T2200 Form. If you do have some job related expenses (personal car, cell phone, supplies etc.) you can talk to your employer and explain the situation. Just bear in mind that safety equipment (such as safety boots, gloves etc.) do not generally qualify as supplies since they are not used up directly in the performance of the duties of employment. Also, trips to and from work are not deductible – do not try to deduct your car expenses in case you use your car to drive to work.

Unfortunately, employers are not legally obligated to provide a T2200. If they refuse to give you one, there is nothing you can do about it. And you cannot claim employment expenses without this form.