How to Fill Out and File the T777: T2200, Eligibility, and Deductions

To fill out Form T777, Statement of Employment Expenses, get a signed Form T2200 from your employer, complete only the sections of the T777 that match the costs you actually paid — motor vehicle, work-space-in-the-home, supplies, and any other eligible items — and carry the total to line 22900 of your T1 return. For the 2025 tax year, that T1 with the T777 attached is due by April 30, 2026.¹ Everything below assumes you’re filing for 2025 or later; the simplified T777S and T2200S from the pandemic years no longer apply.²

Get the T2200 First

You cannot claim anything on the T777 without a signed Form T2200, Declaration of Conditions of Employment. Your employer completes it to certify that your job required you to pay the expenses in question and that you were not reimbursed.³ If you had more than one employer during the year, you need a separate T2200 from each.⁴

Don’t send the T2200 in with your return. Keep it. The CRA can ask for it at any point, and if you can’t produce it, the deductions come off.

Confirm You’re Eligible to Use the Form

You must be an employee, not an independent contractor or self-employed, and your contract of employment must require you to pay your own expenses.⁵ Section 8 of the Income Tax Act lists every deduction an employee can take against employment income, and subsection 8(2) makes that list closed: if a deduction isn’t in section 8, you cannot claim it.⁶ The rules are tighter than they are for self-employed filers, so don’t assume that any cost connected to your work qualifies.

If your employer paid you an allowance that was included in your taxable income on your T4, you can still claim the unreimbursed portion of the underlying expenses. If the allowance was non-taxable, the expenses it was meant to cover are off-limits.⁶

Salaried Versus Commission Employees

Both groups can claim supplies, motor vehicle costs, parking, certain phone expenses, and home-office utilities. Commission employees can also deduct home insurance and property taxes (salaried employees cannot), lease costs for a cell phone, computer, or similar equipment reasonably related to earning commission income, and food, beverages, and entertainment at 50% of the amount paid where the expense was incurred to earn commission income.

Commission employees face a cap: except for interest and capital cost allowance on a vehicle, total deductions cannot exceed the commissions received that year.⁷ A commission employee who earned $12,000 in commissions but spent $14,000 on eligible expenses can only deduct $12,000, plus any vehicle interest and CCA on top.

Work Through the Form Section by Section

Download the current T777 from the CRA website, or use certified tax software, which walks through the same fields. You only complete the sections that apply. The summary at the top of the form is the last thing you fill in — work through the detailed sections below first, then bring the totals up.

Motor Vehicle Expenses (Lines 18–32)

If you use your own vehicle for work beyond ordinary commuting, this section calculates the deductible share. On lines 18 to 20, enter total kilometres driven during the year and kilometres driven for employment. The CRA expects a logbook with the date, destination, purpose, and kilometres for each business trip, plus odometer readings at the start and end of the year.⁸

Lines 21 through 28 capture your actual costs: fuel, insurance, licence and registration, maintenance and repairs, loan interest if you financed the vehicle, and lease payments. Line 25 is for capital cost allowance if you own the vehicle and want to claim depreciation. The form then divides employment kilometres by total kilometres and applies that percentage to your costs on lines 29 and 30.⁹ Subtract any vehicle reimbursement from your employer on line 31. What’s left on line 32 is your allowable motor vehicle expense.

Treat the logbook as essential, not optional. Reconstructing one after the fact is a common reason claims fail on review. Record trips as they happen, on paper or in a mileage app.

Work-Space-in-the-Home Expenses (Lines 42–55)

To claim home-office costs, your workspace must meet one of two conditions: you worked from home more than 50% of the time for at least four consecutive weeks during the year, or the space is used exclusively for work and you regularly meet clients or customers there in person.¹⁰

Lines 42 through 47 list the eligible costs: electricity, heat, water, home internet access, maintenance and minor repairs, and rent if you’re a tenant. Commission employees can add home insurance and property taxes.¹¹ Homeowners cannot deduct mortgage payments or mortgage interest.

