Can I deduct home-office expenses as an employee in Ontario?

Employees who work from home may be able to deduct home-office expenses on their T1 return, but the rules are more restrictive than for self-employed individuals. The deduction requires your employer to certify, on Form T2200 (Declaration of Conditions of Employment), that you were required to work from home as a condition of your employment and were not reimbursed for the expenses you are claiming.

Eligible expenses for employees are limited compared to the self-employed. Generally, employees can deduct a portion of costs like rent, electricity, heat, and internet, but not mortgage interest or capital cost allowance on the home itself. Commission employees have a somewhat broader list of deductible expenses.

The home-office deduction is calculated based on the portion of your home used exclusively and regularly for work. A common method is the ratio of your workspace square footage to your home's total square footage. During the COVID-19 pandemic, the CRA introduced a simplified flat-rate method for certain employees, but this temporary measure applied to specific tax years. For recent and current years, confirm whether any simplified method still applies by checking the CRA's guidance. A tax professional can help ensure your claim is properly documented and defensible.