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Employee Work-Space-in-Home Expenses
Income Tax Act s. 8(13)
Employees may deduct work-space-in-home expenses if their contract of employment requires them to pay the expenses, and the expenses are not reimbursable by the employer.
Canada Revenue Agency (CRA) form T2200, Declaration of Conditions of Employment, should be completed by the employee and employer in order to claim these expenses. These expenses are entered as a deduction from income on line 229 of the personal income tax return.
In order for any expenses to be deductible, the work space must be either:
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Allowed expenses include heat, electricity, light bulbs, cleaning materials, maintenance, etc. If the home is rented, a reasonable portion of the rent may be deducted. Mortgage interest and capital cost allowance may not be deducted.
Sales commission employees eligible to deduct work-space-in-home expenses may also deduct a reasonable portion of property taxes and home insurance.
CRA form T777, Statement of Employment Expenses, is used to calculate the amount of the work-space-in-home expenses allowed.
The work-space-in-home expenses can only be used to reduce employment income. They cannot be used to create or increase a loss from employment income. Any expenses in excess of the employment income can be carried forward to be used in the next tax year.
The work-space-in-home expenses will include any GST/HST or provincial sales taxes incurred. You may be eligible for a refund of the GST/HST included in the costs. See Employee and Partner GST/HST rebate on the GST/HST page.
Line 229 employment expenses can be entered in the "other deductions" line of the Canadian Tax and RRSP Savings Calculator.
CRA Resources:
- Line 229 Other Employment Expenses- IT-352 Employee's Expenses, including work-space-in-home expenses (Archived)
Revised: April 17, 2018