Employees' allowable employment expenses

Your employee may be able to claim certain employment expenses on their income tax and benefit return if, under the contract of employment, the employee had to pay for the expenses in question. This contract of employment does not have to be in writing but you and your employee have to agree to the terms and understand what is expected.

Examples

  • You allow your employee to use his personal motor vehicle for business and pay him a monthly motor vehicle allowance to pay for the operating expenses and you include the allowance in the employee’s employment income as a taxable benefit; or
  • You have a formal telework arrangement with your employee that allows this employee to work at home. Your employee pays for the expenses of this work space on their own.

You have to fill out and sign Form T2200, Declaration of Conditions of Employment and give it to your employee so they can deduct employment expenses from their income. By signing the form, you are only certifying that the employee met the conditions of employment and had to pay for the expenses under their employment contract.

It is the employee’s responsibility to claim the expenses on their income tax and benefits return and to keep records to support the claim.

For more information on allowable employment expenses, see:

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