Line 22900 – Other employment expenses

Employees earning a salary

If you are an employee earning a salary you may be eligible to claim a deduction for employment expenses if you incurred any of the following expenses:

• Accounting and legal fees

  You can deduct any legal fees you paid in the year to collect or establish a right to collect salary or wages.

  You can also deduct legal fees you paid in the year to collect or establish a right to collect other amounts that must be reported in employment income even if they are not directly paid by your employer. However, you must reduce your claim by any amount awarded to you for those fees or any reimbursement you received for your legal expenses. 

  In some cases, you may also be able to deduct certain accounting fees. For more information, see Archived Interpretation Bulletin IT-99R5-CONSOLID, Legal and Accounting Fees.

  A completed Form T2200, Declaration of Conditions of Employment, is not required when claiming this expense.

  Completing your tax return

  Include these expenses on the Accounting and legal fees line (8862) of Form T777, Statement of Employment Expenses and attach it to your paper return.

  Enter on line 22900, the allowable amount of your employment expenses from the total expenses line of Form T777.

• Allowable motor expenses (including capital cost allowance)

  You can deduct your motor vehicle expenses if you meet all of the following conditions:

  1. You were normally required to work away from your employer's place of business or in different places
  2. Under your contract of employment, you had to pay your own motor vehicle expenses. You are not considered to have paid your own motor vehicle expenses if your employer reimburses you or you refuse a reimbursement or reasonable allowance from your employer
  3. You did not receive a non-taxable allowance for motor vehicle expenses. Generally, an allowance is non-taxable when it is based solely on a reasonable per-kilometre rate
  4. You keep with your records a copy of Form T2200, Declaration of Conditions of Employment, which has been completed by your employer
      

  The types of expenses you can deduct include:

  • fuel (such as gasoline, propane and oil) and electricity
  • maintenance and repairs
  • insurance
  • licence and registration fees
  • capital cost allowance
  • eligible interest you paid on a loan used to buy the motor vehicle
  • eligible leasing costs
     

  If you received a non-taxable motor vehicle allowance, you can deduct your motor vehicle expenses if all of the following conditions are met:

  • You can show that the employment-related motor vehicle expenses are in excess of the allowance
  • You voluntarily include the amount of the allowance in income
  • Conditions 1, 2, and 4 above are met
     

  If you use a motor vehicle for both employment and personal use, you can deduct only the percentage of expenses related to earning income. To support the amount you can deduct, keep a record of both the total kilometres you drove to earn employment income. The CRA considers driving back and forth between home and work as personal use.

  If you use more than one motor vehicle to earn employment income, calculate the expenses for each vehicle separately.

  For more information, read Archived Interpretation Bulletin IT-522R, Vehicle, Travel and Sales Expenses of Employees.

  For more information about allowable motor vehicle expenses, see Motor vehicle expenses.

  Completing your tax return

  Complete section “Calculation of allowable motor vehicle expenses” of Form T777, Statement of Employment Expenses, and attach it to your paper return.

  Enter the eligible amount of your employment expenses from line 17 of Form T777, Statement of Employment Expenses on line 22900 of your return.

• Travelling expenses

  Travelling expenses include food, beverage, lodging and transportation (such as airplane, train or bus) expenses but not motor vehicle expenses. You can deduct travelling expenses as long as you meet all of the following conditions:

  • You were normally required to work away from your employer's place of business or in different places
  • Under your contract of employment, you had to pay your own travelling expenses
  • You did not receive a non-taxable allowance for travelling expenses. Generally, an allowance is non-taxable as long as it is a reasonable amount
  • You keep with your records a copy of Form T2200, Declaration of Conditions of Employment, which has been completed by your employer
     

  Enter your claim for deductible transportation expenses (such as airplane, train or bus) on the “Other expenses” line of Form T777, Statement of Employment Expenses.

  You can deduct food and beverage expenses if your employer requires you to be away for at least 12 consecutive hours from the municipality and the metropolitan area (if there is one) of your employer’s location where you normally report for work. The most you can deduct for food and beverage expenses is 50% of the lesser of:

  • the amount you actually paid
  • an amount that is reasonable in the circumstances

  The 50% limit also applies to the cost of food and beverages you paid for when you travelled on an airplane, train, or bus, as long as the ticket price did not include such amounts.

  If you are a transportation employee, you may also be able to claim expenses for meals and lodging (including showers). For more information, see Transportation employees.

  For more information about travelling expenses, read Archived Interpretation Bulletin IT-522R, Vehicle, Travel and Sales Expenses of Employees, and Archived Interpretation Bulletin IT-518R, Food, Beverages and Entertainment Expenses.

  Completing your tax return

  Include these expenses on the Food, beverages, and entertainment expenses line (8523) of Form T777, Statement of Employment Expenses, and attach it to your paper return.

  Enter on line 22900, the allowable amount of your employment expenses from the total expenses line of Form T777.

• Parking costs

  You can deduct parking costs related to earning your employment income as long as you meet all of the following conditions:

  • You were normally required to work away from your employer's place of business or in different places
  • Under your contract of employment, you had to pay your own motor vehicle expenses. You are not considered to have paid your own motor vehicle expenses if your employer reimburses you or you refuse a reimbursement or reasonable allowance from your employer
  • You did not receive a non‑taxable allowance for motor vehicle expenses. Generally, an allowance is non‑taxable  when it is based solely on a reasonable per‑kilometre rate
  • You keep with your records a copy of Form T2200, Declaration of Conditions of Employment, which has been completed by your employer

  Generally however, you cannot deduct the cost of parking at your employer's office, such as monthly or daily parking fees or the cost of traffic infractions such as speeding tickets. These are all personal costs.

  Completing your tax return

  Do not include parking costs as part of your allowable motor vehicle expenses. Enter them on the Parking line (8910) of Form T777, Statement of Employment Expenses.

  Enter on line 22900, the allowable amount of your employment expenses from the Total expenses line of Form T777.

• Supplies

  You can deduct the cost of supplies you paid for (or that were paid for you and included in your income) if you meet all of the following conditions: 

  • Under your contract of employment, you had to provide and pay for the supplies 
  • You used the supplies directly in your work 
  • 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 by your employer 

  Supplies are only those materials you use directly in your work, and for no other purpose.

