Home Office Expenses for Employees: How to Calculate and Claim Them with the CRA

With more Canadians working remotely, knowing how to properly calculate and claim your home office expenses is essential. Whether you’re self-employed, a salaried employee, or a commission employee, this post will walk you through what expenses are eligible, how to determine the portion you can claim, and how to complete the necessary CRA forms—including the T777 form.

Who Is Eligible to Claim Home Office Expenses?

Before you start, it’s important to confirm your eligibility:

• Employees & Commission Employees:
  If your employer requires you to work from home, you may be eligible to claim certain expenses. Commission employees, in particular, can claim a range of costs—often more than salaried employees. In both cases, you’ll need a completed T2200 form from your employer to certify your eligibility.

• Self-Employed Individuals:
  If you operate your business from home, you can claim a portion of your overall home expenses (and in some cases additional costs like mortgage interest or property taxes) as business expenses.

Always check the latest CRA guidelines or consult a tax professional to ensure you meet the criteria for your situation.

What Expenses Can Be Claimed?

The CRA allows you to claim expenses that fall into two broad categories—direct and indirect—based on how much of your home is used for business purposes. The CRA’s T777 form provides a detailed breakdown, especially for employees.

The CRA also offers a free calculator that you can use to calculate the expenses you can deduct.

Direct Expenses

These are costs incurred solely for your home office, such as:

• Office supplies (paper, printer ink, stationery)
• Repairs and maintenance specific to the workspace

Indirect Expenses

These are home-wide costs that must be prorated based on the percentage of your home used for business. According to the T777 form:

• For All Employees (including Commission Employees):
  • Utilities: Electricity, heat, water, and home internet access fees
  • Maintenance: Costs for cleaning supplies, light bulbs, etc.
  • Other Expenses: Rent (if you’re a renter)
• For Commission Employees:
  • In addition to the above, commission employees may also claim
    • Home Insurance (specific to the workspace)
    • Property Taxes (for the portion of the home used for work)

On the T777, these expenses are itemized on lines 42 through 47. For example, you’d add electricity, maintenance, home insurance (if applicable), property taxes, and rent to determine your total “work-space-in-the-home” expenses.

Calculating Your Home Office Expense Percentage

To figure out what portion of your home expenses is deductible, you need to calculate your employment-use percentage. The T777 form even provides an example calculation:

1. Measure Your Workspace:
   Determine the square footage of your dedicated home office.

2. Calculate the Total Area of Your Home:
   Find the total square footage of your residence.

3. Determine the Business Use Percentage:
   For example, if your office is 200 square feet in a 1,000-square-foot home, that’s 20%.
   Additionally, the CRA example adjusts this by the amount of time the space is used for work. In one sample, a dining room used for 40 hours out of 168 hours in a week—and representing 12% of the home’s total area—yields an employment-use percentage of about 2.9%.

4. Apply the Percentage:
   Multiply your total indirect expenses by your employment-use percentage. If your combined utility and rent expenses total $14,400 and your percentage is 2.9%, your claim would be approximately $417.60.

The T777 form requires you to compute this “employment-use amount” (line 48) and then compare it to your overall employment income to determine the final allowable expense on line 16.

How to Complete the CRA Forms

For Employees and Commission Employees

• Form T777 – Statement of Employment Expenses:
  Use this form to report your home office expenses along with other employment-related costs.

  • Work-Space-in-the-Home Section:
    As detailed on lines 42 to 47 of the T777, enter your expenses for utilities, maintenance, and—for commission employees—home insurance and property taxes.
    Then, calculate your employment-use amount (see the example provided on the form) and enter the result on line 48. Finally, compare this with your employment income (lines 51–53) to determine the allowable expense on line 16.

• Supporting Documentation:
  Attach a completed T2200 or T2200S form, which confirms that you were required to work from home.

For Self-Employed Individuals

• Form T2125 – Statement of Business or Professional Activities:
  Claim your home office expenses as part of your business expenses using a similar calculation method.
• Maintain Detailed Records:
  Keep all receipts, invoices, and documentation that support your calculations.

For further details on the T777 form, you can refer directly to the official document provided by the CRA (see ).

Final Thoughts

Claiming home office expenses can significantly reduce your taxable income—but only if you follow CRA guidelines closely. By understanding which expenses you’re eligible to claim (including the additional allowances for commission employees), accurately calculating your employment-use percentage, and completing the T777 form correctly, you can confidently optimize your tax return.

For the latest guidelines, visit the CRA’s official website or consult a tax professional. Always remember that detailed record keeping is key in the event of a CRA review.

Disclaimer: This post is for informational purposes only and should not be taken as tax advice. Always consult a professional for your personal tax situation.