Home office deduction calculator 2026
For 2026, your home office deduction is the work-space share of eligible home costs: the area you work in ÷ your home's finished area (× hours worked ÷ 168 if the space is shared). Employees need a signed T2200 and claim on T777; self-employed people claim on T2125. The claim can't be more than the income it's claimed against.
2026 rulesBC and AlbertaRuns in your browserSummary free, no sign-upSources checked 28 Oct 2026Estimate only
Try an exampleOne click fills the form. Change any number after.
Is this the right calculator? Want your whole business picture, with CPP, GST and the home office together: the self-employed tax calculator. Only a job and the usual deductions: the income tax calculator. The rules in full: our home office guide.
Your 2026 estimate
$360
Your work space is 10% of your home, so 10% of $3,600 of eligible costs is deductible: $360. At your marginal rate of 28.2%, it reduces your 2026 income tax by about $102.
Estimate, not tax advice. General information based on the 2026 rules and rates; your return may differ. The CRA decides what you can claim, against your records.
See every line behind this numberThe share, each eligible cost, the limit, the tax it saves, what to do nextNot sure you qualify?
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2026 rules and rates used in this estimate2026 tax year (return filed in 2027). From our tax engine; each rule links to its source, checked 28 Oct 2026.
| Rule | What it says | Source, checked |
|---|---|---|
| Work-space share | Area of the work space ÷ finished area of the home. A shared area is also × hours worked ÷ 168 hours a week; a designated room isn't. | CRA: Determine your work space useChecked 28 Oct 2026 |
| Flat rate | The temporary flat rate ($2 a day) only applied to 2020 to 2022. For 2026, employees use the detailed method. | CRA: What the changes areChecked 28 Oct 2026 |
| Employee conditions | Required to work from home (a written or verbal agreement, including a formal telework arrangement); more than 50% of the time at home for at least 4 consecutive weeks, or a space used only for work and regularly for in-person meetings; costs paid by you and not reimbursed; a signed Form T2200. | CRA: Eligibility criteria, detailed methodChecked 28 Oct 2026 |
| Employee costs | All employees: electricity, heat, water, the utilities part of condo fees, home internet access fees, maintenance and minor repairs, rent. Commission employees also: home insurance and property taxes. Nobody: mortgage interest or principal, connection fees, furniture, capital costs. | CRA: Expenses you can claimChecked 28 Oct 2026 |
| Employee limit | No more than the employment income left after other employment expenses; the rest carries forward against income from the same employer. Commission employees: the claim can't exceed commission income (applied here, after other employment expenses). | CRA: Expenses you can claim, limitationsChecked 31 Oct 2026 |
| Employee forms | Form T777 line 9368 → line 22900 of the return. Form T2200 is kept, not filed. Records for 6 years. | CRA: How to claimChecked 28 Oct 2026 |
| GST/HST rebate | Form GST370, line 45700, if the employer is a GST/HST registrant (not a listed financial institution). The rebate is income on line 10400 in the year received. | CRA: Line 45700Checked 28 Oct 2026 |
| Self-employed conditions and costs | Principal place of business, or used only for the business and regularly to meet clients, customers or patients. Part of heat, electricity, water, home insurance, maintenance and cleaning, property taxes, mortgage interest, rent (and CCA, left out here). Area basis; hours ÷ 24 for a shared space; reduce for part of the week or year. | CRA: Business-use-of-home expensesChecked 28 Oct 2026 |
| Self-employed limit | The lesser of (last year's carry-forward + this year's costs) and net income before the claim; it can't create or increase a loss. The rest carries forward. Form T2125, Part 7, line 9945. | CRA: Calculating business-use-of-home expensesChecked 28 Oct 2026 |
