Wondering what employment expenses you can claim on your tax return? As an employee, you may be eligible to deduct certain job-related costs from your income. This can help lower your tax bill and increase your tax refund.
This guide will explain everything you need to know about claiming employment expenses in Canada.
What Are Employment Expenses?
Employment expenses are costs you incur as an employee to do your job. The Canada Revenue Agency (CRA) allows you to deduct valid employment expenses from your income when you file your taxes. This reduces your taxable income.
Some common employment expenses include:
- Vehicle expenses for driving for work purposes
- Public transit passes
- Travel expenses like accommodations and meals
- Office Supplies
- Workspace in the home expenses
- Training and education costs
- Professional membership dues
- Required licenses
Being able to deduct these costs from your income can lower the taxes you owe. That’s why tracking your employment expenses throughout the year is so important.
However, many costs related to going to work are not eligible as deductible employment expenses, such as:
- Daily commuting between home and work
- Most job clothing and uniforms
- Parking at your regular place of work
- Home internet access fees
- Fines and penalties
- Personal costs
Any expense you want to claim must be directly related to earning your employment income. Personal and living expenses are not deductible.
Why Claim Employment Expenses on Your Taxes?
To better understand this, there are two main reasons to claim employment expenses on your tax return:
Firstly, to reduce your taxable income and lower your overall tax bill. Any valid employment expenses you deduct will lower the net income amount you report to the CRA. The lower your net income, the less income tax you’ll have to pay.
Secondly, to get a tax refund. When you deduct employment expenses, it reduces the income taxes deducted from your paycheques throughout the year. This creates a tax refund the CRA owes you, which you’ll get back when you file your tax return.
That said, depending on the amount and types of employment expenses you’re eligible to claim, deducting these costs can significantly affect your tax bill and refund.
What Employment Expenses Can I Claim?
So, let’s take a closer look at which employment expenses you can claim. There are many job-related costs you can claim on your taxes as employment expenses. The most common deductible expenses include:
Transportation Costs
If you use your own vehicle for work, you can deduct transportation costs like gas, maintenance, insurance, and lease payments based on the percentage of kilometres driven for work purposes.
You can also claim the costs of public transit passes for travelling to and from work.
Travel Expenses
If your job requires business-related travel, you can deduct travel costs like:
- Airfare
- Hotel accommodations
- Meal expenses
There are limits on the meal amounts you can claim. Make sure to keep all receipts and record the business reason for each trip.
Employees in certain industries, like transportation, may have expanded travel deductions for meals and lodging expenses.
Supplies and Equipment
Purchases of supplies required for your job, such as office supplies, tools, equipment, and cell phones, are eligible expenses. Retain receipts showing what you bought and that it was for business use.
Workspace in the Home
If you’re required to work from home, you can deduct a portion of home office expenses like utilities, internet fees, maintenance, and rent. Calculate the percentage of home workspace vs personal space.
Training and Education
The tuition fees paid for career-related training and education may be deductible. This can include seminars, courses, conferences, and professional exams required to keep your job or maintain a professional designation.
Licenses and Dues
Professional license fees, membership dues, and annual union dues can also be claimed as employment expenses. Make sure these are your job requirements and retain receipts showing what you paid.
Legal Fees
You may deduct legal fees paid to collect or establish a right to employment income or commissions owed.
Musical Instruments
Musicians required to provide their own instruments can deduct related costs like maintenance, repairs, and insurance.
Tradesperson’s Tools
Tradespersons who must provide their own tools can deduct the cost of eligible new tools purchased in the year.
Other Expenses
Less common employment expenses can include moving expenses, employment agency fees, cell phone costs, and financial fees related to employment.
Always make sure any expense you want to claim is directly related to earning your employment income. Personal and living expenses are not deductible. If you are unsure, consult with a tax professional.
Who Can Claim Employment Expenses?
There are four types of taxpayers who are eligible to claim employment expenses, including:
- Employees: Salaried employees can claim eligible job-related expenses if required under their contract of employment.
