Home Office Deduction Calculator: how it works in 2026, with a worked example

Verified for tax year 2026: September 7, 2026Updated September 11, 2026By Nishant Malik

How this calculator works

The deduction is the work-use share of your home multiplied by the costs you are allowed to claim, and the allowed list depends on who you are:

Salaried employees (Form T777, line 22900, with a signed Form T2200): rent, electricity, heat, water, the utilities part of condo fees, home internet access fees, and maintenance and minor repairs.
Commission employees: the same list plus home insurance and property taxes.
Self-employed (Form T2125, line 9945): everything, including mortgage interest and property taxes, and optionally capital cost allowance.

The work-use share is the work space divided by the finished area of the home. A space that is also used for living is prorated by the hours a week it is used for work out of 168. Employees cannot claim more than their employment income and the self-employed cannot create a loss; the excess carries forward.

The tax saved is calculated by running your income through the 2026 federal and provincial tax tables with and without the deduction. For the self-employed the calculator also recomputes CPP, which falls with net business income below the $74,600 YMPE.

Worked example: a 150 sq ft office in a 1,500 sq ft Ontario home

The same home costs $18,000 of mortgage interest, $6,000 of property tax, $4,800 of utilities and internet, $1,800 of insurance and $5,400 of maintenance a year ($36,000 in total). The work space is 10% of the home.

	Salaried employee, $75,000	Commission employee, $75,000	Self-employed, $90,000 net
Costs that count	$10,200	$18,000	$36,000
× work-use share	10%	10%	10%
Deduction	$1,020.00	$1,800.00	$3,600.00
Income tax saved	$302.43	$565.45	$1,067.40
Effective rate	29.6%	31.4%	29.7%

The commission employee’s deduction is $780.00 higher than the salaried employee’s: exactly 10% of the insurance and property tax that only commission employees can claim. The self-employed person’s net income stays above the YMPE, so CPP does not change in this example.

Assumptions

Costs are for the whole home for the full year, and you worked from home all year. If you worked from home for only part of the year, enter only the costs paid during those weeks.
The employee cap is applied against the employment income entered; the CRA applies it against the income from that employer after other employment expenses.
Quebec employees also need form TP-64.3 from the employer; the Quebec return uses the same arithmetic and the calculator’s tax saving includes Quebec tax.
Office supplies, phone plans and equipment leases are claimed on other lines of the same forms and are not included here.

Questions people ask

Can I still claim the $2-a-day flat rate for working from home?: No. The temporary flat rate method applied to 2020, 2021 and 2022 only. For 2023 and later years employees use the detailed method: actual costs, the work-space share of the home, and a signed Form T2200 from the employer.
Do I need a T2200 from my employer?: Yes, if you are an employee. Form T2200, Declaration of Conditions of Employment, confirms you were required to work from home and to pay your own home-office costs. You keep it with your records rather than filing it; the claim itself goes on Form T777 and line 22900.
What can a salaried employee claim, and what can a commission employee add?: Salaried employees claim the work-space share of electricity, heat, water, the utilities part of condo fees, home internet access fees, maintenance and minor repairs, and rent. Commission employees can add home insurance and property taxes. No employee can claim mortgage interest, principal, furniture or capital repairs.
Can I deduct mortgage interest for my home office?: Only if you are self-employed. On Form T2125 the business-use share of mortgage interest, property taxes and insurance all count. Employees, whether salaried or on commission, can never deduct mortgage interest or principal.
How do I calculate the share of my home used for work?: Divide the size of the work space by the finished area of the whole home (halls, bathrooms and kitchen included), in square feet or metres. If the space is also used for living, multiply by the hours a week you work there out of 168; a kitchen table used 40 hours a week counts for 40 ÷ 168 = 23.8% of its area.
What if the deduction is more than my income?: Employees cannot deduct more than the employment income the expenses relate to, and the self-employed cannot use business-use-of-home expenses to create or increase a loss. In both cases the unused amount carries forward to the next year, as long as you are still with the same employer or running the same business.
Should I claim capital cost allowance on my home?: Almost never. CCA is optional for the self-employed and it converts part of your home into business property: the principal-residence exemption no longer covers that part, and the CCA claimed is recaptured when you sell. A few hundred dollars of deduction a year is rarely worth taxable gains on a home later.
How much tax does the deduction actually save?: The deduction reduces taxable income, so the saving is roughly your marginal rate times the deduction: about 30% at $75,000 in Ontario. For the self-employed it also lowers net business income, so CPP contributions (11.9% on income under the $74,600 YMPE) fall as well. The calculator runs both through the 2026 tax engine rather than a flat rate.

How to claim the home-office deduction

Employees need one form from the employer and one with the return; the self-employed fill in one part of the business statement. Keep the measurements and receipts for six years.

Before you fileAsk your employer for a completed and signed Form T2200, Declaration of Conditions of Employment. It confirms you were required to work from home and to pay your own costs. Keep it; it is not filed with the return.Form T2200 ↗
Before you fileCheck the eligibility test: you worked from home more than 50% of the time for at least four consecutive weeks, and you paid the costs yourself. Only the weeks that qualify count.Who can claim (detailed method) ↗
OnceMeasure the work space and the finished area of the whole home (halls, bathrooms and kitchen included). For a shared space, note the hours a week you work there.Determine your work space use ↗
All yearKeep the bills: rent or mortgage statements, property tax, insurance, utilities, internet and repairs. The CRA reviews home-office claims and asks for receipts.Expenses you can claim ↗
With the returnFill in the work-space-in-the-home section of Form T777 and carry line 9368 to line 22900 of the return. File the T777 with the return.Form T777 ↗
With the Quebec returnQuebec employees also need form TP-64.3 (General Employment Conditions) signed by the employer, and claim the expenses on the Quebec return with form TP-59.Revenu Québec: form TP-64.3-V ↗
With the returnComplete Part 7 of Form T2125, calculation of business-use-of-home expenses, and carry the result to line 9945. Any amount over your net business income carries forward to next year.Business-use-of-home expenses ↗
With the returnLeave the CCA line at zero unless you have taken advice: claiming CCA on the home costs part of the principal-residence exemption and is recaptured when you sell.Guide T4002, chapter 3 ↗

Sources

Every figure on this page comes from one of these primary sources. Data last verified September 7, 2026.