| Tax effect | 2026 brackets below with the basic personal amounts (federal $16,452; BC $13,216; Alberta $22,769), the Canada employment amount, CPP and EI, from our income tax engine. Self-employed: CPP 11.9% on net earnings from $3,500 to $74,600. | CRA 2026 rates, B.C. credits, AlbertaChecked 28 Oct 2026 |
| Taxable income | Rate |
|---|---|
| Up to $58,523 | 14% |
| $58,523 to $117,045 | 20.5% |
| $117,045 to $181,440 | 26% |
| $181,440 to $258,482 | 29% |
| Over $258,482 | 33% |
| Taxable income | Rate |
|---|---|
| Up to $50,363 | 5.6% |
| $50,363 to $100,728 | 7.7% |
| $100,728 to $115,648 | 10.5% |
| $115,648 to $140,430 | 12.29% |
| $140,430 to $190,405 | 14.7% |
| $190,405 to $265,545 | 16.8% |
| Over $265,545 | 20.5% |
| Taxable income | Rate |
|---|---|
| Up to $61,200 | 8% |
| $61,200 to $154,259 | 10% |
| $154,259 to $185,111 | 12% |
| $185,111 to $246,813 | 13% |
| $246,813 to $370,220 | 14% |
| Over $370,220 | 15% |
Brackets: CRA 2026 federal rates, B.C. 2026 rates and Alberta 2026 rates, checked 28 Oct 2026. The same engine runs our income tax calculator. Two assumptions, stated plainly: for self-employed people, home internet is taken at the same work-space share (CRA lists the business part of phone and utilities separately on T2125 line 9220), and a shared space uses hours a week ÷ 168 for both kinds of claimant (CRA's hours a day ÷ 24, reduced for part of the week, gives the same share).
Estimate only, general information, not tax advice. Your situation may differ; book a free 15-minute call before acting. The calculator applies the CRA's work-space-share method and the 2026 federal, BC and Alberta rates from our income tax engine. It caps a commission employee's claim at the commission income entered, and leaves out capital cost allowance on the home, office supplies and cellphone costs claimed separately on Form T777, the GST/HST rebate amount, other deductions and credits, other provinces, and the rules for people who work through their own corporation.
Your 2026 home office claim, line by line
The work-space share, each home cost and whether it counts, the limit, what carries forward and the tax it saves, with the CRA line number for the claim and a sentence on why each figure is there. It follows every change you make above.
| Line | Amount |
|---|---|
| Work-space share | |
| Work space ÷ finished area12 ÷ 120. All finished areas count, including hallways, bathrooms and the kitchen. | 10% |
| Months worked from home12 of 12: the whole year's costs count. | 12 |
| Share of your home used for workApplied to the eligible costs below. | 10% |
| Eligible home costs | |
| Electricity, heat and waterAll employees can claim the work-space share. | $2,400 |
| Home internet access feesThe monthly plan counts; connection fees and modem rental don't. | $900 |
| Maintenance and minor repairsFor the whole home, so the work-space share applies. | $300 |
| Eligible costsBefore the share. | $3,600 |
| Your deduction | |
| Work-space share of eligible costs10% of $3,600. | $360 |
| Limit: employment income left after other employment expenses$70,000. The claim can't create an employment loss. | $70,000 |
| Deduction for 2026Form T777, line 9368, carried to line 22900 of your return. | $360 |
| Carried forward to 2027Nothing: the whole amount fits under the limit. | $0 |
| Tax effect (estimate) | |
| 2026 income tax without the deductionFederal and BC tax on your income, from our 2026 engine. | $10,572.03 |
| 2026 income tax with the deductionThe same, with $360 less taxable income. | $10,470.51 |
| Federal tax reducedAt 20.5%, your federal bracket. | $73.80 |
| BC tax reducedAt 7.7%, your BC bracket. | $27.72 |
| Estimated tax reductionYour marginal rate of 28.2% × $360. CPP and EI don't change for an employee. | $101.52 |
What this means
- You can deduct $360 on your 2026 return as long as your employer signed a T2200 and you met the work-space test: more than 50% of the time at home for at least four consecutive weeks, or a space used only for work where you regularly meet clients.
