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Employment Expenses

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Personal Tax   ->   Filing Your Return  -> Employment Expenses

Employment Expenses Line 229

In the Canadian Tax and RRSP Savings Calculator, employment expenses can be included on the "other deductions" line.

Expenses that are paid to earn employment income are sometimes deductible, including any GST/HST that was paid on them.  This can only be done if your employer requires you to pay the expenses, and either you didn't receive reimbursement for the expenses, or the amount you did receive is included in your income.  Form T2200 must be completed by your employer in order to claim employment expenses - see below.

Expenses that are NOT deductible include premiums paid for medical, dental, group insurance, and emergency travel medical insurance.  Some of these items may be deductible as medical expenses.  Premiums paid for disability insurance coverage are also not deductible, but if you eventually have to receive disability insurance, it may be tax free if you have paid the premiums.  See our article Disability Insurance - Pay Your Own Premiums.

Employee work-space-in-home expenses

Employee motor vehicle travel expenses

Employees meals and lodging expenses - transport and railway employees

Employee clothing and footwear

Employee tool deductions

    - Tools deduction for employed tradespersons

    - Tools deduction for eligible apprentice mechanic

    - Gain on disposal of employee tools

Other Employment Expenses

Income Tax Act s. 8

Some other expenses may be deducted from employment income:

bulletlegal expenses incurred to collect or establish a right to amounts owed to the taxpayer that would be included in the taxpayer's employment income when received.  See the Canada Revenue Agency (CRA) interpretation bulletin IT-99R5 Legal and Accounting Fees (Archived) - see link at bottom.
bulletcertain clergy residence rent (or fair rental value for a residence owned by the taxpayer, the taxpayer's spouse or common-law partner) and utility costs.  See the CRA interpretation bulletin IT-141R Clergy residence deduction (archived), and CRA web page Line 231 Clergy residence deduction - see links at bottom.
bulletteachers exchange fund contribution not exceeding $250 in a year
bulletdues and other expenses of performing duties, as long as these are not reimbursed to the taxpayer, including
bulletannual union dues.  See CRA web page Line 212 Annual union, professional or like dues - see link at bottom.
bulletannual professional membership dues paid to maintain a professional status recognized by statute.  See CRA interpretation bulletin IT-158R2 Employees' professional membership dues (Archived) - see link at bottom.
bulletoffice rent, or salary paid to an assistant or substitute, if the payment is required by the contract of employment
bulletemployer's CPP, EI or QPIP premiums paid on the salary of an assistant or substitute
bulletcost of supplies consumed directly in employment duties, if the payment of these costs is required by the contract of employment
bulletemployee's registered pension plan contributions.  See CRA interpretation bulletin IT-167R6 Registered pension plans - employee's contributions - see link at bottom.
bulletemployee's contributions to a retirement compensation arrangement.  See CRA Guide T4041 Retirement compensation arrangements - see link at bottom.
bulletsalary reimbursement, or disability payment reimbursement
bulletforfeited amounts under a salary deferral arrangement
bulletexcess employees profit sharing plan (EPSP) amounts
bulletforfeited amounts under an employees profit sharing plan.  See CRA interpretation bulletin IT-379R Employees profit sharing plans - allocations to beneficiaries (Archived) - see link at bottom.

Other employment expenses which may be deductible and are explained in the CRA guide T4044 Employment Expenses (see link at bottom), include:

bulletcosts of power saws for employees working in forestry operations
bulletsales expenses of commission employees (complete a TD1X form to have income tax deductions based on your net commission income after expenses)
bulletPerforming artists expenses:
bulletmusical instrument costs for taxpayer employed as a musician.  This includes maintenance, rental, insurance, and capital cost allowance.
bulletartists' employment expenses.
bulletSee CRA interpretation bulletin IT-525R Performing Artists - see link at bottom.

In order to claim many of the above deductions, CRA form T2200, Declaration of Conditions of Employment (see link at bottom), should be completed by the employee and employer.

Form T777 Statement of Employment Expenses (see link at bottom) must be completed, and the deductions are claimed on line 229 of the tax return.

The above deduction amounts will include GST/HST and any provincial retail sales tax paid.  You may be eligible for a refund of the GST/HST included in the costs.  See Employee and Partner GST/HST rebate on the GST/HST page.

CRA Resources:

Note - all IT bulletins are archived

IT-99R5 Legal and Accounting Fees

IT-141R-Consolid. Clergy residence deduction and Line 231 Clergy residence deduction

IT-158R2 Employees' professional membership dues

IT-167R6 Registered pension plans - employee's contributions

IT-379R Employees profit sharing plans - allocations to beneficiaries

IT-522R Vehicle, Travel and Sales Expenses of Employees

IT-525R Performing Artists

Line 212 Annual union, professional or like dues

Line 229 Other Employment Expenses

T4041 Retirement compensation arrangements

T2200, Declaration of Conditions of Employment

T4044 Employment Expenses

T777 Statement of Employment Expenses

Revised: November 01, 2017

 

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