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Home office deductions let you write off the share of your housing costs that goes to your work space. But the rules are tighter than most people assume. An employee needs a signed Form T2200 from the employer, and can’t claim mortgage payments, a desk or a new chair. Self-employed people get a longer list, including mortgage interest.
Who can claim a home office as an employee?
You need two things. First, your employer has to sign Form T2200, which says you were required to work from home and pay for some of your own costs. Second, you either worked from home more than half the time for at least four weeks in a row, or you use the space only for your job and regularly meet clients or colleagues there in person. The CRA’s eligibility criteria for the detailed method spell out both tests.
If your employer just let you work from home as a favour, the T2200 isn’t coming, and the claim isn’t there. Ask before you buy anything.
The $2-a-day flat rate from the pandemic years is gone. The CRA says it doesn’t apply to 2023 and later tax years, so everyone now uses the detailed method with real receipts.
Does a hybrid schedule count?
Usually not, and this is where people get caught. The test is more than half your working time at home for at least four weeks in a row. Two or three days a week in the office, with the rest at home, won’t clear it. A schedule of one day a week at home is well short.
Picture Naveen in Ottawa, who goes into the office Tuesday to Thursday and works from the kitchen table Monday and Friday. His employer will happily sign a form saying he works from home sometimes, but he spends less than half his week there, so that test isn’t met. Had he worked from home full time for six weeks while the office floor was renovated, those weeks could qualify.
Also, nothing your employer reimbursed can be claimed. If they paid for part of your internet, only the part you paid yourself is yours to deduct.
Which expenses count and which don’t?
Here is how the CRA’s lists break down for the work-space part of your home.
| Expense | Who can claim it |
|---|---|
| Electricity, heat and water | Employees with a T2200 |
| Monthly home internet plan | Employees (not the hook-up fee) |
| Maintenance and minor repairs | Employees and the self-employed |
| Rent | Employees who rent |
| Home insurance and property tax | Commission employees and the self-employed |
| Mortgage interest | The self-employed only |
| Desk, chair, monitor, software | Not on the employee list |
| Window or flooring replacement | Not on the employee list (capital cost) |
Employees can never claim mortgage interest or principal. That surprises a lot of homeowners.
How much is a home office deduction worth?
You claim your work space as a share of the finished area of your home. A 120 square foot room in a 1,200 square foot home is 10%. If the year’s utilities, internet and maintenance come to $12,000, your claim is $1,200.
What does that save? On a $70,000 salary in Ontario, the income tax calculator shows tax of $11,133.91 with no claim and $10,778.11 with a $1,200 deduction. That’s $355.80 back, about 30 cents on each dollar, because the claim lowers income at the top of your bracket. A $2,500 claim would save $741.25.
Worth doing, then, but not a fortune. Think of it as a few hundred bucks, not a new car. Check how the smaller tax bill changes your pay in the take-home pay calculator.
What if you run your own business from home?
You can claim if the space is your main place of business, or if you use it only for the business and meet clients there regularly. You prorate costs by area, and Form T2125 has a worksheet for it.
There’s a catch. The claim can’t be larger than the business income you had before it, so it can’t create or increase a loss. Whatever you couldn’t use can be carried forward to next year while you still meet the conditions. And if you claim capital cost allowance on the home and later sell it, you may face recapture and capital gains. Most people leave that part out.
The self-employed tax calculator works from net business income, so put in the figure after your home office claim.
Mistakes that cost you the claim
Claiming the whole year when you worked from home for part of it. The CRA says to count only the costs for the period you worked there.
Claiming more than you earned. An employee’s claim can’t exceed employment income left after supplies, union dues and pension contributions, and the unused part is carried forward.
Both spouses claiming the same bill. Shared costs can be split, but only once.
And filing without the receipts. Keep bills for utilities, internet, rent and repairs, plus a sketch of the room with its measurements. For other claims that pair with this one, see tax deductions in Ontario, and the tax credits calculator for the credit side.
What this page is based on
The rules come from the Canada Revenue Agency‘s pages on home office expenses for employees and on business-use-of-home expenses. The tax figures in the example use our 2026 federal and Ontario rates, worked out by the calculator. We didn’t find a CRA dollar limit for the claim itself, because the amount follows your own costs. This site isn’t connected to the CRA or any government.
Frequently asked questions
Can I deduct my mortgage payments for a home office?
Not as an employee. The CRA lists mortgage interest and principal as costs employees cannot claim. A self-employed person can claim a share of mortgage interest.
Do I need a T2200 to claim a home office?
Yes, if you're an employee. Your employer has to complete and sign Form T2200 to confirm the conditions of your job.
Is the $2 a day flat rate still available?
No. The CRA says the temporary flat rate method does not apply to the 2023 and later tax years.
How do I work out my work-space share?
Divide the area of your work space by the finished area of your home. A 120 square foot room in a 1,200 square foot home is 10%.
Can a home office claim create a tax loss?
No. Employee claims can't exceed employment income after certain deductions, and a business claim can't exceed business income before it. Unused amounts can be carried forward.
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