PERSONAL TAX TRAINING

COMMISSION SALES EMPLOYEES DEDUCTION

Understanding the Deduction

Employees working on a commission basis often incur extra costs essential to performing their roles. This guide explains how you can claim deductions for these work-related expenses while following updated CRA guidelines for the 2025 tax year.

Eligibility Criteria

To qualify for the deduction, you must meet the following conditions:

• You work in a commission-based sales role.
• You incur expenses that are a required part of your employment and are not reimbursed by your employer.
• You obtain a signed Form T2200, Declaration of Conditions of Employment, confirming that these expenses are necessary.

Qualifying Expenses

The expenses you may claim include, but are not limited to:

• Travel Expenses: Costs such as vehicle mileage, parking fees, and tolls incurred while traveling for work. Maintain a detailed logbook to support your claim.
• Communication Expenses: A percentage of your cell phone and internet expenses when primarily used for work-related communications.
• Home Office Expenses: If your employment requires maintaining a home office, a portion of the related costs (utilities, rent, or mortgage interest) may be deductible.

Remember to allocate any shared expenses between personal and professional use appropriately.

Claiming and Filing

Follow these steps when filing your T1 tax return:

• Complete Form T777, Statement of Employment Expenses, detailing each expense.
• Attach the signed Form T2200 from your employer verifying the necessity of these expenses.
• Retain all receipts, mileage logs, and supporting documents for at least six years in case of CRA review.

Record Keeping and Detailed Mileage

Effective record keeping is critical. In addition to keeping receipts, maintain a detailed log of your business mileage that includes dates, distances, and purposes of trips. This record substantiates your travel expense claims.

Additional Considerations

Ensure that your claimed expenses are strictly work-related. Any reimbursements received from your employer will reduce the deductible amount. It is advisable to review the latest CRA guidelines periodically, as rules may evolve.

Disclaimer

The information provided here is for general guidance only and does not constitute professional tax advice. Please consult a tax professional for advice tailored to your individual circumstances.

If you need professional advice, you can book an appointment by calling 403-475-8600 or by visiting our booking page.

Last updated: February 2025