Home office expenses: comparative between employees and self-employed individuals

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Home office expenses: comparative between employees and self-employed individuals

Dec 16, 2022 by System

Due to the pandemic, home office expenses have become the hot topic in taxation. Many people were required to work from home, and others started side gigs to make ends meet. Read on to find out what you can claim as home office expenses if you’re an employee or self-employed.

Similarities between employees and self-employed individuals

Whether you are claiming home office expenses as an employee or as a self-employed person, the basic eligibility criteria are the same. To claim these expenses, your work space at home must meet one of the following conditions:

The work space is where you mainly (more than 50% of the time) do your work.
You use the work space only to earn your employment income. You also have to use it on a regular and continuous basis for meeting clients, customers, or other people in the course of your employment duties.

All expenses must be prorated based on the area that your home office represents relative to your entire home. For example, if your home office represents 10% of the total square footage of your home, you can only claim 10% of the eligible expenses.

More expenses are allowed if you are self-employed

As a rule, a self-employed individual can claim more expenses than an employee. For example, employees cannot claim expenses related to home ownership, such as mortgage interest and depreciation, but self-employed individuals can claim them. Computer accessories (monitor, mouse, keyboard, headset, etc.) and furniture (desk, chair) are other expenses which employees cannot claim.

There are also differences between salaried and commission employees. For example, a commission employee can claim home insurance and property taxes, but a salaried employee cannot.

Below is a handy table that compares the expenses you can claim as an employee or a self-employed individual.

Expense	Salaried employee	Commission employee	Self-employed
Heat	Yes	Yes	Yes
Electricity	Yes	Yes	Yes
Insurance	No	Yes	Yes
Maintenance	Yes	Yes	Yes
Mortgage interest	No	No	Yes
Property taxes	No	Yes	Yes
Rent	Yes	Yes	Yes
Depreciation	No	No	Yes
Internet access fees	Yes	Yes	Yes
Cell phone fees	Yes	Yes	Yes
Computer accessories*	No	No	Yes
Furniture*	No	No	Yes

* For self-employed individuals, these expenses would be claimed under depreciation.

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UFile's tax expert Gerry Vittoratos
Presented by UFile's tax expert
Gerry Vittoratos
CPA Tax & Accounting