- The deduction lowers the income you're taxed on, so the tax effect is roughly your marginal rate times the deduction: about $102 at 28.2%.
- Insurance, property tax and mortgage interest weren't entered; salaried employees can't claim them anyway.
What to do next
- Get Form T2200 signed by your employer and keep it; you don't send it with your return.
- Fill in Form T777: the work-space share goes on line 9368 and carries to line 22900 of your return.
- Ask about the GST/HST rebate: eligible employees may claim a GST/HST rebate using Form GST370, subject to employer, expense and other eligibility conditions. It is claimed on line 45700.
- Keep the bills, your measurements and a photo of the space for six years.
- Want your return handled? Personal tax preparation includes employment expenses when your records support them.
Want your return done for you? See the personal membership.
Key figures for 2026
The rules for home office expenses in the 2026 tax year (returns filed in 2027), for employees and self-employed people in BC and Alberta.
| Figure | Rule | Source, checked |
|---|---|---|
| Work-space share | Area of the work space ÷ finished area of the home (hallways, bathrooms and kitchen included). Example: 12 m² ÷ 120 m² = 10%. | CRA, Determine your work space use; 28 Oct 2026 |
| Shared space | Multiply the area share by hours worked there ÷ 168 hours a week. Example: 12% × 40 ÷ 168 = 2.86%. | CRA, Determine your work space use; 28 Oct 2026 |
| Flat rate method | Ended after the 2022 tax year. No $2 a day for 2026; employees use the detailed method with Form T2200. | CRA, What the changes are; 28 Oct 2026 |
| Employee work-space test | More than 50% of the time at home for at least four consecutive weeks, or a space used only for work and regularly for in-person meetings with clients or customers. | CRA, Eligibility criteria, detailed method; 28 Oct 2026 |
| Employee costs | Rent, electricity, heat, water, utilities part of condo fees, internet access fees, maintenance and minor repairs. Commission employees add home insurance and property taxes. Never mortgage interest or principal. | CRA, Expenses you can claim; 28 Oct 2026 |
| Employee limit and forms | No more than employment income after other employment expenses; the rest carries forward against the same employer. Form T777 line 9368 → line 22900. GST/HST rebate on Form GST370, line 45700. | CRA, Expenses you can claim; How to claim; Line 45700; 28 Oct 2026 |
| Self-employed test | Principal place of business, or used only for the business and on a regular and ongoing basis to meet clients, customers or patients. | CRA, Business-use-of-home expenses; 28 Oct 2026 |
| Self-employed costs and limit | Heat, electricity, water, insurance, maintenance and cleaning, property taxes, mortgage interest, rent (CCA allowed but risky). The lesser of carry-forward + costs and net income before the claim; the rest carries forward. Form T2125, Part 7, line 9945. | CRA, Business-use-of-home expenses; Calculating business-use-of-home expenses; 28 Oct 2026 |
| Tax effect | Roughly your marginal rate × the deduction: 14% to 33% federal plus 5.6% to 20.5% in BC or 8% to 15% in Alberta. Self-employed people also reduce CPP (11.9% between $3,500 and $74,600). | CRA, gov.bc.ca, alberta.ca 2026 rates; CRA CPP rates; 28 Oct 2026 |
How it's calculated
The steps follow the CRA's pages on home office expenses for employees and business-use-of-home expenses for the self-employed, and Form T777 or Form T2125, Part 7.
- Measure. The area of your work space divided by the finished area of your home gives the area share. Hallways, bathrooms and the kitchen count towards the home; in an open-plan room, use a reasonable part, not the whole room.
- Shared or designated. A room used only for work keeps the full area share. A shared area, such as a kitchen table, is multiplied by the hours you work there divided by 168 hours in a week: 40 hours gives 23.8%.
- Months. Only the costs for the period you qualified count, so yearly costs are scaled by the months you worked from home.
- Eligible costs. The lines that count depend on who you are: a salaried employee, a commission employee or a self-employed person (the table below). Costs that don't count for you are left out and flagged. Employees add repairs made to the work space itself in full.