  For a list of common home office supplies, see Office supplies.

• Salaries

  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 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, go to Fill out the slips and summaries or T4 slip – Information for employers.

  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 22900, the allowable amount of your employment expenses from the Total expenses line of Form T777.

• Office rent

  You can deduct office rent you paid (or that was paid for you and included in your income) if you paid it to earn your employment income. Also, you must meet all of the following conditions:

  • Under your contract of employment, you had to rent an office and pay the expenses
  • 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 by your employer

  Do not confuse office rent with work-space-in-the-home expenses.

  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 22900, the allowable amount of your employment expenses from the Total expenses line of Form T777.

• Home office expenses

  See Home office expenses for employees for a detailed list of eligible expenses.

• Excess employees profit-sharing (EPSP) amount

  If an excess amount has been contributed to a specified employee's EPSP in 2025, the excess EPSP amount is subject to a special tax.

  A specified employee is a person who deals with an employer in a non-arm's length relationship or who owns, directly or indirectly, at any time in the year, not less than 10% of the issued shares of any class of the capital stock of the employer corporation, or any other corporation that is related to the employer corporation.

  Generally, an excess EPSP amount is the part of an employer's EPSP contribution, allocated by the trustee to a specified employee that is more than 20% of that employee's income from employment received in the year from that employer.

  How to calculate the excess EPSP

  To calculate the excess EPSP amount and the special tax that applies to it, get Form RC359, Tax on Excess Employees Profit Sharing Plan Amounts, or by calling 1-800-959-8281.

If you are an employee who sell goods or negotiate contracts for an employer you can deduct some amounts you paid to earn commission income.

However, except for interest and capital cost allowance (CCA) on your vehicle, the total of the expenses you can deduct cannot be more than the commissions or similar amounts you received in the year. 

If your total commission expenses (except interest and 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 same conditions that a salaried employee must meet for claiming Travelling expenses and Motor vehicle expenses.

Employment conditions

To deduct the expenses you paid to earn commission income, you have to meet all of the following conditions:

1. Under your contract of employment, you had to pay your own expenses
   

   Note
   You are not considered to have paid your own motor vehicle expenses if your employer reimburses you or if you refuse a reimbursement or reasonable allowance from your employer.         

2. You were normally required to work away from your employer’s place of business
3. You were paid in whole or in part by commissions or similar amounts. These payments were based on the volume of sales made or the contracts negotiated
4. You did not receive a non-taxable allowance for travelling expenses. Generally, an allowance is non-taxable as long as it is a reasonable amount. For example, an allowance for the use of a motor vehicle is usually non-taxable when it is based solely on a reasonable per-kilometre rate
5. You keep with your records a copy of Form T2200, Declaration of Conditions of Employment, which has been completed by your employer.

Deductible expenses

Your employment expenses include any GST and provincial sales tax (PST), or HST, you paid on these expenses. You may be able to get a rebate of the GST/HST you paid. For more information, see Employee GST/HST Rebate.

The following describes the types of deductible expenses you may be able to deduct:

• Accounting and legal fees

  You can deduct reasonable accounting fees you paid for help to complete and file your income tax and benefit return. You can deduct legal fees you paid in the year to collect or establish a right to collect salary or wages.

  You can also deduct legal fees you paid in the year to collect or establish a right to collect other amounts that must be reported in employment income even if they are not directly paid by your employer.

  However, you must reduce your claim by any amount awarded to you for those fees or any reimbursement you received for your legal expenses. You do not have to meet the conditions listed in Employment conditions (commission employees) to deduct legal fees.

  Completing your tax return

  Enter this amount on the Accounting and legal fees line (8862) of Form T777, Statement of Employment Expenses.

  Enter on line 22900, the allowable amount of your employment expenses from the Total expenses line of Form T777.

• Advertising and promotion

  You can deduct expenses for advertising and promotion, including amounts you paid for business cards, promotional gifts and advertisements.

  Completing your tax return

  Enter this amount on the Advertising and promotion line (8520) of Form T777, Statement of Employment Expenses.

  Enter on line 22900, the allowable amount of your employment expenses from the Total expenses line of Form T777.

• Allowable motor vehicle expenses

  The types of expenses you can deduct include:

  • fuel (such as gasoline, propane, and oil) and electricity
  • maintenance and repairs
  • insurance
  • licence and registration fees
  • capital cost allowance
  • eligible interest you paid on a loan used to buy the motor vehicle
  • eligible leasing costs

  For more information about allowable motor vehicle expenses, see Motor vehicle expenses.

  If you have received a non-taxable motor vehicle allowance and can show that the employment-related motor vehicle expenses are in excess of the allowance and voluntarily include the amount of the allowance in income, you can deduct your motor vehicle expenses if employment conditions 1, 2, 3, and 5 are met.

  Completing your tax return

  Enter on line 22900, the allowable amount of your employment expenses from the Total expenses line of Form T777, Statement of Employment Expenses.

• Food and beverages

  You can deduct food and beverage expenses as long as your employer requires you to be away for at least 12 consecutive hours from the municipality and the metropolitan area (if there is one) of your employer's location where you normally report for work.

  The most you can deduct for food and beverage expenses is 50% of the lesser of:

  • the amount you actually paid
  • an amount that is reasonable in the circumstances

  The 50% limit also applies to the cost of food, beverages and entertainment you paid for when you travelled on an airplane, train or bus, as long as the ticket price did not include such amounts.

  Completing your tax return

  Enter this amount plus any amount for Entertainment expenses on the Food, beverages, and entertainment expenses line (8523) of Form T777, Statement of Employment Expenses.

  Enter on line 22900, the allowable amount of your employment expenses from the Total expenses line of Form T777.

• Entertainment expenses

  You can deduct part of the entertaining expenses you paid for clients. These expenses include food, beverages, tickets, and entrance fees to entertainment or sporting events. You can also deduct tips, cover charges, room rentals to provide entertainment, such as hospitality suites, and the cost of private boxes at sports facilities.

  The most you can deduct is 50% of the lesser of:

  • the amount you actually paid
  • an amount that is reasonable to pay in the circumstances

  Completing your tax return

  Enter this amount plus any amount for Food and beverages on the Food, beverages, and entertainment expenses line (8523) of Form T777, Statement of Employment Expenses.

