How to Claim Home Office Expenses on Your 2025 Tax Return

As of November 2023, about one in five employed Canadians worked from home most of the time, down from the 40% peak in April 2020 but nearly triple the pre-pandemic baseline. If you are one of them, you may be leaving money on the table at tax time.

The Canada Revenue Agency allows employees and self-employed individuals to deduct a portion of their home expenses — but the rules have changed since the pandemic. Here is exactly what applies for the 2025 tax year (filed in 2026).

Why People Still Search for 2021, 2022, and 2023 Rules

It is normal to see search interest for 2021, 2022, and 2023 home-office rules because those were the transition years people remember most clearly:

• 2020 to 2022 used the temporary flat-rate method during the pandemic.
• 2023 onward returned everyone to the detailed method.

So when people search for older years, they are usually trying to answer one of two questions:

1. "Did the flat-rate method still apply in my year?"
2. "When did the CRA switch back to the detailed method?"

For 2025, the answer is straightforward: the flat-rate method is gone, and the detailed method is the only path.

The Flat-Rate Method Is Gone

During COVID-19, the CRA introduced a temporary flat-rate method: $2 per day worked from home, up to $400 (later $500), no receipts required. It was simple and popular.

It is also no longer available. The flat-rate method applied only to the 2020, 2021, and 2022 tax years. Starting with 2023, the CRA requires the detailed method for all home office expense claims.

Who Is Eligible?

To claim home office expenses as an employee for 2025, you must meet all of the following criteria:

1. Your employer required you to work from home. This can be a written or verbal agreement — it does not need to be in your employment contract.
2. You paid for the expenses yourself and were not fully reimbursed by your employer.
3. You meet one of these usage thresholds:
   • You worked from home more than 50% of the time for at least four consecutive weeks during the year, OR
   • You used the space exclusively to earn employment income and regularly for in-person meetings with clients, customers, or patients.
4. You have a completed and signed Form T2200 from your employer.

The four-consecutive-week period can fall anywhere in the year. You can have multiple qualifying periods. You do not need to work from home for the entire year.

What Employees Can Deduct

The eligible expenses depend on whether you earn a salary, wages, or commissions.

Work-space-in-the-home expenses. These are costs of running your whole home, so you claim only the share that belongs to your workspace (the calculation is in the next section).

Expense	Salaried Employees	Commission Employees
Electricity, heat, water	Yes	Yes
Home internet access fees	Yes	Yes
Rent (tenants only)	Yes	Yes
Maintenance and minor repairs	Yes	Yes
Home insurance	No	Yes
Property taxes	No	Yes

Separate expense categories. These are not work-space expenses and are not reduced by your workspace percentage. You claim the portion you used for work, which for a dedicated work phone or a box of printer paper used only for work is all of it.

Expense	Salaried Employees	Commission Employees
Office supplies (pens, paper, ink)	Yes	Yes
Cell phone airtime (work-use portion)	Yes	Yes
Lease of equipment (laptop, phone)	No	Yes

What you cannot claim as an employee:

• Mortgage interest or principal
• Furniture (desks, chairs, monitors)
• Computer or laptop purchases
• Software or subscriptions
• Capital improvements (windows, flooring, furnace)
• Basic home phone landline rate

How to Calculate Your Deduction

The CRA uses a square footage method to determine the portion of your home expenses that are deductible.

For a dedicated workspace (a room used only for work):

Workspace % = (Area of workspace) / (Total finished area of home) x 100

If your home office is 120 square feet and your home is 1,200 square feet, you can claim 10% of eligible expenses.

For a shared space (like a dining table or living room corner):

You must further reduce your percentage by the time you actually use the space for work:

Workspace % x (Hours worked per week / 168) = Claimable %

Step-by-Step: Filing Your Claim

Here is the process from start to finish:

1. Get Form T2200 from your employer. Ask early — some HR departments take weeks. Since 2024, the CRA has simplified the form: employers now answer two yes/no questions instead of estimating a percentage of duties performed at home.

2. Measure your workspace. Calculate the square footage of your dedicated workspace and the total finished area of your home. If you share the space, track your working hours.

3. Gather your receipts. Collect 12 months of bills for internet, utilities, rent, maintenance, and any other eligible expenses. You do not need to submit receipts with your return, but you must keep them for six years.

4. Complete Form T777. List your work-space expenses and apply the workspace percentage to them. Office supplies and cell phone airtime go on their own lines at their full work-use amount, with no workspace percentage applied.

5. Enter the total on Line 22900 of your tax return (Other employment expenses). File Form T777 with your return.

Self-Employed: Different Rules, Broader Deductions

If you are self-employed, you report home office expenses on Form T2125 (Statement of Business or Professional Activities), Part 7. No employer declaration is needed.

Self-employed individuals can claim everything employees can, plus:

• Mortgage interest (not principal)
• Property taxes
• Home insurance
• Capital cost allowance (CCA) on the home — though this can affect your principal residence exemption, so use it carefully

Common Mistakes to Avoid

Forgetting to get the T2200. Without this signed form from your employer, you cannot claim any home office expenses. Do not wait until tax season — request it as soon as possible.

Using the wrong floor area. "Total finished area" includes all finished rooms: hallways, bathrooms, and kitchen. Do not use just the rooms you consider "living space."

Claiming ineligible expenses. Furniture, computers, and software are the most common items people try to claim and get rejected. These are not employment expenses under CRA rules.

Mixing personal and work use without adjusting. If you use a shared space, you must apply both the area ratio and the time-use ratio. Claiming the full area percentage for a dining table will not survive an audit.

Not keeping receipts. The CRA can request documentation up to six years after filing. No receipts means no deduction if audited.

Track Your Deductions Alongside Your Registered Accounts

Home office expenses are just one piece of your tax picture. If you are getting a refund from employment expense deductions, make sure that money is going to the right place — whether that is your TFSA, RRSP, or FHSA.

NivoaFlow tracks your registered account contribution room automatically, so you know exactly where your refund should go. Try NivoaFlow free.

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Filing your 2025 taxes? Read our guides on RRSP vs TFSA: Which Should You Max First? and check your contribution room with our free Canadian tax calculators.

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This article is for informational and educational purposes only. It does not constitute financial, legal, tax, or investment advice. Always consult a qualified professional before making financial decisions. NivoaFlow is not a financial advisor.