Home Office Expenses for Employees

What are the two ways to claim the Home Office Expense

This deduction is claimed on your personal income tax return if you have incurred home office expenses for employment. Deductions reduce your income and therefore reduces overall income tax liability.

What are the two ways to claim the Home Office Expense for Employees

• Temporary flat rate method (click to CRA site)

• Detailed method (click to CRA site)

Temporary flat rate method

This method simplifies your claim for home office expenses.  If you worked more than 50% of the time from home for a period of at least four consecutive weeks in the year due to the COVID-19 pandemic, you can claim $2 for each day you worked from home during that period. You can then also claim any additional days you worked at home in the year due to the COVID-19 pandemic. The maximum amount that can be claimed is $400 per individual in 2020 and $500 per individual in 2021 and in 2022. This method can only be used for the 2020, 2021 and 2022 tax years.

If you qualify for claiming home office expenses, the simplified method allows you to count days to determine your deduction.  This typically can be completed within just a few minutes

Detailed method

This method allows you to claim the actual amounts you paid for your home office use. You must obtain a completed and signed Form T2200S or Form T2200 from your employer for you to qualify for the detailed method.  

If you qualify for claiming home office expense, this detailed method is much more time consuming, entails adding up all home office expenses for the year as well as the time and percentage of use of your home and lastly Form T2200S or a Form T2200 is required.  

It is recommended that you consider both methods to determine which option is most beneficial for you.  Each individual situation will be different as this is based on the expense of your home as well as the size of your home office.  

Home Office Expenses for Employees

Temporary flat rate Method

This method simplifies your claim for home office expenses.  If you worked more than 50% of the time from home for a period of at least four consecutive weeks in the year due to the COVID-19 pandemic, you can claim $2 for each day you worked from home during that period. You can then also claim any additional days you worked at home in the year due to the COVID-19 pandemic. The maximum amount that can be claimed is $400 per individual in 2020 and $500 per individual in 2021 and in 2022. This method can only be used for the 2020, 2021 and 2022 tax years.

If you qualify for claiming home office expenses, the simplified method allow you to count days to determine your deduction.  This typically can be completed within just a few minutes

What counts as a workday at home?

• days you worked full-time hours from home

• days you worked part-time hours from home

Days that cannot be counted:

• days off (example: weekends and statutory holidays that you did not work)

• vacation days

• sick leave days

• other leave or absence

Benefits of the Simplified Method

1. Simplified for you.  You do not have to:

• calculate the size of your work space

• add up the cost of your home office or keep supporting documents

• less tax filing fees from your accountant

2. Simplified for your employer.  Your employer does not have to:

• complete and sign Form T2200S or Form T2200

Downfall of the Simplified Method

3. Tax Savings may be higher using the Detailed method

Steps to Complete the Temporary Flat Rate Method

1. Confirm you are eligible

You must meet the eligibility criteria - Temporary flat rate method to claim your home office expenses.

2. Determining the number of days

Count the total number of days you worked from home in the year due to the COVID-19 pandemic and multiply that by $2 per day. This amount will be your claim for the year (up to a maximum of $400 per individual in 2020 and $500 per individual in 2021 and in 2022).

o # of days you worked from home within the period (maximum 200 days for 2020 and 250 days for 2021 and for 2022)

o times by $2 (temporary flat rate amount)

o equals Amount of your claim (to a maximum of $400 in 2020 and $500 in 2021 and in 2022)

Home Office Expenses for Employees

Detailed Method

This method allows you to claim the actual amounts you paid for your home office use. You must obtain a completed and signed Form T2200S or Form T2200 from your employer for you to qualify for the detailed method.  

If you qualify for claiming home office expense, this detailed method is much more time consuming, entails adding up all home office expenses for the year as well as the time and percentage of use of your home and lastly Form T2200S or a Form T2200 is required.  

It is recommended that you consider both methods to determine which option is most beneficial for you.  Each individual situation will be different as this is based on the expense of your home as well as the size of your home office.  

Claimable Expenses for Employees and Employees who earn Commission

Home Office Expenses for Business

Detailed Method

You can claim a home office for business if:

• Your home office must be your principle place of business or use exclusively for earning income for business OR

• The home office must be used on a regular and continuous basis for meeting clients, patients or customers

In additional to the above noted expenses for commissioned employees you can also claim the interest on your mortgage.  

Steps to Complete the Detailed Method

Steps

1. Confirm you are eligible

You must meet the eligibility criteria - Detailed method to claim your home office expenses

2. Calculate the home office expense

Calculate your home office expense.  The CRA calculator is a good tool to us  Use the calculator to determine the employment-use and expenses.  Precedence also has a spreadsheet to be completed prior to sending information for tax filing

3. Calculate the percentage use of your home

To calculate the percentage use of your home you will need your home total square feet as well as the square fee of your home office

4. Keep your records

Keep the following records for six years:

o Declaration of Conditions of Employment (Form T2200S or Form T2200)

o any receipts, supporting documents and records

Reference:  all items are referenced from the CRA https://www.canada.ca/en.html

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