- The share. Eligible costs × share × months ÷ 12, plus any amount carried forward from 2025.
- The limit. Employees: no more than the employment income left from that employer after other employment expenses. Self-employed: no more than net business income before the claim. Anything over the limit is carried forward to 2027.
- Tax effect. Your 2026 income tax is worked out with the same engine as our income tax calculator, once without the deduction and once with it. For self-employed people, the lower net earnings also mean less CPP, which is shown separately.
Three worked examples for 2026
Example 1: an employee in Coquitlam with a spare room
You own a 120 m² home in Coquitlam and your employer required you to work from home all of 2026, in a 12 m² room used only for work. Your employer signed a T2200. That's 12 ÷ 120 = 10%. For the year you paid $2,400 for electricity, heat and water, $900 for internet and $300 for minor repairs: $3,600 of eligible costs. Mortgage interest, insurance and property tax don't count for a salaried employee. Your deduction is 10% of $3,600 = $360, on Form T777, line 22900.
| Line | Amount |
|---|---|
| Work space ÷ home | 12 ÷ 120 = 10% |
| Electricity, heat and water | $2,400 |
| Home internet access fees | $900 |
| Maintenance and minor repairs | $300 |
| Eligible costs | $3,600 |
| Deduction (10%) | $360 |
| Estimated tax reduction at $70,000 of salary in BC (28.2%) | $102 |
On a $70,000 salary in BC, the $360 comes off income taxed at 20.5% federal and 7.7% BC, so your 2026 income tax falls by about $102 ($73.80 federal and $27.72 BC). Eligible employees may claim a GST/HST rebate using Form GST370, subject to employer, expense and other eligibility conditions.
Example 2: an employee in Edmonton working at the kitchen table
You rent a 100 m² apartment in Edmonton and your employer requires you to work from home full time. You work 40 hours a week at the dining table, in an area of 12 m² that's also where you eat: a shared space. The area share is 12%, and the time share is 40 ÷ 168 = 23.8%, so the work share is 12% × 23.8% = 2.86%. Rent of $21,600, utilities of $1,800 and internet of $1,000 come to $24,400; 2.86% of that is $697.
| Line | Amount |
|---|---|
| Area share | 12 ÷ 100 = 12% |
| Time share | 40 ÷ 168 = 23.8% |
| Work share | 2.86% |
| Rent, utilities and internet | $24,400 |
| Deduction (2.86%) | $697 |
| Estimated tax reduction at $62,000 of salary in Alberta | $203 |
On a $62,000 salary in Alberta, the deduction reduces 2026 income tax by about $203: the first part comes off the 10% Alberta bracket and the rest off the 8% bracket, with 20.5% federal throughout. The CRA's own example on its work-space page uses the same 12% × 40 ÷ 168 method.
Example 3: a self-employed bookkeeper in Surrey
You own a 2,000 sq ft home in Surrey and use a 200 sq ft room only for your bookkeeping business, where you work and meet clients: 10%. For 2026 you paid $15,000 of mortgage interest, $3,500 of property tax, $1,500 of home insurance, $3,000 of utilities and $1,000 of maintenance: $24,000. Your net business income before the claim is $65,000, so the whole $2,400 is allowed on Form T2125, Part 7, line 9945. You don't claim CCA on the house.
| Line | Amount |
|---|---|
| Work space ÷ home | 200 ÷ 2,000 = 10% |
| Mortgage interest, property tax, insurance, utilities, maintenance | $24,000 |
| Business-use-of-home claim (10%) | $2,400 |
| Limit: net business income before the claim | $65,000 |
| Estimated income tax reduction in BC, calculated by comparing tax before and after the deduction | $605 |
| CPP reduction (11.9% of $2,400) | $286 |
| Estimated total reduction | $891 |
Because the claim lowers net self-employment earnings, it reduces both income tax (about $605) and CPP ($286). Had the business made only $1,000 before the claim, just $1,000 would be allowed and the other $1,400 would carry forward to 2027. The CRA's own Part 7 example works the same way: 18 of 180 m² of $13,300 is $1,330, plus $150 carried forward, all $1,480 allowed against $7,100 of net income.
