What expenses can I claim on my tax return?
As an employee in Canada, your ability to claim expenses on your tax return is generally limited. The Canada Revenue Agency (CRA) has strict rules about what can and cannot be deducted from your taxable income. For example:
Travel to and from work (commuting costs) cannot be claimed.
Clothing costs are not deductible—unless they are protective clothing required for your job.
Tools and equipment generally aren’t deductible either, unless you’re a tradesperson who purchased eligible tools necessary for your employment.
👉 You can find the full list of deductions and credits on the CRA’s official website. If you’ve had any work-related or personal expenses during the year, it’s a good idea to speak to a tax advisor to ensure you’re not missing out on any potential savings.
For most working holidaymakers, international students, and temporary workers, here are the most common tax deductions and credits to look into:
Canada Employment Amount
The Canada Employment Amount is a tax credit designed to help employees offset general work-related expenses—such as home office supplies, computers, and certain clothing items that are not otherwise deductible. This amount is meant to recognize the basic costs that come with being employed, even though most of these individual expenses cannot be claimed directly.
Key Facts:
- Automatically Applied: You don’t need to apply or submit receipts. As soon as you report employment income (from a T4 slip or similar), the credit is automatically applied to your return.
- Self-Employed? Not Eligible: If you’re self-employed or filing using a T2125 form, you cannot claim this amount.
- No Receipts Required: Since it’s a standard amount, you don’t need to provide documentation or prove specific expenses.
- Claimed Once Per Year: Even if you had multiple jobs during the year, you can only claim this amount once per tax year.
- It Increases Each Year:
- For the 2024 tax year: $1,433
- For the 2025 tax year: $1,471
Employment Expenses
If your job requires you to cover certain work-related expenses out of pocket—such as using your personal vehicle, cell phone, or purchasing supplies for work—you may be eligible to claim employment expenses on your tax return. These deductions can reduce your taxable income and help offset the cost of doing your job.
You can find detailed information about eligible employment expenses directly >> here << on the homepage of the CRA.
To claim employment expenses, you must meet all of the following conditions:
Expenses must be directly related to your job.
The costs must be necessary for performing your duties and not for personal use.
You must not have been reimbursed by your employer.
If your employer covered the cost (or reimbursed you), you cannot claim it.
Your employer must certify the arrangement.
They must complete and sign Form T2200 – Declaration of Conditions of Employment, which confirms that you were required to pay these expenses.
You must complete Form T777 – Statement of Employment Expenses.
This form is part of your tax return and is used to report and categorize your claimable expenses. You can find the T777 form here.
You must keep all receipts and records.
Unlike the Canada Employment Amount, employment expenses require proper documentation. The CRA may ask for proof if you’re audited.
Important: These rules apply only to employees. If you’re self-employed, different rules apply and expenses are reported through a different process (using the T2125 form).
Medical Expenses
If you had out-of-pocket medical expenses during the tax year, you may be eligible to claim them. However, only certain conditions and thresholds apply.
Basic Rules for Claiming Medical Expenses
Threshold Requirement:
You can only claim medical expenses that exceed the lesser of:3% of your net income, or
A fixed amount set by the CRA for that year (e.g. $2,635 for 2024).
Only Unreimbursed Amounts Can Be Claimed:
You can only claim the portion of the expense not covered or reimbursed by any health insurance plan, including travel insurance or a plan from your home country.Eligible Timeframe:
You can claim medical expenses for any 12-month period that ends in the tax year (as long as the expenses were not already claimed in a previous return).
A simplified example with an income of $10,000:
Medical expenses are $200
- Your 3% deductible is $300 ($10,000 x 3%)
- You cannot claim the medical expenses as the deductible is higher.
Medical expenses are $1,000
- Your 3% deductible is $300 ($10,000 x 3%)
- You will claim $700 medical expenses ($1,000 – $300)
- From those remaining $700 you can claim $105 towards taxes owing. ($700 x 15%)
Moving expenses
Generally, you can claim moving expenses you paid in the year if the following apply:
- You were a “resident for tax purposes” in Canada. Non-residents cannot claim those expenses.
- You moved to work or to run a business, or you moved to study courses as a full-time student enrolled in a post-secondary program at a university, a college, or another educational institution
- Your new home is at least 40 kilometres closer to the new place of work or business than your previous home was
- The move must be from one place where you ordinarily resided to another residence where you will ordinarily live. Short-term accommodations such as hostels, hotels, Airbnb’s, or staff housing typically do not qualify. For example, moving from one staff accommodation to another, or from a hostel to a hotel, does not meet the CRA’s definition of a qualifying move.
A few examples of typical moving expenses:
- Truck rental or moving services (e.g. U-Haul, professional movers)
- Transportation and storage of personal effects
- Gas and mileage costs for driving your personal vehicle
- Temporary lodging (hotel, motel) during the move
- Meals during the travel to your new home
- Costs of cancelling a lease, if applicable
- Connection/disconnection fees for utilities
A lot more information on this topic >> here << on the homepage of the CRA.
To claim moving expenses, you must fill out form “Form T1-M, Moving Expenses Deduction”. It is part of the online tax return. If you’re submitting a paper return, you must print, complete, and include the T1-M with your return.
You can find the form >> here <<.
Northern Resident Deduction
In recognition of the additional cost of living for those living in remote areas of Canada, the Canada Revenue Agency (CRA) grants special tax deduction, the Northern Resident Deduction.
A lot of information on this topic >> here << on the homepage of the CRA.
Requirements:
- To qualify, you must have lived in a dwelling in a prescribed northern zone (Zone A) or a prescribed intermediate zone (Zone B) for a continuous period of at least 6 consecutive months.
- An “dwelling” is a complete and separate living unit with a kitchen, bathroom, sleeping accommodation and a private entrance. It can be: a house, apartment, RV or other similar place in which a person usually sleeps and eats.
- An apartment also counts if the employer lets you live rent-free and pays the costs.
- A dwelling cannot be: a hostel, hotel room or room in a guesthouse.
For the Northern Resident Reduction you have to fill out the form “T2222 Northern Residents Deductions”, where you have to enter the period and your residential address from the north. It is part of the online tax return. If you send in a paper return, you need to print it and send it in with the tax return.
You can find the form >> here <<.
What about expenses for self employed?
If you worked as a contractor, freelancer, or sole proprietor during the tax year, you may be eligible to claim a much broader range of business-related expenses against your self-employment income. This can significantly reduce your taxable income, but it is more complex.
Due to the detailed reporting requirements and strict rules, it’s strongly recommended to consult with a tax accountant or advisor, especially if this is your first year reporting self-employment income.
If you’re a sole proprietor, your business income is included in your personal tax return. You are required to complete Form T2125 – Statement of Business or Professional Activities.
The form can be found > here < and the guide for the business expenses can be found > here <.