How should an employer complete Form T2200, and which employees need one?
For 2025, Form T2200 has 14 employer questions. If the employee's contract didn't require them to pay their own work expenses, answer No to question 1 and skip the rest. Otherwise answer the ones on commissions, supplies, home office, reimbursements, travel, allowances and tools, then sign Part D. A home office only employee skips from question 5 to Part D.
Which employees need a T2200 from you?
Only employees whose contract required them to pay their own expenses while doing the job. That's question 1 of the 2025 form, and the form tells you to answer yes even if you give an allowance or reimbursement for some or all of those expenses. If the answer is no, the employee isn't entitled to claim employment expenses and you aren't required to answer any of the other questions canada.ca.
The legal hook is subsection 8(10) of the Income Tax Act: a deduction under paragraph 8(1)(f), (h) or (h.1), or subparagraph 8(1)(i)(ii) or (iii), is allowed only if the employer confirms in prescribed form that the conditions were met and the form is filed with the employee's return laws-lois.justice.gc.ca. The T2200 is that prescribed form, but the CRA doesn't want it sent in: the form itself says the employee doesn't have to file it with the return and must keep it in case the CRA asks
canada.ca. This table shows which questions feed which claim.
| Expense the employee wants to claim | T2200 questions | Income Tax Act |
|---|---|---|
| Sales expenses of a commission employee | 1, 2, 6, 7 | 8(1)(f) |
| Office rent away from your premises, a substitute or assistant | 1, 3 | 8(1)(i)(ii) |
| Supplies used up directly in the work, cell phone use | 1, 3 | 8(1)(i)(iii) |
| Work space in the home | 1, 4, 5 | 8(13) |
| Travel other than vehicle costs (meals, lodging) | 1, 6, 7, 10, 11 | 8(1)(h), meals limited by 8(4) |
| Motor vehicle expenses | 1, 6, 8, 9 | 8(1)(h.1) |
| Tradesperson's tools | 1, 12 | 8(1)(s) |
| Apprentice mechanic's tools | 1, 13 | |
| Power saw in forestry operations | 1, 14 |
Question 7 exists because of subsection 8(4): a meal counts toward a travel or sales deduction only when the employee was away at least 12 hours from the municipality, and the metropolitan area if there is one, where your establishment they normally report to is located laws-lois.justice.gc.ca. Each employer fills in its own form, so an employee with two jobs needs a separate T2200 from each of you
canada.ca.
What does each of the 14 questions on the 2025 form ask you?
The 2025 edition (T2200 E (25)) is three pages: Part A for the employee, Part B for you, the 14 questions in Part C, your declaration in Part D and an employee section in Part E canada.ca. Here is what each Part C question needs from you
canada.ca.
| Question | What you answer | What to watch |
|---|---|---|
| 1 | Did the contract require the employee to pay their own expenses? Plus the employment period and any break | Yes even if you reimburse some or all of it |
| 2 | Paid wholly or partly by commission? Commissions paid, type of goods or contracts | Whether a business development or similar account pays expenses, and whether that commission (code 42) is in T4 box 14 |
| 3 | Required to rent an office away from your place of business, employ a substitute or assistant, pay for supplies used directly in the work, pay for a cell phone | Each is a separate yes or no |
| 4 | Did you require the employee to use part of their home for work? Then two follow ups: more than 50% of the time from home for at least four consecutive weeks, and regular, continual in person meetings there | The requirement can be a written or verbal agreement, not only the contract |
| 5 | Amount and type of every expense from questions 3 and 4 you reimbursed or will reimburse, and whether it's on the T4 | Includes amounts paid back, charges to your credit card and allowances |
| 6 | Normally required to travel to places that aren't your place of business, or between your locations? Describe the area | Be specific about the area of travel |
| 7 | Required to be away at least 12 consecutive hours from the municipality and metropolitan area where they report? How often | This drives the meal claim |
| 8 | Motor vehicle allowance received or entitled to | Fixed allowance amount, the per km rate and amount, and how much is on the T4 |
| 9 | Use of a company vehicle, and was the employee responsible for any of its expenses? | List the amount and type the employee paid |
| 10 | Expenses you required them to pay that you did or will reimburse | Same detail as question 5, for travel and vehicle costs |
| 11 | Other required expenses with no allowance or reimbursement | Type of expense only |
| 12 | Tradesperson required to buy and provide tools used directly in the work? | Sign and date the employee's tool list |
| 13 | Registered apprentice mechanic required to buy and provide tools? | Sign and date the list |
| 14 | Forestry operations, required to provide a power saw (including a chain saw or tree trimmer)? | Yes or no |
The shortcut most employers need: when the employee only had home office expenses, the form tells you to skip from question 5 straight to Part D canada.ca. The home office rules on the employee side, including what salaried and commission employees can deduct, are on our 2025 home office page.
How to report reimbursements and allowances without breaking the claim
Questions 5, 8 and 10 are where most forms go wrong. The employee can't claim anything you reimbursed or will reimburse, so the CRA needs the amount, the type and whether it's on the T4 canada.ca. A partial reimbursement doesn't block the claim: the employee claims only the part you didn't and won't pay back.
