EMPLOYMENT EXPENSES

Employees can deduct only those employment expenses specifically allowed by the Income Tax Act, and only if the employment contract requires them to pay the expenses without reimbursement. The deduction is claimed on line 22900 using Form T777, and the employer must sign Form T2200 (or T2200S) to confirm the conditions of employment.

CONDITIONS

The employer requires the employee to pay the expense under the contract of employment.
The employee did not receive a non-taxable allowance or reimbursement for it.
Receipts are kept, and the signed T2200 is retained (not filed) in case of review.

COMMONLY DEDUCTIBLE EXPENSES FOR SALARIED EMPLOYEES

Motor vehicle expenses for work travel away from the regular workplace, in proportion to employment kilometres (commuting is personal). Includes fuel, insurance, maintenance, interest on a car loan (capped per month), lease costs (capped) and capital cost allowance.
Travel expenses, including meals when away from the metropolitan area for at least 12 hours (50 percent of meal costs).
Supplies consumed directly in the work, such as stationery and toner.
Home office expenses, if the workspace is where the employee mainly (more than 50 percent) works for at least four consecutive weeks, or is used exclusively and regularly for meeting clients. Eligible costs are a proportion of rent, electricity, heat, water, and maintenance; owners cannot deduct mortgage interest, property tax or insurance unless commissioned.
Salary paid to an assistant, if required.
Cell phone airtime used for work (not the device or the basic plan cost for salaried employees).

COMMISSIONED EMPLOYEES

Employees paid in whole or part by commissions and required to sell away from the employer's place of business can also deduct advertising, promotion, entertainment (50 percent), and a share of home property tax and insurance, but the total cannot exceed commission income (except vehicle and capital cost allowance).

SPECIFIC OCCUPATIONS

Tradespersons' tools: up to $1,000 of the cost of new tools above the Canada employment amount threshold.
Apprentice mechanics: an additional tool deduction.
Transport employees: meal and lodging expenses (80 percent for long-haul truck drivers).
Artists and musicians: instrument costs and artistic expenses.
Forestry workers: power saw costs.

HOME OFFICE FLAT RATE

The temporary flat-rate method used in 2020 to 2022 has ended. Employees working from home must use the detailed method with a T2200 for 2023 and later years.

GST/HST REBATE

Employees of GST/HST registrants who deduct expenses that included GST/HST can claim a partial rebate on Form GST370 (line 45700).