You can deduct certain expenses you paid to earn employment income. You can do this only if your employment contract required you to pay the expenses, and either you did not receive an allowance for them, or the allowance you received is included in your income.

 

You kept a copy of Form T2200, Declaration of Conditions of Employment, completed and signed by your employer

 

Note:  Most employees cannot claim employment expenses. You cannot deduct the cost of travel to and from work, or other expenses, such as most tools and clothing.

 

 

You may be eligible to claim a deduction for employment expenses if you incurred any of the following expenses.  

 

 

 

 

 

 

 

          Accounting and legal fees
 
You can deduct legal fees you paid in the year to collect or establish a right to collect any amount that, if received, you would include as employment income on your return. However, you have to reduce your claim by any amount awarded to you, or any reimbursement you received to cover your legal expenses.

 

          Allowable Motor Vehicle Expenses
 
You can deduct your motor vehicle expenses if you meet all the following conditions:
• You were normally required to work away from your employer's place of business or in different places.
• Under your contract of employment, you had to pay your own motor vehicle expenses.
• You did not receive a non-taxable allowance for motor vehicle expenses. Generally, an allowance is non-taxable when it is based solely on a reasonable per-kilometre rate.
The types of expenses you can deduct include:
• fuel and oil; maintenance and repairs; insurance; licence and registration fees; capital cost allowance; eligible interest you paid on a loan used to buy the motor vehicle; and eligible leasing costs
• Sometimes, your employer will include an unreasonably low allowance as income on your T4 information slip even though you do not want to claim any expenses. When this happens, have your employer complete and sign Form T2200 or get a letter from your employer stating that the allowance was unreasonably low.
• If you use a motor vehicle for both employment and personal use, you can deduct only the percentage of expenses related to earning income. To support the amount you can deduct, keep a record of both the total kilometres you drove and the kilometres you drove to earn employment income. We consider driving back and forth between home and work as personal use.
• If you use more than one motor vehicle to earn employment income, calculate each vehicle's expenses separately.

 

         Office Rent
 
You can deduct office rent if you meet all the following conditions:
• Under your contract of employment, you were required to rent an office and pay the expenses;
• Your employer has not repaid and will not repay you for these expenses; and
You can deduct office rent you paid if you paid it to earn your employment income. Do not confuse office rent with work-space-in-the-home expenses.

 

         Parking
 
You can deduct parking costs related to earning your employment income as long as you meet all of the following conditions:
• You were normally required to work away from your employer's place of business or in different places;
• Under your contract of employment, you had to pay your own motor vehicle expenses;
• You did not receive a non-taxable allowance for motor vehicle expenses. Generally, an allowance is non-taxable when it is based solely on a reasonable per-kilometre rate.
Generally, you cannot deduct the cost of parking at your employer's office, such as monthly or daily parking fees. These are personal costs.

 

         Salary Expenses

 

You can deduct the salary you paid to your substitute or assistant if you meet all the following conditions:
• Under your contract of employment, you had to pay for any extra help;
• Your employer has not and will not repay you for these expenses; and
• You kept a copy of Form T2200, Declaration of Conditions of Employment, completed and signed by your employer.
• Note: You may have to withhold income tax, Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) contributions, Employment Insurance (EI) and Provincial Parental Insurance Plan (PPIP) premiums from the salary you paid. Report, on a T4 slip, the salary and amounts you withheld. For more information, see Employers' Guide - Filing the T4 slip and Summary
• As the employer, you can also deduct as an expense your share of the CPP or QPP contributions and the EI and PPIP premiums.

 

          Supplies

 

You can deduct the cost of supplies if you met all of the following conditions:
• Under your contact of employment, you had to provide and pay for the supplies;
• You used the supplies directly in your work;
• Your employer has not repaid and will not repay you for these expenses; and
• Supplies are only those materials you use directly in your work and for no other purpose.
• Supplies include such items as pens, pencils, paper clips, stationery, stamps, street maps and directories. Supplies do not include items such as briefcases and calculators.
You can deduct expenses you paid for telegrams and long-distance telephone calls, as long as you paid them to earn employment income. However, you cannot deduct the monthly basic rate for a telephone.
You can deduct the percentage of the airtime expenses for a cell phone that reasonably relates to earning your employment income. However, you cannot deduct amounts you paid to connect or license the cell phone or the cost of fees related to Internet service.
Note: If you buy or lease a cell phone, fax machine, computer, or other such equipment, you cannot deduct the cost. Also, you cannot deduct the capital cost allowance or interest you paid on money borrowed to buy this equipment.
• You cannot deduct the cost of special clothing you wear or have to wear for your work. Also, you cannot deduct the cost of any tools that are considered to be equipment. However, if you are a tradesperson (including an apprentice mechanic) you may be able to deduct the cost of eligible tools you bought to earn employment income as a tradesperson.

 

         Travelling Expenses

 

Travelling expenses include food, beverage, and lodging expenses but not motor vehicle expenses. You can deduct travelling expenses as long as you meet all the following conditions:
• You were normally required to work away from your employer's place of business or in different places;
• Under your contract of employment, you had to pay your own travelling expenses;
• You did not receive a non-taxable allowance for travelling expenses. Generally, an allowance is non-taxable if it is a reasonable amount and is for travelling away from the municipality and metropolitan area (if there was one) of your employer's location where you normally worked or to which you normally reported
You can deduct food and beverage expenses if your employer requires you to be away for at least 12 consecutive hours from the municipality and the metropolitan area (if there was one) of your employer's location where you normally reported for work.

 

          Work-space-in-the-home expenses

 

Work-space-in-the-home expenses
You can deduct expenses you paid for the employment use of a work space in your home, as long as you had to pay for them under your contract of employment. These expenses must be used directly in your work and your employer has not reimbursed and will not reimburse you.
Also, you must meet one of the following conditions:
• The work space is where you mainly (more than 50% of the time) do your work; or
• You use the work space only to earn your employment income. You also have to use it on a regular and continuous basis for meeting clients or customers.
• You can deduct the part of your costs that relates to your workspace, such as the cost of electricity, heating, and maintenance. However, you cannot deduct property taxes, home insurance, mortgage interest or capital cost allowance.