Work from home expenses in Canada: the T2200 rule and what you can claim

Can you claim work from home expenses in Canada?

Yes, if you are an employee who was required to work from home, you paid the costs yourself, and your employer signs Form T2200. For the 2023 tax year onward, the CRA allows only the detailed method, which means claiming a measured share of actual household costs (CRA, home office expenses for employees).

A work-space-in-the-home expense is the portion of rent, utilities and similar costs that relates to the part of your home you use for your job. It is a deduction from employment income, so it saves tax at your marginal rate rather than at a fixed credit rate. It sits alongside the other claims in our credits and deductions guide.

Who can claim work from home expenses on a Canadian tax return?

The CRA lists five conditions for the detailed method, and all of them must be met. Missing any one of them means no claim.

1. Your employer required you to work from home. A written or verbal agreement counts, and a formal telework arrangement you signed up for voluntarily is treated as a requirement.
2. Your employment contract required you to pay the expenses, and you were not reimbursed for them.
3. Your work space passes one of two tests: you worked there more than 50% of the time for at least 4 consecutive weeks in the year, or you used it only to earn employment income and regularly met clients or customers in person there.
4. The expenses were used directly in your work.
5. Your employer completed and signed Form T2200.

Self-employed people do not use these rules. They claim business-use-of-home expenses on Form T2125 instead, which allows different costs; see business expenses in Canada.

Do you need a T2200 form to claim home office expenses?

Yes. Form T2200, Declaration of Conditions of Employment, is the employer's written confirmation that your job required you to work from home and pay certain costs. The CRA says the form must be signed by your employer, and without it the claim can be denied.

You do not send the T2200 with your return. Keep it with your receipts for six years, because the CRA can ask to see it. If your employer refuses to sign because you chose to work from home without any arrangement, the claim is not available.

What happened to the T2200S and the flat rate?

The shortened Form T2200S, the simplified Form T777S and the $2-per-day temporary flat rate method were pandemic measures for the 2020, 2021 and 2022 tax years. The CRA's how-to-claim page says returns for 2023 and later must use Form T777 with a Form T2200. If you still have a 2022 return to fix, the older rules apply to that year only. Under those rules, the flat rate was $2 for each day worked from home, up to $400 for 2020 (200 days) and $500 for each of 2021 and 2022 (250 days), for people who worked more than 50% of the time from home for at least 4 consecutive weeks because of COVID-19. It was claimed on Form T777S and did not need a T2200 or T2200S. The detailed method for those years used Form T777S, or Form T777 if you also claimed other employment expenses, together with a T2200S or T2200 from your employer.

Which work from home expenses are eligible?

What you can claim depends on whether you are paid a salary or earn commissions. Commission employees can claim more categories, but neither group can claim the cost of owning the home.

Internet connection fees and modem or router lease costs are not deductible. For a cell phone plan, a salaried employee can claim the reasonable work-use part of the plan if they can show how many minutes or how much data was for work; the basic monthly charge of a land line is not deductible.

How to calculate the work-space share of your home

Start with floor area: divide the size of your work space by the finished area of your home and multiply by 100. If the space is used only for work, that percentage is your work-use share.

If the space is shared, such as a kitchen table, multiply the area percentage by a time percentage: hours worked in the space each week divided by 168, the number of hours in a week. The CRA's own example uses a dining area that is 12% of the home, used 40 hours a week: 40 divided by 168 is 23.8%, and 12% times 23.8% is 2.8%.

Worked example for a renter

Marc, a salaried employee in Winnipeg, has a signed T2200 and a spare bedroom of 150 square feet used only for work, in a 1,200-square-foot apartment. His work-use share is 150 divided by 1,200, or 12.5%.

At a 20.5% federal bracket, a $3,430 deduction lowers federal tax by about $703, plus a provincial saving. Work-space-in-the-home expenses cannot create or increase a loss from employment; any amount you cannot use carries forward to next year's Form T777.

How to claim work from home expenses step by step

1. Ask your employer for a completed and signed Form T2200 for the tax year.
2. Measure your work space and the finished area of your home, and track weekly hours if the space is shared.
3. Total the year's eligible bills: rent, utilities, internet, and for commission earners, insurance and property tax.
4. Complete Form T777, Statement of Employment Expenses, in your tax software. It also holds any vehicle or supply costs.
5. Enter the Form T777 total on line 22900 of your return and file. Keep the T2200, T777 and receipts for six years.

If you missed the claim on a return that is already assessed, you can add it for past years through Change my return, as long as you have the T2200 for each year.

Keeping records the CRA will ask for

If the CRA selects your claim for a review letter, expect to be asked for the signed T2200, a floor plan or measurements, and the bills behind each amount.

• The signed Form T2200 for each year you claim.
• Lease or rent receipts, and utility bills in your name or showing you paid them.
• Internet and phone statements with a note of how you worked out the work share.
• A simple calendar showing which weeks you worked at home, to prove the 4-week test.

People adapting a home for a senior or a person with a disability should look at the separate home accessibility tax credit, which covers renovations rather than running costs.