Updated Checked by the Tax-Services.ca editorial team How we check
Home office expenses are deductible for employees in Canada, but only if your employer signs Form T2200 and your work space passes one of two tests. The payoff is smaller than most people hope. On a $75,000 Ontario salary, a $1,200 claim saves about $356 in tax.
Who can claim home office expenses?
The CRA gives you two ways in. Either 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 to earn employment income and you regularly meet clients or other people there in person.
Both routes need a completed Form T2200 from your employer, and you keep a copy with your records. The claim itself goes on Form T777. The old $2 a day flat rate is gone for 2023 and later years, so the detailed method is all that’s left.
What can you deduct, and what can’t you?
Commission employees get a longer list than salaried ones.
| Expense | Salaried employee | Commission employee |
|---|---|---|
| Rent | Yes | Yes |
| Electricity, heat, water | Yes | Yes |
| Home internet access fees (reasonable plan) | Yes | Yes |
| Maintenance and minor repairs | Yes | Yes |
| Home insurance | No | Yes |
| Property taxes | No | Yes |
| Mortgage interest and principal | No | No |
| Furniture, windows, flooring, furnace | No | No |
Paper, pens, ink cartridges and postage count as office supplies. A desk, a chair or a computer doesn’t, not for a salaried employee. On the phone, you can claim work-related long-distance calls and a reasonable slice of the basic plan. For internet, it’s the monthly access fee that counts, not a one-time connection charge.
The CRA’s list of expenses you can claim spells out every item, so check it against your own bills before you file.
How is the claim worked out?
You claim a share of your costs, never the whole bill. Start with the area: the size of your work space divided by the finished area of your home. If the room is used only for work, that percentage is your claim rate.
If the space is shared (say a dining table), add a time factor. Divide your weekly hours there by 168, then multiply the two percentages together. Apply the result to your rent or utilities.
Here’s how that plays out. Nadia rents a place in Ottawa, and her rent, utilities and internet add up to $10,000 for the year. Her den is 120 square feet in a 1,000 square foot home, so 12% of the home, and she works only in that room. Her claim is 12% of $10,000, or $1,200. If she worked at a 10% corner of the kitchen for 36 hours a week instead, the time factor is 36 divided by 168, about 21.4%, and her share falls to roughly 2.1% of $10,000, or about $214.
There’s also a ceiling. The deduction can’t be more than your employment income from that job after union dues and pension contributions. It can’t create a loss. The CRA’s page on how the claim is calculated gives the exact steps and the form lines.
A $1,200 claim on $75,000, worked through
Put an Ontario employee on $75,000 into the income tax calculator and you get $12,704.65 of federal and Ontario tax. Add a $1,200 deduction and it drops to $12,348.85. That’s $355.80 back, or 29.65% of the claim, which lines up with the 29.6% that the marginal tax rate calculator shows at this income.
So a $1,200 claim doesn’t return $1,200.
It returns a slice of it, roughly what your top tax rate says. CPP and EI don’t move at all, because an employment expense doesn’t reduce them, and they stay at $5,369.52 in this example.
Want to see the effect on a refund or a paycheque? The tax refund calculator and the take-home pay calculator both take the same inputs.
What if you can’t use the whole claim this year?
If your claim is bigger than the income it can offset, you don’t lose the extra. The CRA’s calculation sheet has a carry-forward line, and unused work-space costs can move to a later year as long as you still report income from the same employer. They still can’t create a loss.
Where people go wrong
The biggest slip is claiming without a T2200. The CRA can deny the whole claim even when the costs were real. Ask your employer early, since many payroll teams issue the forms in one batch.
Second, the mortgage. For an employee, mortgage interest and principal are off the list. And third, the whole utility bill for one room. Only your share counts.
Self-employed? Different rules, different form (T2125), and we haven’t covered them here. If you have a salary and a side business, keep the two claims apart.
Keep rent receipts and utility bills, plus a note of the room size and your hours. The CRA may ask for them after you file, and it’s much less stressful to dig them out of a folder than to hunt for them at tax time. Our calculators show tax effects only. Qualifying is a separate question, and only the T2200 and the two tests settle it.
Sources, and how we checked them
The rules come from the Canada Revenue Agency‘s pages on home office expenses for employees, read in 2026. Tax figures come from this site’s calculators, which use 2026 federal and Ontario rates. This site isn’t linked to the CRA or any government, so check the official pages before you file.
Frequently asked questions
Do I need Form T2200 to claim home office expenses?
Yes. Your employer completes Form T2200 and you keep a copy with your records. You then report the claim on Form T777.
Can I claim my mortgage interest as an employee?
No. The CRA lists mortgage interest and principal payments as expenses an employee cannot claim for a home work space.
Is the $2 per day flat rate still available?
No. The temporary flat rate does not apply to the 2023 and later tax years, so you use the detailed method.
What are the two tests for a home work space?
Either you worked more than 50% of the time from home for at least four consecutive weeks, or you use the space only for work and regularly meet people there.
Can a salaried employee claim a desk or a chair?
No. Salaried employees cannot claim furniture or computer equipment, though consumable supplies such as paper and ink can be claimed.
- Property and tax in Canada: buying, owning and selling
How property tax and transfer tax apply when you buy, own, rent out or sell a home in Canada, with the calculators for each step