For the 2023 tax year and later, the temporary flat-rate method is gone — it applied only to 2020, 2021 and 2022. Employees who work from home must now use the detailed method and obtain a signed Form T2200, Declaration of Conditions of Employment, from their employer. The self-employed can deduct business-use-of-home expenses under their own test, and in both cases home-office costs cannot create or increase a loss — any unused amount carries forward. This guide sets out the current rules for employees and the self-employed in Alberta and BC. Source: Home office expenses for employees — what has changed — Canada.ca.
The flat-rate method ended after 2022
During the pandemic, the CRA offered a temporary flat-rate method that let employees claim a set daily amount for working from home without tracking actual expenses or getting a signed form. That shortcut applied only to the 2020, 2021 and 2022 tax years and is not available for 2023 and later. Any guidance that still references the flat-rate option is out of date — for 2023 onward there is one route for employees: the detailed method.
Employees: the detailed method and Form T2200
To claim home-office expenses as an employee for 2023 and later, you must:
- Use the detailed method — claim the employment-use portion of eligible costs, supported by receipts and records; and
- Have a signed Form T2200, Declaration of Conditions of Employment, from your employer confirming you were required to work from home and to pay for certain expenses.
A written or verbal arrangement to work from home can satisfy the "required to" condition, but the signed T2200 is the document that supports the claim if the CRA reviews it. Without it, an employee's home-office deduction is not supportable.
Eligible employee costs generally include a reasonable share of utilities (heat, electricity, water), home maintenance, and, for those who rent, a portion of rent. The set of eligible costs is narrower for employees than for the self-employed — for example, employees generally cannot claim mortgage interest or property tax, and commission employees have a slightly wider list than salaried employees.
Self-employed: the business-use-of-home test
A self-employed person deducts business-use-of-home expenses when the work space is either:
- the principal place of business, or
- used exclusively to earn business income and used on a regular and continuous basis to meet clients, customers or patients.
Source: Business-use-of-home expenses — Canada.ca.
If either branch of the test is met, you deduct the business-use portion of eligible home costs.
| Cost | Deductible for self-employed (business-use portion) |
|---|---|
| Utilities (heat, electricity, water) | Yes |
| Home insurance | Yes |
| Maintenance and minor repairs | Yes |
| Property tax | Yes |
| Rent (if renting) | Yes |
| Mortgage interest (if owning) | Yes |
| Mortgage principal | No — never deductible |
The business-use portion is usually calculated by area — the square footage of the workspace divided by the total area of the home — adjusted where a room is shared between business and personal use.
The loss limitation and carry-forward
A rule that catches many claimants: business-use-of-home expenses cannot create or increase a business loss. If your eligible home expenses exceed the business income left after your other deductions, the excess cannot push income below zero. Instead, the unused amount is carried forward and can be applied against income from the same business in a future year. So the deduction is never lost — it is deferred until the business has income to absorb it.
For the broader list of what a business can write off, see our small business tax deductions in Canada guide; if you are weighing employee versus contractor status, our contractor vs employee guide explains how the CRA decides.
How RN Canada helps
RN Canada makes sure Alberta and BC clients claim home-office costs the way the CRA now expects — confirming the self-employed business-use-of-home test, documenting the area-based split, securing a signed T2200 where an employee claim applies, and tracking the loss-limited carry-forward so nothing eligible is lost. Our bookkeeping and tax filing service captures these costs cleanly, and you can browse common questions in our bookkeeping FAQ hub.
This page is general information, not personalized tax, accounting, or legal advice. Speak with RN Canada about your specific situation.
Frequently asked questions
No. The temporary flat-rate method applied only to the 2020, 2021 and 2022 tax years and is not available for 2023 and later. For 2023 onward, employees must use the detailed method, which requires a signed Form T2200, Declaration of Conditions of Employment, from the employer and supporting records of the actual expenses being claimed.
Since 2023, employees must use the detailed method and obtain a signed Form T2200, Declaration of Conditions of Employment, from their employer confirming they were required to work from home and to pay for certain expenses. They then claim the employment-use portion of eligible costs and keep receipts. The flat-rate shortcut that existed for 2020 to 2022 no longer applies.
A self-employed person can deduct business-use-of-home expenses when the work space is either their principal place of business, or a space used exclusively to earn business income and used on a regular and continuous basis to meet clients, customers or patients. They deduct the business-use portion of costs such as a share of utilities, insurance, maintenance, property tax, and rent or mortgage interest.
No. Business-use-of-home expenses cannot be used to create or increase a business loss. If your eligible home expenses exceed the business income remaining after other deductions, the excess cannot reduce income below zero. Instead, the unused amount is carried forward and can be applied against income from the same business in a future year.
Eligible costs generally include a reasonable share of utilities such as heat, electricity and water, home insurance, maintenance, and either rent or the mortgage interest and property tax portion for a home you own. You claim the business-use or employment-use portion, usually based on the area of the workspace relative to the home. The principal portion of mortgage payments is never deductible.