  Enter on line 22900, the allowable amount of your employment expenses from the Total expenses line of Form T777.

• Lodging

  You can deduct lodging expenses if your work conditions require you to travel away from your employer's place of business and you pay your own lodging expenses.

  Completing your tax return

  Enter this amount on the Lodging line (9200) of Form T777, Statement of Employment Expenses.

  Enter on line 22900, the allowable amount of your employment expenses from the Total expenses line of Form T777.

• Parking costs

  You can deduct parking costs related to earning your commission income. Generally, you cannot deduct the cost of parking at your employer's office, such as monthly or daily parking fees or the cost of traffic infractions such as speeding tickets. These are personal costs.

  Completing your tax return

  Do not include parking costs as part of your allowable motor vehicle expenses. Enter them on the Parking line (8910) on Form T777, Statement of Employment Expenses.

  Enter on line 22900, the allowable amount of your employment expenses from the Total expenses line of Form T777.

• Supplies

  If your employer requires you to pay for office supplies or certain phone expenses, you may be able to claim those expenses.

  Although you can claim these expenses, they are not related to the physical work space in your home. They are claimed on a different section of Form T777S or Form T777.

  Office supplies

  What can be claimed

  An item that is used up while directly performing your job

  How much to claim

  You can claim only the expense, or portion of the expense, you use for work

  Common home office supplies

  Common home office supplies

  Item	Can it be claimed?
  Blue light eye glasses	No  | Salaried employees No  | Commissioned employees
  Briefcase	No  | Salaried employees No  | Commissioned employees
  Calculator	No  | Salaried employees No  | Commissioned employees
  Capital cost allowance	No  | Salaried employees No  | Commissioned employees
  Chair	No  | Salaried employees No  | Commissioned employees
  Charging or connecting cables	No  | Salaried employees No  | Commissioned employees
  Coffee supplies	No  | Salaried employees No  | Commissioned employees
  Computer, laptop, or tablet - lease	No  | Salaried employees Yes | Commissioned employees
  Computer, laptop, or tablet - purchase	No  | Salaried employees No  | Commissioned employees
  Computer, laptop, or tablet - cases or bag	No  | Salaried employees No  | Commissioned employees
  Computer, laptop, or tablet - protection plans	No  | Salaried employees No  | Commissioned employees
  Computer monitor	No  | Salaried employees No  | Commissioned employees
  Computer mouse	No  | Salaried employees No  | Commissioned employees
  Desk	No  | Salaried employees No  | Commissioned employees
  Electrical room heater or fan	No  | Salaried employees No  | Commissioned employees
  Envelopes	Yes | Salaried employees Yes | Commissioned employees
  Ergonomic examination	No  | Salaried employees No  | Commissioned employees
  Ergonomic foot rest	No  | Salaried employees No  | Commissioned employees
  External hardrive	No  | Salaried employees No  | Commissioned employees
  Fax machine - lease	No  | Salaried employees Yes | Commissioned employees
  Fax machine - purchase	No  | Salaried employees No  | Commissioned employees
  Folders	Yes | Salaried employees Yes | Commissioned employees
  Garbage or recycle bins	No  | Salaried employees No  | Commissioned employees
  Graphing equipment	No  | Salaried employees No  | Commissioned employees
  Headset or headphones	No  | Salaried employees No  | Commissioned employees
  Highlighters	Yes | Salaried employees Yes | Commissioned employees
  House-plants	No  | Salaried employees No  | Commissioned employees
  Ink cartridges	Yes | Salaried employees Yes | Commissioned employees
  Keyboard or wireless keyboard	No  | Salaried employees No  | Commissioned employees
  Lamps	No  | Salaried employees No  | Commissioned employees
  Laptop stand	No  | Salaried employees No  | Commissioned employees
  Microphone	No  | Salaried employees No  | Commissioned employees
  Mouse pad	No  | Salaried employees No  | Commissioned employees
  Note-books	Yes | Salaried employees Yes | Commissioned employees
  Online subscriptions	No  | Salaried employees No  | Commissioned employees
  Paper clips or binder clips	Yes | Salaried employees Yes | Commissioned employees
  Paper shredder	No  | Salaried employees No  | Commissioned employees
  Pens or pencils	Yes | Salaried employees Yes | Commissioned employees
  Power bar or surge protector	No  | Salaried employees No  | Commissioned employees
  Printer	No  | Salaried employees No  | Commissioned employees
  Printer paper	Yes | Salaried employees Yes | Commissioned employees
  Protective mat for office floor	No  | Salaried employees No  | Commissioned employees
  Router - purchase	No  | Salaried employees No  | Commissioned employees
  Safe, lock box, or lock	No  | Salaried employees No  | Commissioned employees
  Scanner	No  | Salaried employees No  | Commissioned employees
  Smart speaker	No  | Salaried employees No  | Commissioned employees
  Software	No  | Salaried employees No  | Commissioned employees
  Speakers	No  | Salaried employees No  | Commissioned employees
  Speciality paper (for example: graph paper, tracing paper)	Yes | Salaried employees Yes | Commissioned employees
  Specialized printer (for example: large scale or high resolution)	No  | Salaried employees No  | Commissioned employees
  Stamps or postage	Yes | Salaried employees Yes | Commissioned employees
  Stationery items	Yes | Salaried employees Yes | Commissioned employees
  Sticky notes	Yes | Salaried employees Yes | Commissioned employees
  Storage containers or cabinets	No  | Salaried employees No  | Commissioned employees
  Television	No  | Salaried employees No  | Commissioned employees
  Toner	Yes | Salaried employees Yes | Commissioned employees
  USB drive	No  | Salaried employees No  | Commissioned employees
  Voice assistant	No  | Salaried employees No  | Commissioned employees
  Webcam	No  | Salaried employees No  | Commissioned employees

  Phone

  Cell phone expenses

  Item	Can it be claimed?
  Basic service plan (minutes/data)	Yes if all conditions are met | Salaried employees Yes if all conditions are met | Commissioned employees Conditions: The cost of the plan is reasonable The cost of the plan has been reasonably apportioned between employment and personal use You are able to show the cellular minutes or data you consumed directly while performing your employment duties (as well as the cost of the minutes or data)
  Cases	No  | Salaried employees No  | Commissioned employees
  Connection or license fees	No  | Salaried employees No  | Commissioned employees
  Lease	No  | Salaried employees Yes | Commissioned employees
  Protection plans	No  | Salaried employees No  | Commissioned employees
  Purchase	No  | Salaried employees No  | Commissioned employees
  Long distance telephone calls made for work	Yes | Salaried employees Yes | Commissioned employees

  Land-line phone expenses

  Item	Can be it claimed?
  Long distance telephone calls made for work	Yes | Salaried employees Yes | Commissioned employees
  Monthly basic home phone (land-line) rate	No  | Salaried employees No  | Commissioned employees

• Licences

  Deduct annual licence fees if you must have a licence to do your work. For example, real estate and insurance salespeople can deduct the cost of their annual licences.

