How Do You Claim Employment Expenses Using the T777 or TP-59-V

f you incur out-of-pocket expenses to do your job—like using your own car, maintaining a home office, or purchasing supplies—there may be a way to reduce your taxes. In Canada, employees can deduct certain costs using Form T777 (Statement of Employment Expenses), and in Quebec, TP-59-V serves a similar purpose.

These deductions won’t apply to every employee. But if you are required to pay these expenses and have supporting documentation from your employer, they can lead to real tax savings. This becomes especially important in hybrid work environments, commission-based roles, or jobs that require travel, tools, or client engagement.

What Is Form T777 (and TP-59-V)?

Form T777 is a federal CRA form that allows employees to claim allowable expenses directly related to earning income from employment. These expenses reduce your taxable income, not just your tax payable, which makes them powerful tools when used correctly.

If you live in Quebec, you must also complete Form TP-59-V and submit it alongside your provincial return to claim your employment expenses at the provincial level.

These forms are not used in isolation—you’ll also need a T2200 or TP-64.3-V from your employer, which confirms that your job conditions require you to pay these expenses and that you were not reimbursed for them.

Who Can Use These Forms?

To claim employment expenses using the T777 or TP-59-V, you must meet all of the following:

• You were required to pay expenses to earn employment income

• The expenses were not reimbursed by your employer

• You received a signed T2200 (or TP-64.3-V in Quebec) form from your employer

• The expenses fall into one of the CRA’s eligible categories

Common roles that qualify include:

• Commissioned sales employees

• Employees required to work from home or travel

• Employees paying for supplies or licensing

• Certain tradespeople and apprentices using personal tools

At Optimize, we help you review whether your work arrangement qualifies, and if so, which deductions make the most sense to pursue.

What Types of Expenses Can Be Claimed?

The type of expense you can claim depends on your employment duties and whether you are a salaried or commissioned employee. Some expenses are limited to commission earners, while others apply to both groups.

Here is a quick summary of allowable expenses:

How to Fill Out the T777 (or TP-59-V)

Filling out these forms requires attention to detail. Here’s a simplified step-by-step guide:

1. Get your T2200 or TP-64.3-V signed
   This form confirms the employer requires you to pay certain expenses. Keep it for your records.

2. Gather all receipts and records
   Keep detailed logs for vehicle use, home office utilities, supplies, and any other claimable expenses.

3. Calculate your total eligible expenses
   Break out personal versus work-related use. For example, only the work portion of your cell phone or internet bill is deductible.

4. Complete Form T777 or TP-59-V
   Enter each expense into the appropriate section, such as Line 1 (motor vehicle), Line 3 (supplies), or Line 7 (home office expenses).

5. Transfer the total amount to your tax return
   On your federal return, this amount goes on Line 22900 of your T1 General. In Quebec, include it in the equivalent section of the TP-1 form.

6. Keep all supporting documents
   The CRA and Revenu Québec may ask for proof. Keep receipts, mileage logs, your signed T2200/TP-64.3-V, and a record of any reimbursement policies.

What If You Work From Home?

Since 2020, more employees have been eligible to claim home office expenses. There are two ways to do it:

• Temporary flat rate method (no receipts, simple): $2/day, up to $500 (now discontinued for most years after 2022)

• Detailed method (requires receipts and T2200): Based on a percentage of your home used for work

If you qualify under the detailed method, you can claim a portion of utilities, rent (commission employees only), maintenance, and internet. Mortgage interest, principal, and property taxes are not deductible for salaried employees.

Optimize helps you choose the method that results in the best tax outcome, and ensures your work-from-home setup meets CRA guidelines.