Example - Commission

If your total commission expenses (except interest and capital cost allowance (CCA) on your vehicle) are more than the commissions or similar amounts you received, there is another method you can use to claim expenses. Using this method might be to your advantage because it allows you to claim your expenses as a salaried employee instead of as a commission employee. If you deduct expenses this way, your claim is not limited to the commissions you received in the year. If you choose this method, you would claim only travelling expenses (food and lodging), motor vehicle expenses (including interest and CCA on your vehicle), and certain other expenses if applicable, such as the cost of supplies or office rent. However, to do so, you have to meet the conditions for claiming Travelling expenses and Motor vehicle expenses.

Example

Andrew works for a company that sells video equipment and meets the employment conditions for commission employees. During 2019, he calculated his total employment income and expenses as follows:

Salary received + commissions received = total employment income
($25,000 + $5,000 = $30,000)

Advertising and promotion + travelling expenses + capital cost allowance + interest on car loan = total expenses
($1,000 + $6,000 + $1,500 + $500 = $9,000)

Andrew's total expenses of $9,000 are more than his commissions of $5,000. Therefore, his claim for expenses is limited to $5,000 plus the CCA of $1,500 and interest of $500, for a total claim of $7,000. However, he could choose to claim expenses as a salaried employee, in which case he could claim the travelling expenses of $6,000, but not the advertising and promotion expenses. Using this method, Andrew also claims the CCA of $1,500 and interest of $500, for a total claim of $8,000.

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