  Completing your tax return

  Enter this amount on the Other expenses line (9270) of Form T777, Statement of Employment Expenses.

  Enter on line 22900, the allowable amount of your employment expenses from the Total expenses line of Form T777.

• Bonding premiums

  You can deduct payments for bonding and liability insurance premiums.

  Completing your tax return

  Enter this amount on the Other expenses line (9270) of Form T777, Statement of Employment Expenses.

  Enter on line 22900, the allowable amount of your employment expenses from the Total expenses line of Form T777.

• Medical underwriting fees

  You can deduct expenses you paid for items such as X-rays and heart diagrams related to underwriting your customers' risks.

  Completing your tax return

  Enter this amount on the Other expenses line (9270) of Form T777, Statement of Employment Expenses.

  Enter on line 22900, the allowable amount of your employment expenses from the Total expenses line of Form T777.

• Computers, cell phones, and other equipment

  Go to Home office expenses for employees for more information.

  If you lease computers, cell phones, fax machines, or other equipment, you can deduct the part of the lease cost that reasonably relates to earning your commission income.

  You can include your reasonable monthly home Internet access fees as part of your work-space-in-the-home expenses.

  You can also deduct the part of airtime expenses for a cell phone that reasonably relates to earning your commission income. However, you cannot deduct amounts you paid to connect or license the cell phone.

  If you buy a computer, cell phone, fax machine, or other such equipment, you cannot deduct the cost. Also, you cannot deduct capital cost allowance or interest you paid on money you borrowed to buy this equipment.

• Salaries for an assistant

  You can deduct the salary you paid (or that was paid for you and included in your income) to your substitute or assistant.

  You may have to withhold income tax, Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) contributions, and 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, go to Fill out the slips and summaries or T4 slip – Information for employers.

  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

  Enter this amount on the Other expenses line (9270) of Form T777, Statement of Employment Expenses.

  Enter on line 22900, the allowable amount of your employment expenses from the Total expenses line of Form T777.

• Office rent

  You can deduct office rent you paid, or that was paid for you and included in your income, to earn your commission income. Do not confuse office rent with work-space-in-the-home expenses.

  Completing your tax return

  Enter this amount on the Other expenses line (9270) of Form T777, Statement of Employment Expenses.

  Enter on line 22900, the allowable amount of your employment expenses from the Total expenses line of Form T777.

• Training costs

  You can deduct the cost of a training course as an employment expense. The course has to maintain, upgrade or update your existing skills or qualifications that relate to your employment.

  You cannot deduct the cost of a training course as an employment expense if the course is for personal reasons, the cost is unreasonable, or you receive a lasting benefit from the course. For example, you receive a lasting benefit when you take a course to get a credit towards a degree, diploma, professional qualification or similar certificate.

  If you cannot deduct the cost of a training course as an employment expense, you can claim it as a tuition amount as long as you meet the conditions described in Guide P105, Students and Income Tax.

  For more information and additional examples, read Archived Interpretation Bulletin IT-357R2, Expenses of training.

  Completing your tax return

  Enter this amount on the Other expenses line (9270) of Form T777, Statement of Employment Expenses.

  Enter on line 22900, the allowable amount of your employment expenses from the Total expenses line of Form T777.

• Travel fare

  You can deduct the full amount you paid for travel fare, such as your airline, bus or train ticket, as long as you paid it only to earn commission income.

  Completing your tax return

  Enter this amount on the Other expenses line (9270) of Form T777, Statement of Employment Expenses.

  Enter on line 22900, the allowable amount of your employment expenses from the Total expenses line of Form T777.

• Home office expenses

  See Home office expenses for employees for a detailed list of eligible expenses.

• Excess employees profit-sharing plan (EPSP) amounts

  If an excess amount has been contributed to a specified employee's EPSP in 2025, the excess EPSP amount is subject to a special tax.

  A specified employee is a person who deals with an employer in a non-arm's length relationship or who owns, directly or indirectly, at any time in the year, not less than 10% of the issued shares of any class of the capital stock of the employer corporation, or any other corporation that is related to the employer corporation.

  Generally, an excess EPSP amount is the part of an employer's EPSP contribution, allocated by the trustee to a specified employee that is more than 20% of that employee’s income from employment received in the year from that employer.

  How to calculate the excess EPSP

  To calculate the excess EPSP amount and the special tax that applies to it, get Form RC359, Tax on Excess Employees Profit Sharing Plan Amounts, or call 1-800-959-8281.

In addition to the expenses listed under Salaried employees, you may also be able to claim the cost of meals and lodging (including showers) if you are an employee of a transport business, a railway employee, or other transport employee. This cost includes any GST and provincial sales tax (PST), or HST, you paid on these expenses. You may be able to get a rebate of the GST/HST you paid. For more information, see Employee GST/HST Rebate.

Expand all - Transportation employees Collapse all - Transportation employees

• Employees of a transport business

  You can claim the cost of meals and lodging (including showers) on Form TL2, Claim for Meals and Lodging Expenses, if you meet all of the following conditions:

  • You work for an airline, railway, bus or trucking company, or for any other employer whose main business is transporting goods, passengers or both
  • You travel in vehicles your employer uses to transport goods or passengers
  • You regularly have to travel away from the municipality and the metropolitan area (if there is one) where your employer's relevant establishment (home terminal) is located
  • You regularly incur meal and lodging expenses while away from the municipality and the metropolitan area (if there is one) where your employer’s relevant establishment (home terminal) is located. This means that you must generally be away from home overnight to do your job

  If you meet these conditions, see Meals and lodging (including showers) for more details.

