Commission and Salary Paid - WFH Full Time

[KimberleeTibando]

I am paid both salary and commission and have worked from home full time since March 2022. Unrelated to COVID, but due to recent disability and the head office not being fully accessible for me. How would I claim the space used in my home and utilities (heat, electricity, internet, and rent)? There are only forms for COVID related or either commission or salary - no split. 

[Geo123]

Hello KimberleeTibando,

Employment expenses - Commission employee

When your job is to sell property or negotiate contracts for your employer, you can deduct certain fees you paid to earn your commissions.

Certain conditions must be met:

‒     You were usually obliged to work elsewhere than at the place of your employer's establishment.

‒     Your income consisted entirely or partially of commissions or similar amounts.

‒     According to your employment contract, you had to pay your own employment expenses.

‒     You keep in your files a copy of the federal T2200 and for Quebec resident the TP-64.

To claim those employment expenses, please follow these steps:

1. On the "Left side menu of the Interview tab", select "Interview setup".

2. On the screen to your right, go to the "Employment and other benefits" group, check the box for "Employment expenses (including T777S)" and click on "Next" at the bottom of the page.

3. Return to the "Left-side menu on the Interview tab" and select the "T4 and employment income". For residents of all provinces except Quebec, select "T4 Income (earned in any province except Quebec)", while for Quebec residents, and choose "T4 and RL-1 (Relevé 1) income earned in Quebec with QPP contributions".

4. On the page that is generated enter the information of your T4 slip and for Quebec RL-1.

5. Return to the "Left side menu on the Interview tab", select "Employment Expenses".

6. On the page on the right entitled "Employment expenses", on this page, choose "T777 Eligible employment expenses of an employee earning commission income", click on plus sign "₊".

7. On the page entitled "Employment expenses" Employee earning commission income" enter all the required information and click "Next" at the bottom of the page.

8. To record your eligible motor vehicle expenses, click on the "Motor vehicle expense" section and enter the relevant information.

9. If you received an "Allowance for your motor vehicle expenses", enter the amount on the line "Motor vehicle expenses (except CCA & interest) ".

10. If you have your office at home, choose the subsection "Home office expenses".

11. On the line "Percentage (%) of home being used for personal purposes " indicate the percentage. Subsequently, you must answer the questions that concern you.

12. If you are a tenant, on the "Office rent" line, enter the annual cost of the rent you paid.

13. If you purchased equipment for your work, enter the cost on the "Other home office expenses - specify" line.

14. If you received an Allowance from your employer, enter the amount in one of the three (3) lines in the "Allowance" subsection.

15. You must complete the subsection "Employment conditions" and answer the questions. For Quebec residents, also click on "Employment conditions - Quebec" and enter the requested information.

Your employment expenses will be entered by the program in federal form T777 and on line 22900 of the federal return. If you are a Quebec resident, the TP-59 form will be generated and the amount will be reported on line 207 of the Quebec return, with the appropriate code displayed on line 206.

NOTE: You must keep a record of all the expenses you incurred. This register must be kept for a period of six (6) years after the end of the tax year, as the CRA (and/or for Quebec residents, the MRQ) may request some of your documents.

For more information, please visit the following links:

For the CRA:

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-22900-other-employment-expenses.html

Revenu Québec:

http://www.revenuquebec.ca/en/online-services/forms-and-publications/current-details/tp-59-v/

[KimberleeTibando]

12. If you are a tenant, on the "Office rent" line, enter the annual cost of the rent you paid.

 

Does this mean the overall rent I paid for my home or if I rented a separate location for my office space?

[Geo123]

Hello KimberleeTibando,

Percentage (%) of home being used for personal purposes  [Enter %   ]
Total home expenses incurred (both business and personal use)

*Office rent [Enter total of the home rent]

[KimberleeTibando]

Thank you for clarifying. That was very helpful. Does the program then calculate that percentage and what is eligible for deduction on its own? 

[Geo123]

Hello KimberleeTibando,

Yes UFile will calculate the percentage.

For expenses specific (ie eligible) to commission employees please refer to :

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-22900-other-employment-expenses/commission-employees.html