Employment Expenses

Employment expenses
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If your employer requires you to pay expenses to earn employment income, under certain conditions, you may be eligible to deduct employment expenses. Allowable employment expenses will be reported on line 229 of your income tax return.

What is required to claim employment expenses?

A T2200 form, Declaration of Conditions of Employment Expenses must be completed and signed by your employer. On this form, your employer allows you to deduct certain expenses by marking “Yes” or “No”.

Allowable Expenses:

Your employer can allows following expenses related to your employment for tax deduction. Most common expenses are (Open tax checklist and detailed explanation of the following expenses):

– Allowable motor vehicle expenses
– Traveling expenses
– Parking
– Supplies
– Salary expenses
– Office rent
– Work space in the home office

Upon CRA audit what you have to provide?

If CRA audits you and you can’t fulfill the requirements set out in this document then CRA will deny your expenses and recalculates your tax liability and charge interest and penalties as well. See here is an example from CRA audit letter where they denied the expenses and made the tax adjustment because tax payer wasn’t able to meet the criteria.

For more details on Employment Expenses see CRA guide T4044

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Nafees Chaudhry

Nafees Chaudhry is the founder of CNC. Providing accounting, tax, and consulting services to small businesses and individuals for 23+ years.

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