  For more information on meal allowances and subsidized meals, see Information Circular IC73-21R9, Claims for Meals and Lodging Expenses of Transport Employees.

  Even if you do not meet all of the above conditions, you may still be able to claim the cost of meals and lodging you incur in the year. For more information, see Other transport employees for details.

  If you are a long-haul truck driver, see Meal expenses of long-haul truck drivers.

  If you travel to the United States as a transport employee, see Trips to the United States.

  You must reduce your claim for meal and lodging expenses, by any non-taxable allowance or reimbursement you received or are entitled to receive from your employer.

  Your employer has to sign Form TL2. You do not have to send this form with your return, but keep it in case the CRA asks to see it later.

  You may be able to get a rebate of the GST/HST you paid. For more information, see Employee GST/HST Rebate.

  Completing your tax return

  Complete Form TL2, Claim for Meals and Lodging Expenses and claim your meal and lodging expenses on line 22900 of your return. If you still need help completing this form, please contact us by calling 1-800-959-8281.

• Railway employees

  You can also claim the cost of meals and lodging when you meet one of the following conditions:

  • You work away from home for a railway company as a telegrapher or station agent in a relief capacity, or carry out maintenance and repair work for the railway company
  • You are a railway employee who works away from the municipality and the metropolitan area (if there is one) where your employer’s relevant establishment (home terminal) is located. You also work at such a distant location that it is unreasonable for you to return daily to your home, where you support a spouse or common-law partner, or a dependant related to you

  If you meet one of these conditions, see Meals and lodging (including showers) for more details.

  You must reduce your claim for meal and lodging expenses by any non-taxable allowance or reimbursement you received or are entitled to receive from your employer.

  Your employer has to sign Form TL2. You do not have to send this form with your return, but keep it in case the CRA asks to see it later.

  You may be able to get a rebate of the GST/HST you paid. For more information, see Employee GST/HST Rebate.

  Completing your tax return

  Complete Form TL2, Claim for Meals and Lodging Expenses and claim your meal and lodging expenses on line 22900 of your return. If you still need help completing this form, please contact us by calling 1-800-959-8281.

• Other transport employees

  Even if you do not meet all of the conditions listed in Employees of a transport business, you may still be able to claim the cost of meals and lodging you incur in the year. For example, you may be an employee whose main duty of employment is transporting goods, but your employer's main business is not transporting goods or passengers.

  If you meet the conditions listed under Travelling expenses, you will qualify to use the simplified method to calculate your meal expenses described in Meals and lodging (including showers). For more information about both sets of conditions, read Information Circular IC73-21R9, Claims for Meals and Lodging Expenses of Transport Employees.

  If your employer has paid or will pay you for any part of your meal and lodging expenses, subtract that amount from your claim.

  Your employer has to sign Form TL2. You do not have to send Form TL2 with your return, but keep it in case the CRA asks to see it later.

  You may be able to get a rebate of the GST/HST you paid. For more information, see Employee GST/HST Rebate.

  Completing your tax return

  Your employer has to complete and sign Form T2200, Declaration of Conditions of Employment. You have to complete Parts 1 and 2 of Form TL2, Claim for Meals and Lodging Expenses and have your employer complete Part 3 . Trips that qualify as an eligible trip for long-haul truck drivers should be reported in Part 2B, and all other trips should be reported in Part 2A. Claim your meal and lodging expenses on line 22900 of your return. If you still need help completing these forms, call 1-800-959-8281.

• Meals and lodging (including showers)

  To calculate your meal expenses, you can use either the simplified or detailed method, or in certain situations, the batching method.

  The most you can deduct for meal expenses is 50% of your claim (unless you are a long-haul truck driver claiming meals for an eligible trip, as explained in Meal expenses of long-haul truck drivers). For example, if you use the simplified method, which is based on a daily meal rate of $23 (includes sales tax) per meal, the most you can deduct is $11.50 ($23 × 50%) for each meal.

  Under either the simplified or detailed method, you can claim one meal every four hours from the departure time, to a maximum of three meals per day. For the purposes of calculating the maximum number of meals allowed, a day is considered to be a 24-hour period that begins at the departure time.

  The simplified method – This is the easiest way to calculate your meal expenses since you do not have to keep receipts for your meals, although you do have to keep a detailed list of the trips you take in a record or log book, similar to the example below.

  The simplified method is based on a meal rate of $23 (includes sales tax) for each meal. Multiply the actual number of meals you ate by $23 (to a maximum of three meals per day) and report that amount on Form TL2, Claim for Meals and Lodging Expenses, under the "Meals bought" column of Part 2 – Trip and expense summary.

  Example of an excerpt from a log book maintained by a truck by a truck driver using the simplified method

   

  Meals and lodging expenses – Simplified method

  Date	Departure time	Destination	Date	Check-in time	Hours away	Km driven	No. of meals
  June 15	7:00	Montréal	June 17	16:00	57	900	7

  The detailed method – If you choose to use the detailed method to calculate your meal expenses, you have to keep a record or log book itemizing each expense, similar to the example below. You also have to keep receipts to support the amount you deduct. Report the actual amount you spent on meals on Form TL2 in the "Meals bought" column of Part 2 – Trip and expense summary.

  Example of an excerpt from a log book maintained by a truck driver using the detailed method.

   

  Meals and lodging expenses – Detailed method

  Date	Time in or Time out	Location	Restaurant	Type	Cost
  June 15	9:30	Oshawa	n/a	n/a	0
  June 15	n/a	Belleville	Paradise Restaurant	Lunch	$ 9.20
  June 15	n/a	Montréal	Dunn's Restaurant	Dinner	$22.99
  June 15	n/a	Montréal	Quebec Motel	Lodging	$64.50
  June 16	n/a	Montréal	Dunn's Restaurant	Breakfast	$  5.75
  June 16	n/a	Belleville	Paradise Restaurant	Lunch	$17.45
  June 16	16:00	Oshawa	n/a	n/a	0

  The batching method – When you are part of a work crew, such as on a train, your employer may provide you with cooking facilities. If you buy groceries and cook meals either by yourself or as a group, each person can claim up to $46 per day. As long as you do not claim more than this amount, you do not have to keep receipts. Report this amount on Form TL2 in the “Meals bought” column of Part 2 – Trip and expense summary.