- Commission Workers: Workers who earn commission can deduct most expenses from their commission income.
- Self-Employed: Individuals can deduct a broader range of business expenses from their self-employment income.
- Musicians and Tradespersons: Special tax deductions are available for instrument and tool costs in these occupations.
No matter how you earn your work income, make sure to only claim expenses that are wholly and directly related to earning that employment income.
What Conditions Are Required?
The CRA has set certain conditions that must be met to claim most employment expenses:
- Your employment contract requires you to pay for the expenses.
- You do not receive any non-taxable allowance for the expenses.
- Your employer completes and signs Form T2200 documenting your expenses.
- You keep detailed receipts and records of the amounts paid.
Additional conditions may apply depending on the type of expense. Ensure you understand the specific requirements for any expense you claim.
What Records Do I Need to Keep?
It’s critical to keep detailed records and receipts for all your employment expenses. The CRA requires proof to validate what you claim on your taxes.
Records you need to keep include:
- Receipts showing what you purchased and the amount you paid.
- Log books tracking the business use of vehicles, including dates, distances, and travel purposes.
- Form T2200 – Declaration of Conditions of Employment signed by your employer verifying your eligible expenses.
- Any other documentation related to your employment expenses.
The table below compares key employment expense categories and the documents you need to keep for each one:
| Expense Category | Eligible Expenses | Ineligible Expenses | Documentation Needed |
| Transportation | Gas, maintenance, insurance, lease payments for work vehicle use | Commuting to and from work | Mileage log, receipts |
| Travel | Airfare, lodging, and meals for work trips | Personal trips, commuting | Receipts, business travel records |
| Supplies & Equipment | Office supplies, tools, cell phones, and computers | Personal use portion | Receipts showing business use |
| Home Workspace | Utilities, rent, internet, and maintenance for a dedicated home office | Utilities, rent, internet, and maintenance fora dedicated home office | Calculate percentage used for work |
| Training & Education | Tuition, registration fees, and professional exams | Courses for personal interest or as part of a degree program | Receipts from educational institutions |
| Licenses & Dues | Professional license and membership fees, union dues | Initiation fees or penalties | Receipts showing payment |
Having complete records will help support your claims if the CRA selects your return for review. Keep all receipts and documents for at least six years.
How Do I Claim the Expenses on My Tax Return?
To claim employment expenses on your taxes, you’ll need to complete a few special forms:
- Form T2200 – Get your employer’s signature to certify your eligible employment expenses.
- Form T777 – Use this to calculate and summarize your employment expenses.
- Form GST370 – If you paid GST/HST on expenses, claim the rebate here.
Claim the total amounts from these forms on Line 22900 of your T1 General tax return. The CRA’s NETFILE-certified software makes completing these forms easy and auto-fills the amounts onto your return.
You can also use the CRA’s My Account online service to claim many common employment expenses when you file your taxes online.
When Can I Claim Employment Expenses?
You can only deduct employment expenses in the same year they were incurred and paid. For example, expenses you paid in 2025 can only be claimed on your 2025 tax return.
If your eligible expenses are greater than your employment income, you can carry forward the unused amounts to deduct in future years. Make sure to keep carrying forward unclaimed amounts until you can fully deduct them.
The deadline for claiming employment expenses is the same as your tax filing deadline, which is April 30 for most individuals. Don’t miss this deadline, or you won’t be able to deduct the expenses for that year.
Are There Limits on How Much I Can Claim?
The CRA does impose some limits on the amount of certain employment expenses you can deduct:
- Vehicle Expenses: Limitations apply to lease costs, capital cost allowances, and interest costs. Deductions cannot create a loss.
- Food and Entertainment: Only 50% of eligible meal and entertainment expenses can be claimed.
- Workspace in Home: Cannot exceed employment income after deducting other expenses.
- Legal Fees: Limited to amounts related to employment income or establishing the right to employment income.
