Home Office Deduction Canada 2026

← Back to Blog

If you work from home — whether as an employee or self-employed — you may be able to deduct a portion of your home expenses from your taxable income. The rules are different depending on whether you are an employee or run your own business. This guide covers both.

Employees — Home Office Deduction Rules 2026

Who qualifies?

As an employee, you can claim home office expenses only if:

• You were required to work from home under your employment contract, or your employer required it
• You use part of your home exclusively and regularly for work
• Your employer completed and signed Form T2200 (Declaration of Conditions of Employment)

What expenses can employees claim?

Expense	Salaried Employees	Commission Employees
Rent (portion of home)	Yes	Yes
Heat, electricity, water	Yes	Yes
Internet access fees	Yes	Yes
Maintenance and minor repairs	Yes	Yes
Home insurance	No	Yes
Property taxes	No	Yes
Mortgage interest	No	No
Capital expenses (renovation)	No	No

How to calculate the work-space percentage

Use whichever method applies:

• Area method: Home office area ÷ total home area × 100%
• Rooms method: Number of rooms used for work ÷ total rooms × 100%

Self-Employed — Home Office Deduction Rules 2026

Self-employed Canadians (sole proprietors, freelancers, contractors) have more generous home office rules than employees — and no T2200 is required.

Who qualifies?

Your home workspace must be either:

• Your principal place of business — where you do most of your work, OR
• Used exclusively and on a regular and continuous basis for meeting clients, customers, or patients

What expenses can self-employed claim?

• Rent or mortgage interest (not principal)
• Property taxes
• Heat, electricity, water
• Home insurance
• Internet (business portion)
• Maintenance and repairs
• CCA (Capital Cost Allowance) on the home — though this can affect the principal residence exemption

Calculation example (self-employed)

Home: 1,500 sq ft. Office: 150 sq ft. Work-space percentage: 10%.

• Monthly rent: $2,500 × 10% = $250/month = $3,000/year
• Annual utilities: $3,600 × 10% = $360/year
• Annual internet ($100/month): business portion 80% = $960/year
• Total deduction: ~$4,320/year

Key Rules to Remember

• Home office expenses can only reduce business income — they cannot create a loss (employees). Unused amounts carry forward to next year.
• The space must be used exclusively for work — a kitchen table where you also eat dinner does not qualify.
• Keep all receipts and records for at least 6 years in case of a CRA audit.
• Internet expense should be split between personal and business use — CRA will question 100% business claims.

Form T2200 — What Employers Need to Sign

Employees must have their employer complete Form T2200 before claiming home office expenses. The form confirms:

• The employee was required to work from home
• The employee pays their own home office expenses
• The employer does not reimburse these expenses

You do not submit T2200 with your tax return — keep it in case CRA asks for it. Employers are required to provide T2200 if conditions are met.