What Expenses Can You Deduct as an Employee?

If your job both pays and costs you money, you could be in line for some tax relief. Although most taxpayers can’t write off work-related costs, if the expenses are required for your position, you may be in luck. Here’s what expenses you can deduct as an employee.

Eligible Expenses

The CRA lists out all of the expenses you’re allowed to claim as part of your job.  You will need to complete a T777 and T2200 as part of your tax return. A wide range of expenses are eligible including

• Tools for tradespersons, mechanics, apprentices, and forestry workers.
• Vehicle expenses if you’re required to travel for your employment.
• Workspace-in-the-home expenses such as the cost of internet, computers, or office supplies.
• Meals and lodging expenses for transportation industry workers such as long-haul truckers.

If you’re a commission-based employee, your list of possible employment expenses also includes

• food and beverages for yourself if you are away from home,
• entertainment expenses for clients,
• car expenses, travel costs and overnight stays on business trips.

Employed artists may also qualify for additional expenses. Learn more on the Canada Revenue Agency’s Employed artists webpage.

Put it in Writing

Before claiming any work-related expenses, you must have a completed Form T2200 Declaration of Conditions of Employment signed by your employer.

Allowances and Reimbursements

In most cases, if you’re reimbursed fully for out-of-pocket expenses related to your job, you can’t claim these amounts. No double-dipping allowed. Since you aren’t out any money, there’s really no expense to you.

Allowances can be treated differently than full reimbursements. For example, your employer may allot you a per km rate for your vehicle expenses that is so low that it doesn’t cover the total expense you incurred. If this is the case, you may be able to claim the difference at tax time. Visit CRA’s Other employment expenses webpage for details.

Canada Employment Amount

Did you pay for your own work uniform? Is your hour-long commute to the office costing you a bundle in gas? Unfortunately, these expenses are not tax-deductible. But, luckily, there’s the Canada Employment Amount. This credit is meant to cover those day-to-day expenses related to your job. No extra paperwork needed. If you’re employed and earned more than the value of the credit ($1,433), you’re eligible. Even if you didn’t spend a dime on work clothes or other job-related expenses, you still qualify.

If you do have eligible employment expenses, don’t worry. You’re not missing out. The Canada Employment Amount can also be claimed if you qualify.

References & Resources

TurboTax: Where do I claim my employment expenses?