Do I need a T2200 form to claim a home office as an employee?

Generally, employees need a signed Form T2200 from their employer to deduct home-office and other employment expenses. The form confirms you were required to incur those costs. The self-employed do not need a T2200 — they claim business-use-of-home expenses instead. Rules for specific years have varied, so confirm what currently applies.

Can I deduct my mortgage as an employee working from home?

Employees generally cannot deduct mortgage interest or property tax, even with a T2200 — they are typically limited to a share of utilities, insurance and, for renters, rent. Self-employed homeowners can claim a reasonable portion of mortgage interest and property tax as business-use-of-home expenses.

How do I figure out the percentage of my home I can claim?

Divide the area of your workspace by the total area of your home. For example, a 110-square-foot office in a 1,000-square-foot home is 11%. You then apply that percentage to your eligible home costs. Use real measurements — inflated percentages are a frequent audit trigger.

Can I claim my whole basement or kitchen?

Only the portion genuinely used for business, and only if that use is real and regular. The book describes claims for entire basements and kitchens being denied because the actual business use did not match the space claimed. Claim the real percentage, not a convenient one.

What happens to my claim if I move?

If you move, you may no longer be able to show the auditor your old workspace. That is why the book recommends documenting your home office now — with photos, a floor plan and a square-footage calculation — and keeping that evidence even after you relocate.

How long should I keep my home-office records?

As a general rule, keep your tax records for at least six years from the end of the tax year they relate to. Home-office expenses are heavily reviewed, so retaining bills, measurements and photos is well worth it.

How to Claim the Home-Office Deduction in Canada

Since the rise of remote work, the home-office deduction has become one of the most claimed — and most audited — items on Canadian returns. The rules differ depending on whether you are an employee or self-employed, and the CRA pays close attention because so many people over-claim. This guide, drawn from tax lawyer Dale Barrett’s "Pay WAY Less Tax!", explains who qualifies, exactly how to calculate the deductible portion of your home, and how to keep your claim audit-proof.

Who can claim a home-office deduction?

There are two distinct paths. If you are self-employed (a sole proprietor or in a partnership), you can deduct a reasonable portion of your home costs as "business-use-of-home" expenses, provided the space is your principal place of business or is used regularly and exclusively to meet clients.

If you are an employee, the rules are stricter. You generally need a signed Form T2200 ("Declaration of Conditions of Employment") from your employer confirming you were required to maintain a home office, and the workspace must be where you principally (more than 50% of the time) perform your duties — or be used regularly for meeting clients. The book emphasizes that an employment expense must be required by your employment and cannot have been reimbursed.

Self-employed: claim business-use-of-home expenses if the home is your principal place of business
Employee: usually need a signed T2200 and a workspace used principally for work
Either way: the space and the percentage you claim must be genuine and defensible

How do you calculate the deductible percentage of your home?

The core method is simple and is the same idea for employees and the self-employed: figure out what share of your home the office occupies, then apply that percentage to your eligible home costs.

The book gives a clean illustration: if you have a 1,000-square-foot home and use a 110-square-foot room as your office, you can claim 11% of your carrying costs. If you rent, that means 11% of rent, heat, power and insurance; if you own, you can typically claim that percentage of heat, power, insurance and (for the self-employed) a portion of property tax and mortgage interest.

Crucially, the book warns against padding the number: "It is best not to claim 11 per cent of your gardening expenses and swimming pool maintenance" and other questionable items that an auditor will deny.

Step 1: Measure your office’s square footage and your home’s total square footage.
Step 2: Divide office area by total area to get your business-use percentage (e.g. 110 ÷ 1,000 = 11%).
Step 3: Total your eligible home costs (rent or mortgage interest, heat, hydro, insurance, property tax, etc.).
Step 4: Multiply those costs by your percentage to get the deductible amount.
Step 5: Subtract any reimbursement or allowance you received from your employer.

What home costs can you actually include?

Eligible costs depend on whether you rent or own and on your employment status. Renters have an easier time because rent is a clear, recurring cost. Homeowners who are employees generally cannot deduct mortgage interest or property tax, while self-employed homeowners can claim a reasonable share of those.

Avoid the items that scream "audit." Lawn care, snow removal and pool maintenance have nothing to do with your office and are routinely denied.

Commonly accepted: a percentage of heat, electricity, water, home insurance, and (for renters) rent
Self-employed homeowners: also a reasonable share of property tax and mortgage interest
Maintenance and minor repairs related to the workspace
Generally denied: gardening, snow clearing, landscaping, pool upkeep

How do you audit-proof a home-office claim?

The book is blunt that home-office expenses are "low-hanging fruit" for auditors, largely because people "eyeball" the percentage or inflate it. The author recounts a client who claimed his entire basement — half the house — when its only business use was storing a dozen boxes of old files. The auditor saw through it.

The fix is documentation. Take actual measurements, keep the bills that prove your costs (property tax bills, mortgage statements, electricity bills), and — because people move — photograph the office and keep a floor plan. The book’s specific advice: document your home office with photos and floor plans, and email them to yourself so you have dated evidence "just in case."

This is general information, not tax advice. Tax rules and dollar amounts change every year — verify the current CRA rules or consult a tax professional before you file.

Measure, don’t guess, the square footage
Keep utility bills, property tax bills and mortgage/rent statements
Photograph the workspace and keep a floor plan with the area calculation
Retain everything for at least six years

Frequently asked questions

Do I need a T2200 form to claim a home office as an employee?: Generally, employees need a signed Form T2200 from their employer to deduct home-office and other employment expenses. The form confirms you were required to incur those costs. The self-employed do not need a T2200 — they claim business-use-of-home expenses instead. Rules for specific years have varied, so confirm what currently applies.
Can I deduct my mortgage as an employee working from home?: Employees generally cannot deduct mortgage interest or property tax, even with a T2200 — they are typically limited to a share of utilities, insurance and, for renters, rent. Self-employed homeowners can claim a reasonable portion of mortgage interest and property tax as business-use-of-home expenses.
How do I figure out the percentage of my home I can claim?: Divide the area of your workspace by the total area of your home. For example, a 110-square-foot office in a 1,000-square-foot home is 11%. You then apply that percentage to your eligible home costs. Use real measurements — inflated percentages are a frequent audit trigger.
Can I claim my whole basement or kitchen?: Only the portion genuinely used for business, and only if that use is real and regular. The book describes claims for entire basements and kitchens being denied because the actual business use did not match the space claimed. Claim the real percentage, not a convenient one.
What happens to my claim if I move?: If you move, you may no longer be able to show the auditor your old workspace. That is why the book recommends documenting your home office now — with photos, a floor plan and a square-footage calculation — and keeping that evidence even after you relocate.
How long should I keep my home-office records?: As a general rule, keep your tax records for at least six years from the end of the tax year they relate to. Home-office expenses are heavily reviewed, so retaining bills, measurements and photos is well worth it.