Employment Expenses

The general rule regarding deductibility is an expense must be incurred for the purpose of gaining or producing income. Employment expenses are subject to many restrictions with a different set of rules applying to salary and commission income.

Expenses are deductible if you were required to pay for the expense under your contract of employment, your employer did not reimburse you for the expenses and your employer has provided you with a signed Form T2200 Declaration of Conditions of Employment.

Motor vehicle and travel expenses have additional requirements. To be eligible to claim these expenses, the employee must be required to work away from the employer’s place of business or in different places and they must not have received a non-taxable allowance. [see auto expense article for more details].

Meals can only be claimed as part of your travel expenses if you are required to be away from the municipality that you typically work in for a period of at least 12 consecutive hours. The maximum claim is 50% of the lesser of the actual amount paid, or a reasonable amount. Reasonableness needs to be assessed on a case-by-case basis.

Home office expenses can be claimed if you meet one of the following conditions:

• The workspace is where you mainly (more than 50% of the time) do your work.
• You use the workspace only to earn your employment income. It must be used on a regular and continuous basis for meeting clients, customers, or other people in the course of your employment duties.

See our other article re Home office expense for more details.

This article is intended for general information purposes only and does not constitute professional advice.  Income tax law and regulation change frequently and the content on this article may no longer reflect the current state of the law. If you have any specific questions, you should consult a professional services advisor or email us for further advice.