Are home office rules different for employees versus self-employed people in Ontario?

Yes, the rules are meaningfully different. Employees claiming home office expenses use Form T777 and must have their employer complete Form T2200 certifying that the employee is required to work from home and certain conditions are met. Employees can claim home office costs only to the extent of employment income earned — they cannot use home office deductions to create an employment loss.

Self-employed individuals claim home office expenses directly on Form T2125 as part of their overall business expense calculation. They do not need an employer certification. The eligibility test is also somewhat different: self-employed persons must show the workspace is their principal place of business or exclusively and regularly used for meeting clients, while the employee test focuses on requirement by the employer and whether the employee ordinarily works from home.

For both groups, the deductible costs are similar — rent or mortgage interest, utilities, maintenance, insurance — allocated to the business-use portion of the home. The key difference for self-employed individuals is the direct integration of home office costs into their business profit calculation without the need for employer approval or a separate form.