What you can claim, by who you are
The work-space share applies to the costs below. Who you are decides which lines count. Keep the bills: the CRA can ask for them.
| Cost | Salaried employee | Commission employee | Self-employed |
|---|---|---|---|
| Rent | Yes | Yes | Yes |
| Electricity, heat, water; utilities part of condo fees | Yes | Yes | Yes |
| Home internet access fees | Yes | Yes | Yes, as the business share of phone and utilities |
| Maintenance and minor repairs | Yes | Yes | Yes, including cleaning materials |
| Home insurance | No | Yes | Yes |
| Property tax | No | Yes | Yes |
| Mortgage interest | No | No | Yes (never the principal) |
| Capital cost allowance on the home | No | No | Allowed, but it can affect the principal residence exemption; left out here |
| Furniture, computers, renovations | No | No (equipment leases: yes) | Not here; equipment is CCA on Form T2125 |
Sources: CRA, Expenses you can claim (employees) and Business-use-of-home expenses (self-employed), checked 28 Oct 2026.
Employees: the conditions
You need all of these for 2026:
- Required to work from home. A written or verbal agreement is enough, and a formal telework arrangement you chose counts.
- The work-space test. You worked there more than 50% of the time for at least four consecutive weeks, or you use the space only for work and regularly meet clients, customers or others there in person.
- You paid the costs and they were used directly in your work. Nothing reimbursed counts.
- A completed and signed Form T2200 from your employer. Keep it; you don't send it in.
Claim on Form T777 (line 9368 → line 22900). Eligible employees may claim a GST/HST rebate using Form GST370, subject to employer, expense and other eligibility conditions. The rebate is claimed on line 45700 and is income in the year you receive it.
Self-employed: the conditions
Your home work space must be one of these:
- Your principal place of business, or
- Used only to earn business income, and on a regular and ongoing basis to meet clients, customers or patients.
Work out the share on a reasonable basis, usually area; for a space also used for living, multiply by the hours a day it's used for business ÷ 24, and reduce the claim if you run the business only part of the week or year. The claim can't create or increase a loss: anything over your net income before it carries forward to 2027. Claim it on Form T2125, Part 7, line 9945. CCA on the home is allowed, but claiming it can mean part of the gain when you sell is no longer covered by the principal residence exemption, so most people leave it out.
Work through your own corporation? The employee rules apply to you, with a T2200 from the corporation; see the guide. Corporate arrangements are general information, not legal advice; we work alongside your lawyer.
Who this is for and what it leaves out
Who this is for
- Employees in BC or Alberta who were required to work from home in 2026 and have, or can get, a signed Form T2200: salaried and commission.
- Sole proprietors and freelancers who run the business from home and file Form T2125: consultants, bookkeepers, designers, online sellers, tutors and trades.
- Anyone wondering whether a kitchen table counts, what happens when the costs are more than the income, and roughly what the deduction is worth.
What it leaves out
- Capital cost allowance on your home, and the capital gain and recapture rules that follow it.
- Which way to claim when commissions are low: the calculator shows the salaried-employee figure beside the commission one, but the choice is yours to confirm with us.
- Office supplies, cellphone plans and other employment expenses on Form T777, the GST/HST rebate amount, and two people sharing one work space.
- Other provinces, other deductions and credits (use the income tax calculator), and businesses run through a corporation.
