Employees can deduct certain expenses on line 22900 of the T1, but only with a signed T2200 from their employer. Eligible expenses include home office, vehicle use, supplies, salary to an assistant, and professional/union dues. Claims are made on Form T777. Union and professional dues have a simpler path via line 21200 — no T2200 needed.
Why Employment Expenses Are Different From Self-Employment Deductions
Self-employed Canadians can generally deduct any reasonable business expense. Employees face a much narrower set of allowable deductions because the Income Tax Act presumes that an employer compensates employees for costs of earning income. Deductions are only permitted when the employment contract specifically requires the employee to pay certain expenses without reimbursement.
This is why the T2200 (Declaration of Conditions of Employment) is so critical. It acts as formal proof — signed by your employer — that you were required to incur the expenses you are claiming.
The T2200: Your Gateway to Employment Expense Deductions
The T2200 must be completed and signed by your employer before you can claim most employment expenses. Key questions the form covers:
- Were you required to work from home or away from the employer’s place of business?
- Were you required to pay your own expenses while working?
- Did you receive a non-taxable allowance for motor vehicle expenses? If so, how much?
- Was the employee required to pay for an assistant or substitute?
- Was the employee a commission-based salesperson?
You do not file the T2200 with your tax return, but you must retain it if the CRA audits your claim. Employers are obligated to provide a completed T2200 when an employee meets the conditions — though they are not required to do so if the conditions are not met.
Line 22900: What Goes There
Line 22900 on your T1 is where you enter the total employment expenses calculated on Form T777. The following categories of expenses flow through T777 to line 22900:
1. Home Office Expenses
If your T2200 confirms you worked from home, you can deduct a pro-rated share of your home’s operating costs. For regular employees this includes rent, utilities, internet, and maintenance — but not mortgage interest or property taxes. See our dedicated work from home deduction guide for full details.
2. Supplies
If your T2200 states you must supply your own materials and supplies used directly in your work, those costs are deductible. Examples: a nurse who buys stethoscope batteries, a teacher who purchases classroom materials not reimbursed by the school board. Office supplies bought for a home office also qualify here. General stationery or supplies your employer would normally provide do not qualify.
3. Salary Paid to an Assistant or Substitute
If your employment contract requires you to hire and pay for an assistant or substitute (and your employer did not reimburse you), you can deduct those salary costs. You must have a signed T2200 confirming this requirement, and you should keep records of payments made (name, SIN, and amounts).
4. Vehicle Expenses
Vehicle costs are among the most significant employment expense deductions available. If your T2200 confirms you were required to use your own vehicle to earn employment income (not just to commute to a fixed location), you can deduct the business-use portion of:
- Fuel and oil
- Insurance
- Licence and registration
- Maintenance and repairs
- Leasing costs (subject to the prescribed monthly limit)
- Capital Cost Allowance (CCA) on the vehicle (subject to the Class 10 or 10.1 cost ceiling)
- Interest on a vehicle loan (subject to the prescribed monthly limit — $350/month for 2025)
- Parking at client sites (not at your regular workplace)
The CRA requires you to maintain a logbook recording every business trip: date, destination, purpose, and kilometres driven. Without a log, the CRA will disallow your vehicle claim. Many free smartphone apps can track this automatically.
The business-use percentage of your vehicle is calculated as business kilometres ÷ total kilometres driven in the year. For example, if you drove 15,000 km for work and 25,000 km total, your business-use percentage is 60%.
| Total Km Driven | Business Km | Business % | Total Vehicle Cost | Deductible Amount |
|---|---|---|---|---|
| 20,000 | 12,000 | 60% | $10,000 | $6,000 |
| 30,000 | 15,000 | 50% | $14,000 | $7,000 |
5. Commission Employees: Additional Deductions
Salespeople and other employees who earn commissions have access to two additional categories of deductions:
- Advertising and promotion expenses — costs to generate sales, such as client entertainment (meals at 50%), business cards, and promotional materials
- Meals and entertainment — 50% of the cost of meals and entertainment when incurred to earn commission income (not available to regular employees)
- A proportion of mortgage interest, property taxes, and home insurance — if working from home (subject to the commission income limit; cannot exceed commission income)
6. Tradesperson’s Tools
Employed tradespersons (carpenters, electricians, plumbers, mechanics, etc.) can deduct the cost of eligible tools purchased for work, to the extent the cost exceeds the greater of:
- $1,369 (the 2025 threshold), or
- The tradesperson’s employment income from the trade
The maximum annual deduction is $500. Apprentice mechanics have a separate, more generous deduction available.