  Lodging and showers

  You can deduct your lodging expenses. The costs of showers are also considered to be deductible as part of lodging expenses for transportation employees who may have slept in the cab of their trucks rather than at hotels. Keep your receipts to support the amount you deduct.

  How to claim your expenses

  Complete parts 1 and 2 of Form TL2, Claim for Meals and Lodging Expenses, and have your employer complete Part 3. Trips that qualify as an eligible trip for long-haul truck drivers (see Meal expenses of long-haul truck drivers) should be reported in Part 2B, and all other trips should be reported in Part 2A. Claim your meal and lodging expenses on line 22900 of your income tax and benefit return. You do not have to send Form TL2 with your return, but keep it in case the CRA asks to see it later.

• Meal expenses of long-haul truck drivers

  Meal and beverage expenses for long-haul truck drivers are deductible at a rate higher than the 50% permitted for other transportation employees. During eligible travel periods in 2025, meal and beverage expenses incurred are deductible at 80%.

  You are a long-haul truck driver if you are an employee whose main duty of employment is transporting goods by way of driving a long-haul truck, whether or not your employer’s main business is transporting goods, passengers, or both.

  A long-haul truck is a truck or tractor that is designed for hauling freight, and has a gross vehicle weight rating of more than 11,788 kg.

  An eligible travel period is a period during which you are away from your municipality or metropolitan area (if there is one) for at least 24 hours for the purpose of driving a long-haul truck that transports goods at least 160 kilometres from the employer's establishment to which you regularly report to work.

  For information on how to deduct your meals and lodging expenses, see Meals and lodging (including showers).

  You must reduce your claim for meal and lodging expenses by any non-taxable allowance or reimbursement you received or are entitled to receive from your employer.

  Your employer has to sign Form TL2. You do not have to send this form with your income tax and benefit return, but keep it in case the CRA asks to see it. 

  You may be able to get a rebate of the GST/HST you paid. For more information, see Employee GST/HST Rebate.

  Completing your tax return

  Complete Form TL2, Claim for Meals and Lodging Expenses and claim your meal and lodging expenses on line 22900 of your return. If you still need help completing this form, please contact us by calling 1-800-959-8281.

• Trips to the United States

  You can claim the meal and lodging expenses you incur while performing your duties as a transport employee in the United States (U.S.). If you are using the simplified method of reporting meal expenses, you are entitled to US $23 per meal while in the U.S. The maximum you can deduct for meal expenses is 50% of your claim, just as it is for trips within Canada (unless you are a long-haul truck driver, as described in Meal expenses of long-haul truck drivers).

  Calculate the total U.S. dollar amount of both the meal and lodging expenses incurred in the U.S. and convert these two totals to Canadian dollars by multiplying them by the Bank of Canada annual average U.S. exchange rate. You can get the exchange rate by going to Bank of Canada annual average exchange rates or call 1-800-959-8281. 

  Provide a summary of your trips to the U.S. in Part 2 – Trip and expense summary of Form TL2, Claim for Meals and Lodging Expenses. Attach a more detailed list of these trips to the form.

  Completing your tax return

  Complete Form TL2, Claim for Meals and Lodging Expenses and claim your meal and lodging expenses on line 22900 of your return. If you still need help completing this form, please contact us by calling 1-800-959-8281.

You can deduct expenses for buying and using a power saw (including a chain saw or tree trimmer) if you meet all of the following conditions:

• You work in forestry operations
• You use a power saw to earn your employment income
• You had to pay for the power saw under your contract of employment and your employer will not be reimbursing you

You can deduct the cost of a power saw in the year you buy it. However, you have to subtract from the purchase price of the new power saw the value of any trade-in or any amount you received from the sale of any power saw during the year.

You do not need to include a statement that breaks down the cost of running the power saw with your income tax and benefit return, but keep this statement with your records and receipts in case the CRA asks to see them. Also, keep with your records a copy of Form T2200, Declaration of Conditions of Employment, which has been completed your employer.

Expenses to operate a power saw include any GST and provincial sales tax (PST), or HST, you paid. Enter your power saw expenses on line 22900 of your income tax and benefit return. You may be able to get a rebate of the GST/HST you paid. For more information, see Employee GST/HST Rebate.

You cannot deduct expenses for travelling from your home to a place where you have to report to work on a regular basis. These expenses are personal. For example, you cannot deduct expenses for travelling from your home to a forest camp or to a cutting site if you go to that place on a regular basis. However, the motor vehicle expenses for travelling from a forest camp set up by your employer to the cutting site are incurred in the course of employment. These expenses are therefore deductible if you meet the conditions described in Allowable motor vehicle expenses.

You cannot deduct expenses for board and lodging at a place where you have to report to work on a regular basis. For example, if your employer has a work camp and you report there on a regular basis, you cannot deduct expenses for board and lodging (for example, camp fees) at the work camp since it is considered your employer’s place of business while you are working there.

You cannot deduct the cost of horses and harnesses, snowmobiles, or all-terrain vehicles because these are capital expenditures. Also, you cannot deduct capital cost allowance or interest you paid on money borrowed to buy these things.

Completing your tax return

Enter your power saw expenses on line 22900 of your return.

You can deduct expenses you paid in 2025 to earn employment income from an artistic activity if you did any of the following:

• composed a dramatic, musical, or literary work
• performed as an actor, dancer, singer, or musician in a dramatic or musical work
• performed an artistic activity as a member of a professional artists' association that the Minister of Canadian Heritage has certified
• created a painting, print, etching, drawing, sculpture, or similar work of art. For income tax purposes, it is not an artistic activity when you reproduce these items

These expenses include any GST and provincial sales tax (PST), or HST, you paid. You may be able to get a rebate of the GST/HST you paid. For more information, see Employee GST/HST Rebate.

