In 2020, the number of Canadians earning employment income while working at home increased substantially, due to the COVID-19 pandemic. In response, the Canadian government has provided two temporary and simplified methods for claiming an employment expense deduction:
- Option 1 (or the flat-rate method), allows a qualified individual to claim $2/day in employment expenses, up to a a max of $400.
- Option 2 (or the detailed method), allows deduction of actual expenses incurred.
Salaried and commissioned employees who worked from home (50% or more of the time for at least 4 consecutive weeks), due to COVID-19, are eligible to claim home office expenses on their 2020 tax return.
More information and details can be found on the CRA website.
Eligible employees may claim a flat rate of $2 for each day that they worked at home during a consecutive 4-week period, plus any other days they worked from home in 2020 due to COVID-19 (up to a maximum of $400).You don’t need supporting documents to claim this flat rate.
Between March 16 and December 31 there were 209 week days. During that period, there were 6 statutory holidays. The employee took 10 days of vacation and 3 sick days.
- Subtract the days not worked from the total week days to determine the total days worked from home (209 week days − 6 holiday − 10 vacation − 3 sick = 190 days worked from home)
- Multiply the total days worked from home by the $2 temporary flat rate amount (190 days × $2/day = $380 in claimable employment expenses)
If using this method to calculate your deduction, a T2200-s form must be completed, signed, and approved by your employer. The CRA has provided a calculator to aid in calculating and filling out these expenses on your form.
Once you have determined your employment use amount using the calculator, you can then add in additional expenses (such as employment use of a cell phone).
Using the calculator, you have determined that your employment use amount is $1,000. On top of that, you also have $1,000 in business cell phone use, and $500 in other business-related expenses.
$1,000 (employment use amount) + $1,000 (cell phone) + $500 (misc. expenses) = $2,500 in eligible deductions you may claim.