To get the employment-use amount on line 48, measure the square footage of your workspace and divide it by the total square footage of your home. Apply that percentage to each eligible household cost. If you only used the space for part of the year, prorate accordingly. If your home-office expenses exceed your employment income for the year after other deductions, the unused portion carries forward and can be claimed in a later year against income from the same employer, but it cannot create or increase an employment loss.¹¹

Supplies, Phone, and Other Employment Expenses

Supplies you bought and used directly in your work, such as pens, paper, printer ink, and postage, go on the supplies line. Your T2200 must confirm your employer required you to provide them and did not reimburse you.⁴

For a cell phone, you can deduct the employment-use portion of a basic plan if you can show minutes or data were consumed doing your job. Split the monthly bill between personal and work use on a reasonable basis and claim only the work share. The basic monthly charge for a landline is not deductible, but long-distance calls made for work on any phone are.⁴

Other items that may apply include accounting or legal fees paid to collect salary or wages owed to you, professional or union dues required as a condition of employment, parking costs at locations other than your regular workplace, and travelling expenses like lodging and 50%-limited meals when your job took you away from your regular place of work.

Costs You Cannot Deduct

Several costs feel work-related but are excluded. Knowing them in advance prevents an overclaim.

Commuting between home and your regular workplace, by car or transit, is personal.⁴
Most work clothing, including suits and uniforms you bought yourself.
Mortgage interest and principal, even if you work from home.¹¹
Capital improvements to the home, such as replacing windows, flooring, or a furnace.
Furniture and wall decorations, even for a dedicated home office.
Basic landline phone service.⁴
Home internet connection or installation fees. Ongoing home internet access is claimable as a work-space-in-the-home expense; the one-time setup is not.¹¹

File the T777 with Your T1

The T777 is not filed on its own; it goes with your T1 Income Tax and Benefit Return. If you file electronically through NETFILE or a tax professional using EFILE, your software carries the T777 data into your return. If you file on paper, print the completed T777 and attach it to your T1 before mailing it to the tax centre for your region.⁴ Do not include receipts, logbooks, or the T2200 with the initial filing.²

The total from the T777 goes on line 22900 of your T1.⁷ It reduces your net income, which may also affect income-tested benefits such as the Canada Child Benefit or the GST/HST credit. Check that the figure you transfer matches the total on your T777; a mismatch is an easy way to trigger a processing delay.

Recover GST/HST Where You Can

If you paid GST or HST on eligible employment expenses such as office supplies, travel, or meals and entertainment, you may be able to recover some of that tax with Form GST370, Employee and Partner GST/HST Rebate. Attach the completed GST370 to your T1 and enter the rebate amount on line 45700.¹² You have up to four years from the end of the year the expenses relate to, but filing with your return is the simplest approach. Any rebate you receive must be included in your income the following year.

Keep Your Records for Six Years

Keep all supporting documents for at least six years from the end of the tax year they relate to. For the 2025 tax year, that means holding on to everything until at least the end of 2031.¹³ That includes your signed T2200, all receipts, your motor vehicle logbook, utility bills, and the calculations behind your employment-use percentages.¹⁴

The CRA can review your claim at any point during those six years, and the burden of proof is on you. Cancelled cheques, bank statements, and credit card records all count as supporting evidence; don’t rely on paper receipts alone, which fade and get lost. If you can’t back up a number when asked, the CRA will reverse the deduction and charge interest on the tax owing.

1
Canada Revenue Agency. What You Need to Know for the 2026 Tax-Filing Season
2
Canada Revenue Agency. How to Claim – Home Office Expenses for Employees
3
Canada Revenue Agency. T2200 Declaration of Conditions of Employment
4
Canada Revenue Agency. Employment Expenses 2025
5
Canada Revenue Agency. T777 Statement of Employment Expenses
6
Department of Justice Canada. Income Tax Act – Section 8
7
Canada Revenue Agency. Line 22900 – Other Employment Expenses
8
Canada Revenue Agency. Motor Vehicle Records
9
Canada Revenue Agency. Calculating Motor Vehicle Expenses
10
Canada Revenue Agency. Eligibility Criteria – Detailed Method
11
Canada Revenue Agency. Expenses You Can Claim – Home Office Expenses for Employees
12
Canada Revenue Agency. How to Apply – GST/HST Rebate for Employees and Partners
13
Canada Revenue Agency. Where to Keep Your Records, for How Long and How to Request the Permission to Destroy Them Early
14
Canada Revenue Agency. How Long Should You Keep Your Income Tax Records?