You can deduct the salary you paid, or that was paid for you and included in your income, to your substitute or assistant (extra help) if you meet all of the following conditions:
- Under your contract of employment, you had to pay for extra help.
- The extra help is your employee. To determine whether an assistant or replacement is an employee, see Guide RC4110, Employee or Self-Employed or go to Canada Pension Plan (CPP) and Employment Insurance (EI) Rulings.
- Your employer has not repaid and will not repay you for these expenses.
- You keep with your records a copy of Form T2200, Declaration of Conditions of Employment, which has been completed and signed by your employer.
You may have to withhold income tax, Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) contributions, employment insurance (EI), and provincial parental insurance plan (PPIP) premiums from the salary you paid. Report on a T4 slip, the salary and amounts you withheld. For more information, see RC4120, Employers' Guide - Filing the T4 slip and Summary.
As the employer, you can also deduct as an expense your share of the CPP or QPP contributions and the EI and PPIP premiums.
Completing your tax return
Include these expenses on the Other expenses line (9270) of Form T777, Statement of Employment Expenses, and attach it to your tax return.
Enter on line 229, the allowable amount of your employment expenses from the total expenses line of Form T777.
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