The amount you can claim is limited to the lesser of:

a) the expenses you actually paid in 2025 plus any amounts you carried forward from previous years

b) the lesser of:

• $1,000
• 20% of your employment income from artistic activities

minus the following amounts you deducted from your income from an artistic activity:

• musical instrument expenses
• interest expense for your motor vehicle
• capital cost allowance for your motor vehicle

If you have expenses you cannot claim because of the 20% or $1,000 limit, you can deduct them from artistic income you earn in a future year.

Enter the amount you can deduct on the Artists' employment expenses line of Form T777, Statement of Employment Expenses.

If you earn artistic income from more than one employer, total your income and expenses before you calculate your claim. In other words, you cannot make a separate claim for each employer.

• Example

  You are a salaried employee whose employment income from artistic activities was $20,000 in 2025. During 2025, you paid $950 for advertising, $1,550 for travelling, and $350 for musical instrument expenses to earn this income. Since advertising and musical instrument expenses are not listed as deductible expenses of a salaried employee, you will choose the option to deduct these expenses separately as artists' employment expenses because it will allow a greater deduction for 2025. You meets the requirements for deducting your travelling expenses, and your musical instrument expenses, and you can claim your advertising expenses as an artist's expense.

  You calculate your artists' employment expenses as follows:

  The lesser of:

  a) $950 (advertising expenses)

  b) the lesser of:

  • $1,000
  • $4,000 (20% of $20,000)

  minus $350 (musical instrument expenses)

  Amount b) is $1,000 – $350 = $650.

  The lesser of a) and b) is $650.

  You calculate the amount to enter on line 22900 of your income tax and benefit return as follows:

  Travelling expenses

  Artists' employment expenses

  Musical instrument expenses

  Total to enter on line 22900

     $1,550

        $650

        $350

  = $2,550

You may be able to deduct the cost of eligible tools you bought in 2025 to earn employment income as a tradesperson. This cost includes any GST and provincial sales tax (PST), or HST that you paid.  

As an eligible apprentice mechanic, you must first calculate the tradesperson's tools deduction, if any, that you qualify for. For more information, go to Employed apprentice mechanics.

You may be able to get a rebate of the GST/HST you paid. For more information, see Employee GST/HST rebate. When completing Form GST370, Employee and Partner GST/HST Rebate Application, see if Situation 6 applies to you.

Eligible tools

An eligible tool is a tool (including associated equipment such as a toolbox) that meets all of the following conditions:

• You bought it to use in your job as a tradesperson and it was not used for any purpose before you bought it
• Your employer certified it as being necessary for you to provide as a condition of, and for use in, your job as a tradesperson
• It is not an electronic communication device (like a cell phone) or electronic data processing equipment (unless the device or equipment can be used only for the purpose of measuring, locating, or calculating)

Your employer has to complete Form T2200, Declaration of Conditions of Employment. Have your employer complete question 12 of Part C of the form to certify that the tools being claimed were bought and provided by you as a condition of your employment as a tradesperson. Attach to Form T2200 a list of the tools you are claiming, as well as the related receipts. You do not have to include Form T2200, your receipts, or your list of tools with your income tax and benefit return, but keep them in case the CRA asks to see them.

Deduction for tools

If you were a tradesperson in 2025, use the following formula to calculate your maximum tradesperson's tools deduction for the cost of eligible tools you bought in 2025.

Maximum deduction for eligible tools is the lesser of:

a) $1,000

b) the amount, if any, determined by the formula

A − $1,471 

where

A = the lesser of:

1. the total cost of eligible tools that you bought in 2025

2. your income from employment as a tradesperson for the year

plus the amount you received in 2025 under the Apprenticeship Incentive Grant and the Apprenticeship Completion Grant programs

minus the amount of any Apprenticeship Incentive Grant and Apprenticeship Completion Grant overpayments that you had to repay in 2025

• Example

  In 2025, you are employed as an electrician with ABC Company, and you need to purchase additional tools for your job. You paid $2,500 for the tools you needed and you earned $45,000 in employment income in 2025 as an electrician.

  You calculate your maximum deduction for eligible tools in 2025 as follows:

  Maximum deduction for eligible tools is the lesser of:

  a) $1,000

  b) the amount, if any, determined by the formula

  A − $1,471 

  where

  A = the lesser of:

  1. $2,500

  2. $45,000

  Your maximum deduction for 2025 is the lesser of $1,000 and $1,029 ($2,500 − $1,471). You claim a deduction of $1,000 on line 22900 of your 2025 income tax and benefit return.

Completing Form T777

Enter your claim on the Tradesperson's tools expenses line (1770) of Form T777, Statement of Employment Expenses.

Disposition of tools

As a tradesperson (including an apprentice mechanic), you may decide to sell any or all of the eligible tools for which you claimed a deduction. If so, you must include, in your income in the year you sold the tool(s), the amount by which the proceeds of disposition of each tool is greater than the adjusted cost of the eligible tool sold. The proceeds of disposition of a tool is the amount of money you sold the tool for.

If you are an employed apprentice mechanic, go to Disposition of tools for an eligible apprentice mechanic to calculate the adjusted cost of the tools you purchased.

Adjust the original cost of each eligible tool you bought by using the following formula :

Adjusted cost of an eligible tool = D − (D x [E/A])

where

D = the original cost of each eligible tool that you bought in 2025

E = the total of the tradesperson's tools deduction that you claimed in 2025^{Footnote 1}

A = the total cost of all eligible tools that you bought in 2025^{Footnote 2}

Complete a separate calculation for each eligible tool you bought in 2025.

• Example

  You bought two eligible tools for $4,500. Tool A and Tool B cost $2,500 and $2,000, respectively. You must calculate the adjusted cost of these tools. You calculate the adjusted cost of Tool A as follows:

  Adjusted cost of Tool A = D − (D x [E/A])

  where

  D        = $2,500

  E^{Footnote 3}   = $1,000 + $2,029 = $3,029

  A        = $4,500

  By applying this formula, the adjusted cost of Tool A is:

  $2,500 − ($2,500 x [$3,029/$4,500])

  = $2,500 − $1,683

  = $817

  The adjusted cost of Tool B is $654:

  $2,000 − ($2,000 x [$3,029/$4,500])

  Assume that you sell Tool A in 2026 for $1,500. The proceeds of disposition of Tool A ($1,500) is greater than its adjusted cost ($817). As a result, you would have to include the amount of $683 ($1,500 – $817) as income on line 13000 of your 2026 income tax and benefit return. If the proceeds of disposition had been less than the adjusted cost of the tool, you would not have been able to deduct the difference.