Sources, checked 28 Oct 2026; the commission-income limit re-checked 31 Oct 2026
- CRA: Home office expenses for employees
- CRA: What the changes are (the flat rate ended after 2022)
- CRA: Eligibility criteria, detailed method
- CRA: Determine your work space use
- CRA: Expenses you can claim
- CRA: Calculate your expenses
- CRA: How to claim
- CRA: Form T777, Statement of Employment Expenses
- CRA: Form T2200, Declaration of Conditions of Employment
- CRA: Line 45700, Employee and partner GST/HST rebate (Form GST370)
- CRA: Business-use-of-home expenses
- CRA: Calculating business-use-of-home expenses (example)
- CRA: 2026 tax rates and income brackets
- B.C.: personal income tax rates
- Alberta: personal income tax
Working from home? Talk it through.
Book a free 15-minute call by video or phone. We'll look at whether you qualify, how you measured the space, which costs count for you and what your records show, reviewed against your facts. Employees: see the personal membership. Self-employed: pricing is explained on the business membership page. We confirm your price before any work starts.
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Home office deductions, answered
How is the home office deduction calculated for 2026?
Measure the area you work in and divide it by the finished area of your home, including hallways, bathrooms and the kitchen. A 12 m² room in a 120 m² home is 10%. If the space is also used for living, such as a kitchen table, multiply by the hours you work there divided by 168 hours in a week. That share of your eligible home costs for the period you worked from home is the deduction: 10% of $3,600 is $360.
Can I still claim the $2 a day flat rate for working from home?
No. The temporary flat rate method only applied to 2020, 2021 and 2022. For 2023 and later years, including your 2026 return, employees use the detailed method: the work-space share of the actual costs you paid, backed by receipts and a Form T2200 signed by your employer.
Who can claim home office expenses as an employee in 2026?
You must have been required to work from home (a written or verbal agreement counts, including a formal telework arrangement you chose), paid the costs yourself without reimbursement, and have a completed and signed Form T2200. Your work space must also pass one test: you worked there more than 50% of the time for at least four consecutive weeks, or you use it only for work and regularly meet clients or customers there in person.
What home costs can an employee claim, and what is left out?
All employees can 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 also claim home insurance and property taxes. Nobody who is an employee can claim mortgage interest, mortgage principal, internet connection fees, furniture or capital costs such as a new furnace or flooring.
What can self-employed people claim for a home office?
If the work space is your principal place of business, or you use it only for the business and regularly meet clients, customers or patients there, you can claim the business share of heat, electricity, water, home insurance, maintenance and cleaning, property taxes, mortgage interest (not principal) and rent on Form T2125, Part 7, line 9945. Capital cost allowance on the home is allowed but usually avoided, because it can affect the principal residence exemption when you sell.
What if my home office costs are more than my income?
The claim can't create or increase a loss. Employees can deduct no more than the employment income left from that employer after other employment expenses; the rest carries forward to a year with income from the same employer. Self-employed people can deduct no more than their net business income before the claim; the rest carries forward to the next year under the same conditions.
How much tax does the home office deduction reduce?
Roughly your marginal tax rate times the deduction, because it reduces the income you're taxed on. A $360 deduction for someone earning $70,000 in BC in 2026 reduces income tax by about $102 (28.2%). Self-employed people also pay less CPP, because the deduction lowers their net self-employment earnings. The calculator works out your 2026 tax with and without the deduction.
Can employees get the GST back on their home office costs?
Eligible employees may claim a GST/HST rebate using Form GST370, subject to employer, expense and other eligibility conditions. If your employer is registered for GST/HST (and isn't a listed financial institution), you can apply for the employee GST/HST rebate on Form GST370 for the GST or HST included in the expenses you deducted, and claim it on line 45700 of your return. The rebate counts as income on line 10400 in the year you receive it. It covers only costs that had GST or HST on them.
Is anything I type stored or sent anywhere?
Only if you ask for the full breakdown. The calculator works in your browser, and the summary (your deduction, work-space share, eligible costs and the tax it saves) needs nothing from you. If you add your name and email to open the full breakdown, we save them with the numbers you entered and the results, in our database in Canada, so our team can reply; the privacy policy says how long we keep them and how to ask us to delete them. Never type a SIN or account number.