The one method left, and why December matters
Employees who work from home now have exactly one route to deducting home office costs: the detailed method. The temporary flat rate of $2 a day applied only to 2020, 2021 and 2022 and is no longer available, so a current claim is built from actual expenses, a signed employer form, and a defensible percentage. None of that can be reconstructed well in April. The form has to come from an employer who may be slow, the bills arrive across the whole year, and the work-space percentage has to reflect the space as it was actually used. December is when all three are still easy to get right — which is why this is a year-end guide, not a tax-season one.
Self-employed readers run under a separate regime: sole proprietors and partners claim business-use-of-home expenses on Form T2125, and the home must be the principal place of business, or a space used only for the business where clients are regularly met in person. Incorporated owners are a third case again — the corporation is a separate taxpayer — so the employee procedure below does not transfer. Ask an accountant which regime fits before borrowing steps across the line.
Who qualifies: the four conditions
For employees, every condition has to hold at once:
- Your employer required you to work from home. A written or verbal agreement is enough — but the requirement has to be real, not a preference.
- You pass one of two space tests. Either you worked from the home work space more than 50% of the time for at least four consecutive weeks, or you used the space only for work and regularly met clients or customers there in person.
- Your employer completed and signed Form T2200 (Declaration of Conditions of Employment). You keep the signed copy with your records; it is not sent in with the return, but the claim depends on having it if asked.
- Your employer did not reimburse the expenses. Reimbursed costs are not claimable costs.
The expenses are listed on Form T777 (Statement of Employment Expenses) and the total enters the return on line 22900. One limit surprises people: the claim cannot exceed the employment income remaining after other employment expenses, and anything that cannot be deducted carries forward to the next year rather than disappearing.
What counts, what doesn't — and why commission staff get a longer list
| Expense | Salaried employee | Commission employee |
|---|---|---|
| Rent for the home you live in | Work-use share | Work-use share |
| Electricity, heat and water | Work-use share | Work-use share |
| Home internet access fees (the monthly service) | Work-use share | Work-use share |
| Maintenance and minor repairs | Work-use share | Work-use share |
| Home insurance | No | Yes |
| Property taxes | No | Yes |
| Lease of a cell phone, computer, laptop or tablet | No | Yes |
| Mortgage interest or principal | No | No |
| Capital cost allowance on the home | No | No |
| Internet connection fees, furniture, capital costs (new windows, a furnace), wall decorations | No | No |
Two boundary cases cause most errors. First, supplies are not furniture: paper, pens and ink cartridges count as office supplies, while a desk, a chair or a computer does not for a salaried employee. Second, internet: the monthly access fee is the claimable item, not a one-time connection charge, and not equipment rental dressed up as one. When a bill bundles claimable and non-claimable items, split it on paper now, while the bill is in front of you — not from memory at filing time.
The percentage: one measurement, honestly made
The claim is the work-use share of eligible expenses, calculated on a reasonable basis — floor area is the standard one. Measure the work space, divide by the total finished area of the home, and that is your percentage. A dedicated room of 20 m² in a 200 m² home is 10%. A shared space shrinks the number twice: a dining table used for work also has to be prorated for the hours it is actually a desk out of the 168 hours in a week. And only the part of the year you actually worked from home counts — someone back in the office from September claims the home months, not the calendar year.
Worked through with round, illustrative numbers: suppose eligible annual expenses total $12,000 (rent share, utilities, internet access, minor repairs) and the measured work-use percentage is 10%. The claim is $1,200. That figure also calibrates expectations honestly: one tax-services analysis estimates that on a $75,000 Ontario salary, a $1,200 claim saves about $356 in tax. Worth having, worth filing correctly — and not the windfall the December rumour mill sometimes promises. The CRA also publishes an online employee-expense calculator that walks the detailed method step by step; run your draft numbers through it before filing and keep the printout with the file.
The December procedure
- Request the T2200 now, in writing. Ask each employer you had this year for a separate signed form. HR departments do not always move quickly in March and April; a December request lands before the rush and leaves time to chase a missing signature.
- Confirm the space test from your calendar. Note the weeks you worked from home more than half the time, or document the client-meeting use. Four consecutive weeks at over 50% is the threshold to be able to point to.
- Measure the work space and write down the math. Room dimensions, total finished area, the percentage, and — for shared space — the hours adjustment. One page, dated, kept with the bills.
- Assemble twelve months of bills. Rent receipts or lease, electricity, heat, water, internet access invoices, and receipts for maintenance and minor repairs. Mark bundled items and split them while the detail is fresh.
- Draft the T777 numbers in a spreadsheet. Expense by expense: annual total, percentage applied, claimable amount. This draft is what the spring filing copies — and what a reviewer would ask to see.
- File everything together, and keep it. Signed T2200, the percentage page, the bills, and the draft. Receipts and records should be kept for at least six years.
Why this order: steps 1–2 depend on other people and on memory, so they go first; steps 3–5 are arithmetic that December-you can still verify against real bills; step 6 is the whole point — a file that makes the spring claim a copying exercise instead of an excavation.
What success looks like
By January, you hold one folder — physical or digital — containing a signed T2200 from every employer, a dated one-page percentage calculation, twelve months of marked bills, and a draft T777 total. Filing becomes transcription. If any piece is missing, you know in January, while signatures and statements can still be chased, not in April when they cannot.