Completing Form T777

Enter your claim on the Tradesperson's tools expenses line (1770) of Form T777, Statement of Employment Expenses.

Completing your tax return

Enter on line 22900, the allowable amount of your employment expenses from the Total expenses line of Form T777, Statement of Employment Expenses.

Even though you may have already claimed the tradesperson's deduction for tools, you may also be able to deduct a part of the cost of eligible tools you bought in 2025 to earn employment income as an eligible apprentice mechanic. This cost includes any GST and provincial sales tax, or HST, you paid.

You may be able to get a rebate of the GST/HST you paid. For more information, see employee GST/HST Rebate. When completing Form GST370, Employee and Partner GST/HST Rebate Application, see if Situation 6 applies to you.

Eligible apprentice mechanic

You are an eligible apprentice mechanic if you meet all of the following conditions:

• You are registered in a program established under the laws of Canada or of a province or territory that leads to a designation under those laws as a mechanic licensed to repair self-propelled motorized vehicles (such as automobiles, aircraft, boats, or snowmobiles)
• You are employed as an apprentice mechanic

As an eligible apprentice mechanic, you must first calculate the tradesperson's tools deduction, if any, that you qualify for. You may qualify for this deduction if you bought eligible tools for your job in 2025. You can then complete the calculation described in the section called Deduction for tools for an eligible apprentice mechanic to determine if you can also make this claim in 2025.

Eligible tools

An eligible tool is a tool (including associated equipment such as a toolbox) that meets all of the following conditions:

• You bought the tool to use in your job as an apprentice mechanic and it was not used for any purpose before you bought it
• The tool is certified by your employer as being necessary for you to provide as a condition of, and for use in, your job as an apprentice mechanic
• The tool is not an electronic communication device (like a cell phone) or electronic data processing equipment (unless the device or equipment can be used only for the purpose of measuring, locating or calculating)

Your employer has to complete Form T2200, Declaration of Conditions of Employment. Have your employer complete question 13 of Part C of the form to certify that you bought and provided the tools you are claiming as a condition of your employment as an eligible apprentice mechanic. Attach to Form T2200 a list of the tools you are claiming, as well as the related receipts. You do not have to submit Form T2200 or your list of tools or receipts with your income tax and benefit return, but keep them in case the CRA asks to see them.

Deduction for tools for an eligible apprentice mechanic

Even though you may have already claimed the tradesperson's deduction for tools, you may also be able to deduct a part of the cost of eligible tools you bought in 2025 to earn employment income as an eligible apprentice mechanic.

Use the following formula to calculate your maximum deduction for the cost of eligible tools you bought in 2025 if you were an eligible apprentice mechanic at any time in 2025:

Maximum deduction for eligible tools^{Footnote 4} = (A − B) + C

A = the total cost of eligible tools that you bought in 2025^{Footnote 5}

B = the lesser of:

1. the total cost of eligible tools that you bought in 2025 as calculated in A

2. the greater of:

• $1,000 + the Canada employment amount claimed on line 31260 of your income tax and benefit return (maximum $1,471)
• 5% of:
  • your employment income as an eligible apprentice mechanic
  • plus the amount you received in 2025 under the Apprenticeship Incentive Grant and the Apprenticeship Completion Grant programs
  • minus any claim you made for the tradesperson's deduction for tools, and the amount of any Apprenticeship Incentive Grant and Apprenticeship Completion Grant overpayments that you had to repay in 2025

C = the amount, if any, of the maximum deduction for eligible tools that you calculated for 2024 that you did not claim in 2024 (your carry forward amount from 2024, if any)

• Example

  The Motor Company hired you as a second-year eligible apprentice mechanic on November 1, 2024. Based on the tools you bought during 2024, you calculated your maximum deduction for eligible tools in 2024 to be $3,500. You only claimed $1,500 of this amount on your 2024 income tax and benefit return. In 2025, you received $18,000 in income from your job as an eligible apprentice mechanic. In 2025, you received $1,000 under the Apprenticeship Incentive Grant program, and you also received income of $4,000 from other sources.

  During September of 2025, you bought two eligible tools for $4,500. You already calculated and claimed a tradesperson’s tools deduction of $1,000 for 2025. You had also claimed a Canada employment amount of $1,471.

  You calculated your maximum deduction for eligible tools in 2025 as follows:

  Maximum deduction for eligible tools = (A − B) + C

  where

  A = $4,500

  B = the lesser of:

  1. $4,500

  2. the greater of:

  • $2,471 ($1,000 + $1,471)
  • $900 [5% of ($18,000 + $1,000 – $1,000)]

  C = $2,000

  Therefore, your maximum deduction in 2025 is $4,029 ([$4,500 – $2,471] + $2,000) since it is less than your net income of $22,000 ([$18,000 + $1,000 – $1,000] + $4,000). You claim your deduction of $4,029 on line 22900 of your income tax and benefit return.

Completing Form T777

Enter your claim on the Apprentice mechanic tools expenses line (9131) of Form T777, Statement of Employment Expenses.

Disposition of tools for an eligible apprentice mechanic

As a tradesperson (including an apprentice mechanic), you may decide to sell any or all of the eligible tools for which you claimed a deduction. If so, you must include, in your income in the year you sold the tool(s), the amount by which the proceeds of disposition of each tool is greater than the adjusted cost of the eligible tool sold. The proceeds of disposition of a tool is the amount of money you sold the tool for.

Adjust the original cost of each eligible tool you bought by using the following formula:

Adjusted cost of an eligible tool = D − [D x (E/A)]

where

D = the original cost of each eligible tool that you bought in 2025

E = the total of the tradesperson's tools deduction and apprentice mechanic tools deduction that you claimed in 2025^{Footnote 6}

A = the total cost of all eligible tools that you bought in 2025^{Footnote 7}

Completing Form T777

Enter your claim on the Tradesperson's tools expenses line (1770) of Form T777, Statement of Employment Expenses.

Completing your tax return

Enter on line 22900, the allowable amount of your employment expenses from the Total expenses line of Form T777, Statement of Employment Expenses.