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Remote work accounting in Canada splits into two jobs. If you’re an employee, you can claim home office costs only by the detailed method, which needs a signed Form T2200 from your employer. If you run payroll, the province where an employee reports for work, not where they log in, usually sets which deductions you withhold.
Can employees still claim home office costs?
Yes, but the easy route is gone. The flat rate of $2 a day only applied to 2020, 2021 and 2022. For 2023 and later, the CRA lists the detailed method as the one that’s open, and says so on its page for home office expenses for employees.
That method has conditions, and you need all of them. Your employer requires you to work from home, in writing or verbally. You pay the work-space costs yourself, so anything the employer reimburses can’t be claimed. You worked from home more than 50% of the time for at least four consecutive weeks in the year, or you use the space only for work and meet clients there regularly. Your employer completes and signs the T2200.
The CRA’s own example is blunt: three days a week at home under your contract clears the 50% mark, and one day a week doesn’t.
What does a home office claim save?
Less than most people hope. Here’s a case. You earn $85,000 in Ontario and have $1,500 of eligible costs. In the income tax calculator, entering $1,500 as a deduction cuts total income tax from $15,551.05 to $15,106.30. That’s about $445, or 29.7 cents per dollar claimed.
The marginal tax rate calculator shows the same idea from the other side: every extra dollar of deduction is worth your rate on the next dollar earned. And since the claim doesn’t change your pay, your take-home pay stays as it was. The refund shows up when you file.
So a $1,500 claim is a few hundred bucks back, not a windfall. Worth the paperwork, yes. Worth stretching the rules, no.
Which costs count, and which don’t?
| Item | CRA position |
|---|---|
| Utilities and rent | Can be apportioned by work-space area |
| Office supplies and certain phone costs | Claimable when used in your work |
| Mortgage interest | Not deductible |
| Capital cost allowance | Not deductible |
| Amounts your employer repays | Not claimable |
File Form T777 with your return. Keep the T2200 and every receipt for six years, but don’t send them in unless the CRA asks.
A common slip is claiming the whole electricity bill. Only the share that matches your work space counts, and only for the time it’s used for work. If the office is a tenth of your floor area, a tenth is the starting point for the shared costs.
Where does the employer withhold tax?
This is the part employers get wrong. The CRA says the province of employment is where the employee reports for work, and there’s no minimum amount of time. A home office generally isn’t an establishment of the employer. Where someone never reports to a workplace, the CRA points to the location of the establishment that pays the salary. A full-time remote arrangement can make the employee attached to an establishment, under the CRA’s policy effective January 1, 2024.
One line in the same guidance matters. You can’t attach an employee to a place just to avoid source deductions or payroll contributions.
So a person who lives in Alberta but reports to your Ontario office is an Ontario case. To see the effect on a pay run, put the province in the payroll deductions calculator and compare.
What should you ask your employer before you file?
Ask early, not in April. Tell your employer you’ll need a T2200, and ask whether any home costs are being repaid, since that cuts what you can claim. Keep a simple calendar of home days if your arrangement is a mix, because “more than half the time for four weeks” is something you may have to show. Employers who say no aren’t doing anything wrong by default. The form is theirs to sign only if the conditions are met.
How has remote work changed the books themselves?
Mostly through where the records live. The CRA expects records at your Canadian residence or place of business unless it gives permission, and it expects them to be available on request. With staff spread across provinces, scans and shared files are the practical answer, and the six-year rule applies to them as it does to paper.
We couldn’t find an official source for claims about productivity gains or office savings, so we don’t make any. We also didn’t look at provincial rules beyond the payroll point above.
Where the numbers come from
Eligibility, the expense rules and record keeping come from the CRA‘s home office pages for employees. The province of employment rules come from the CRA’s payroll guidance. The tax example is from this site’s 2026 Ontario tax engine.
Frequently asked questions
Can I still claim the $2 a day flat rate?
No. The CRA page shows the temporary flat rate only for 2020, 2021 and 2022. For 2023 and later you use the detailed method.
Do I send the T2200 with my return?
No. You keep it with your receipts for six years. You file Form T777 with the return.
Can I claim mortgage interest on my home office?
No. The CRA says mortgage interest and capital cost allowance can't be deducted.
Which province's tax does an employer withhold for a remote employee?
The province of employment, which is where the employee reports for work or is attached to an establishment. A home office generally isn't an establishment of the employer.
How much does a $1,500 home office claim save in Ontario?
For $85,000 of income, about $445 in our calculator. The exact saving depends on your income and province.
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