A vehicle allowance is tax free only when it's based solely on business kilometres, at a reasonable rate, and you don't also reimburse expenses for the same use. For 2026 the CRA's rates are 73 cents per km for the first 5,000 km and 67 cents after, plus 4 cents in the territories. An allowance that fails any test is taxable: report it in boxes 14, 24 and 26 and under code 40 on the T4 canada.ca. The full rules and the 2025 rates are on our allowance rate page.
| What you paid | Taxable? | On the T2200 | Can the employee deduct vehicle expenses? |
|---|---|---|---|
| Flat monthly car allowance | Yes, T4 boxes 14, 24, 26 and code 40 | Question 8: fixed amount and the amount on the T4 | Yes, if the other conditions are met |
| Reasonable per km allowance, nothing else | No | Question 8: rate and amount, $0 on the T4 | Generally no, unless they include it in income and show costs exceed it |
| Per km allowance plus gas reimbursement | Yes, the allowance fails the reimbursement test | Question 8 for the allowance, question 10 for the gas | Yes for unreimbursed costs, if the other conditions are met |
The second row matters. Under paragraph 8(1)(h.1), a salaried employee who received a tax free vehicle allowance can't deduct vehicle expenses laws-lois.justice.gc.ca. The CRA lets the employee include the allowance in income voluntarily and deduct the costs when they can show the employment driving costs more than the allowance
canada.ca.
Worked example: a sales rep on a flat car allowance
Your employee is a salaried sales rep. The contract requires them to drive their own car to client sites across the region and pay the costs, and you pay a flat $400 a month allowance. In 2025 they drove 24,000 km, 15,000 of them for work.
| T2200 entry | Your answer |
|---|---|
| Question 1 | Yes |
| Question 6 | Yes, area: client sites across the sales region |
| Question 8, fixed allowance | $400 × 12 = $4,800 |
| Question 8, per km rate | Blank |
| Question 8, amount on the T4 | $4,800 |
| Question 9 | No company vehicle |
The allowance isn't based on kilometres, so it's taxable and the full $4,800 goes in box 14 and code 40. That keeps the vehicle claim open. On the employee side, the work share of the car is 15,000 ÷ 24,000 = 62.5%. With fuel of $3,600, insurance of $2,100, maintenance and repairs of $900, and licence and registration of $300, total costs are $6,900, and 62.5% of that is $4,312.50 before any capital cost allowance or loan interest.
Those are all expense types the CRA lists as deductible, and the guide uses the same kilometres formula: work kilometres divided by total kilometres canada.ca. The employee claims it on Form T777 and needs a vehicle logbook to back the 15,000 km.
Now change one fact. If you had paid a reasonable per km allowance instead, the 2026 rates on the same 15,000 km would give 5,000 × $0.73 + 10,000 × $0.67 = $3,650 + $6,700 = $10,350, tax free and off the T4. The employee would then generally have no vehicle deduction at all.
Who signs the T2200, and what does the signature certify?
Part D says the information is, to the best of your knowledge, correct and complete. Enter the authorized person's name, title and phone number so the CRA can call to verify. An electronic signature is accepted when applied the way the CRA's guidance specifies canada.ca. You decide who in the organization is authorized to sign
canada.ca.
Signing doesn't approve the deduction. Each claim has its own conditions in Guide T4044 beyond the T2200, such as normally working away from your place of business for vehicle and travel claims, and no tax free allowance for travel canada.ca. Answer what's true and let the employee and their accountant work out the claim.
Give the signed form to the employee. They don't file it with the return. They keep it with their receipts for six years in case the CRA asks, and they complete Part E only if the CRA asks them to send the form in canada.ca.
Which cases trip up owner managers, commission staff and tradespeople?
Owner managers: a shareholder employee may have the authority to certify their own T2200, or one for a related employee, when the conditions for the claim are met canada.ca.
Commission employees: question 2 asks for the commissions paid. Paragraph 8(1)(f) caps the sales expense deduction at the commissions received in the year laws-lois.justice.gc.ca. If a business development account pays the expenses, the form also asks whether that commission (code 42) is included in box 14; see T4 box 14.
Tools: under questions 12 and 13, sign and date the list of tools the employee gives you. The employee attaches that list and the receipts to the T2200 canada.ca. A tool qualifies only if you certify that buying and providing it was a condition of employment, and electronic communication and data processing devices generally don't count
laws-lois.justice.gc.ca.
Cell phones: question 3 asks whether the contract required the employee to pay for a cell phone, and any reimbursement goes on question 5 canada.ca. Whether an employer paid plan is a taxable benefit is a separate question, covered on our cell phone page.
GST/HST rebate: an employee claiming the GST370 rebate may need you or an authorized officer, such as an immediate supervisor, controller or office manager, to complete Part C of that form too canada.ca.
Sources
Do I send the T2200 to the CRA?
No. You give it to the employee, who keeps it and doesn't file it with the return. The employee files Form T777 instead and keeps the T2200 for six years in case the CRA asks canada.ca.
Do I still answer yes to question 1 if I reimburse everything?
Yes. The form says to answer yes even if you give an allowance or reimbursement for some or all of the expenses, then list the reimbursements in question 5 or 10 canada.ca. The employee can't claim the reimbursed amounts.
Does the home office requirement have to be in the employment contract?
No. Question 4 says it can be a written or verbal agreement between you and the employee, and the CRA treats a formal telework arrangement the employee entered voluntarily as a requirement to work from home canada.ca.
Can a payroll provider or manager sign instead of an officer?
Yes, if you authorize them. The CRA leaves it to the employer to decide who may sign, and Part D asks for that person's name, title and phone number canada.ca.
General information for the tax year shown, not advice for a specific client. Confirm the facts before you file or remit.