From 2020 through 2022, the CRA offered a simplified flat-rate home office deduction of $2 per day worked from home, up to $500 per year. That temporary measure is gone. For 2023 and all subsequent tax years, only the detailed method applies — and you need your employer to complete a T2200 form to support the claim.
Eligibility for Employees
To deduct home office expenses as an employee, your home must be where you mainly do your work (more than 50% of the time), or it must be the space you use exclusively and regularly to meet clients or customers. Your employer must certify this on a T2200 (Declaration of Conditions of Employment). Your employer is not required to issue this form, but many do as a matter of course.
Calculating Your Workspace Percentage
Divide the area of your workspace by the total finished area of your home. For example: a 200 sq ft home office in a 1,500 sq ft home = 13.3% workspace percentage. If your workspace is not a dedicated room but part of a shared space (living room, kitchen), you apply the percentage only to the hours the space is used for work — this gets complicated and the CRA may scrutinize it.
What Employees Can Deduct
- Electricity, heat, water (proportional to workspace %)
- Rent (if you rent your home, proportional to workspace %)
- Internet access fees (proportional to workspace %)
- Home maintenance and minor repairs (proportional to workspace %)
- Commission-paid employees only: home insurance and property taxes
Mortgage interest is NOT deductible for employees working from home. Only rent is. If you own your home, the main benefit of the home office deduction as an employee is recouping a portion of your utilities and internet.
What Self-Employed Can Deduct
Self-employed individuals use Form T2125 (not T2200) and can claim a broader range of home expenses: rent or mortgage interest, property taxes, home insurance, maintenance and repairs, and utilities — all proportional to workspace percentage. Be aware that claiming CCA (capital cost allowance) on the workspace portion of your home can create a taxable capital gain when you sell, partially eliminating the principal residence exemption. Most accountants recommend not claiming CCA on your home unless you are absolutely certain you won't benefit from the PRE.
What the CRA Looks For
- T2200 signed by your employer (employees only)
- Reasonable workspace percentage — claiming 50% of a 3-bedroom home for a single office raises flags
- Actual bills and receipts for all expenses claimed
- Consistency year to year — if you claim 20% one year and 45% the next, expect questions
This article is for general information only. Tax rules change frequently and individual circumstances vary. Contact a qualified CPA before making tax decisions.