7. Forestry Workers’ Equipment
Employed forestry workers can deduct the cost of a chainsaw and certain other equipment used in earning employment income. The rules are similar in structure to the tradesperson’s tool deduction.
Union and Professional Dues: Line 21200
Union dues and professional membership fees are deductible, but they go on line 21200 — not line 22900 — and you do not need a T2200. The amounts are usually shown on your T4 slip in box 44.
Eligible amounts include:
- Annual union dues paid to maintain membership in a labour union
- Professional fees paid to a professional association required to maintain your licence or registration (e.g., CPA dues, Law Society fees, APEGA fees, CNO fees)
- Parity or advisory committee dues required by provincial law
Not eligible: initiation fees, special assessments, or dues paid for pension purposes.
The GST/HST Rebate for Employment Expenses
Here is a deduction many Canadians miss: if you deduct employment expenses on your T1 and your employer is a GST/HST registrant (almost all employers are), you may be able to recover a portion of the GST or HST embedded in those expenses using Form GST370 — Employee and Partner GST/HST Rebate Application.
For example, if you spent $3,000 on vehicle operating costs in Ontario (13% HST), approximately $345 of HST is embedded in those costs. If you deduct the $3,000 as employment expenses, you can also claim approximately $345 × business-use percentage as a rebate. This rebate is included in your income the following year, but the net benefit is still significant.
Form GST370 is submitted with your T1 return and can add hundreds of dollars to your refund. Many tax filers — and even some tax preparers — overlook this rebate entirely. Make sure your tax software includes it if you are claiming employment expenses.
What Is NOT Deductible as an Employment Expense
The list of non-deductible employment costs is just as important to know:
- Clothing and uniforms — even if required for work, unless it is protective safety equipment not suitable for everyday wear
- Grooming and personal care — haircuts, dry cleaning of regular work clothes
- Commuting costs — driving from home to your regular workplace is personal travel
- Meals eaten at work — unless you are a transport employee or commission-based
- Continuing education — tuition and professional development costs generally do not qualify (though some professional dues do)
- Telephone and cell phone — not deductible on T777 for most employees unless the T2200 specifically requires it
- Capital expenses — furniture, computers, and equipment (exceptions for tradesperson’s tools)
Want to see how these deductions affect your bottom line?
Use the Tax Friend calculator to model your 2025 employment expense deductions against your federal and provincial tax rates.
Frequently Asked Questions
Do I need a T2200 to claim union dues?
No. Union and professional dues shown on your T4 slip (box 44) are claimed directly on line 21200 of your T1 without a T2200. A T2200 is required for other employment expenses like vehicle costs, home office, or supplies claimed on line 22900.
Can I claim the cost of my work uniform or clothing?
Generally no. The CRA does not allow deductions for regular clothing, even if it is only worn at work. The exception is protective clothing required for safety — such as steel-toed boots, hard hats, or flame-resistant gear — which can be deducted when required by the employer and not reimbursed.
What is the GST/HST rebate for employment expenses?
If you deduct employment expenses and your employer is a GST/HST registrant, you may be eligible to recover a portion of the GST/HST embedded in those expenses using Form GST370. This is a separate refundable credit filed with your T1 return and can add meaningfully to your refund.
Can I deduct the cost of my smartphone if I use it for work?
Generally not, unless your T2200 explicitly states you were required to supply and pay for a phone as a condition of employment, and you were not reimbursed. Even then, only the business-use portion would be deductible. Most employees do not qualify for this deduction.
What happens if my employer refuses to sign the T2200?
Without a completed T2200, you cannot claim most employment expenses. If you believe you are entitled to a T2200, discuss this with your HR department. Employers are not legally obligated to sign if the conditions of employment do not genuinely require you to pay those expenses.