- Musical Instruments: Limited to cost and CCA, up to the maximum net income earned from employment as a musician.
- Tradesperson’s Tools: Limited to a maximum of $1,000 per year.
For most other expenses, you can deduct the full amount as long as the expense is reasonable and directly related to earning your employment income.
Source: Employment Expenses 2024 – Government of Canada
Could I Get Audited for Employment Expense Claims?
It’s possible the CRA may select your tax return for review and audit your employment expense claims. Common triggers for a CRA employment expense audit include:
- Claiming expenses that are disproportionately high compared to your occupation and income level
- Deducting personal, living, or commuting costs as business expenses
- Lack of supporting documentation, like receipts and log books
- Unreasonable vehicle costs compared to the kilometres driven
- Claiming expenses paid by your employer
To avoid issues, maintain detailed records, claim only eligible expenses, calculate your claim amounts accurately, and satisfy all the deduction conditions.
Hiring an accountant can provide assurance that your employment expense deduction has been handled properly. But be aware that you are ultimately responsible for the accuracy of your tax return.
Common Mistakes to Avoid
Many tax filers make innocent mistakes when claiming employment expenses, which can lead to problems. Be aware of these six common errors:
- Claiming personal, living, or commuting costs that aren’t specifically tied to your job. Travel from home to work is not a valid employment expense.
- Missing deadlines and carrying forward expenses indefinitely. Make sure to claim expenses in the appropriate tax year.
- Incorrect or incomplete forms, such as missing employer signatures on Form T2200.
- Insufficient records and receipts to support claims if audited by the CRA.
- Forgetting to claim expense-related GST/HST rebates. This is a valuable added refund.
- Claiming expenses already reimbursed by your employer. You can only claim out-of-pocket costs.
Doing your homework on eligible expenses and keeping detailed records is key to avoiding issues. When in doubt, consult with a tax professional.
Maximizing Your Employment Expense Refund
To maximize the impact of your employment expense claim, make sure to:
- Carefully track and claim every eligible expense you possibly can throughout the year. Review your records before filing to identify any you may have missed.
- Apply for any applicable GST/HST rebates related to your expenses to pay back taxes.
- Consider asking your employer to reimburse or provide taxable allowances for valid employment costs to directly increase your income.
- If self-employed, determine if expenses would generate a larger deduction against self-employment income.
- Contribute to a retirement savings plan to lower net income and increase tax savings from expense deductions.
- Carry forward any unused amounts of eligible expenses to deduct in a future year when you have higher income.
Discuss your specific situation with a tax professional to find all potential opportunities to maximize your employment expense claims and related tax savings.
The bottom line
Claiming employment expenses on your taxes can be hugely beneficial, lowering your income tax bill and boosting your refund. Make sure to track your eligible job costs throughout the year and maintain detailed records. Only deduct expenses with a direct link to earning your employment income.
FAQs on employment expenses in Canada
How do I claim employment expenses on my taxes?
To claim employment expenses, complete Form T777 detailing your expenses and have your employer sign Form T2200 confirming your eligibility. Enter the amounts from these forms on Line 22900 of your T1 tax return. Keep all receipts in case CRA requests documentation.
Why should I claim employment expenses?
Claiming employment expenses you legitimately paid reduces your taxable income, lowers your income taxes owed, and can increase your tax refund. Every deductible dollar saves you money.
What expenses are not eligible as employment expenses?
You cannot claim the costs of commuting, clothing, parking, internet access, personal cell phones, meals during regular work hours, fines, or expenses paid by your employer.
Is there a limit on how much I can claim for expenses?
Yes, some categories like vehicle, legal fees, and home office have dollar or percentage limits. Most expenses can be fully claimed as long as they were reasonable work-related costs.
What expenses should I track during the year?
Track vehicle mileage and costs, travel receipts, supplies, training courses, cell phone bills, and any other expenses your employer requires you to pay to perform your job duties.
