--- title: "Business-Use-of-Home Expenses for Corporations: CRA Rules" url: https://www.everstonecpa.com/blog/home-office-deduction-corporation-canada description: "Can your corporation pay for your home office? What qualifies for owners — T2200 rules, renting to your corp, and the PSB trap to avoid. Ask a CPA." type: guide updated: 2026-10-08 summary: "As an incorporated owner you are typically an employee of your corporation, so home-office costs are handled either by the corporation reimbursing a reasonable, documented share under an accountable arrangement, or by you claiming home-office employment expenses. That route requires a signed Form T2200 and a workspace that meets the CRA’s use tests, and cannot create a loss." faq_count: 8 publisher: EverStone CPA Inc., a Chartered Professional Accountant firm registered with CPA British Columbia and CPA Alberta service_area: British Columbia, Alberta, Ontario and Manitoba language: en-CA contact: info@everstonecpa.com · https://www.everstonecpa.com/book-online --- [Home](https://www.everstonecpa.com/) [Blog](https://www.everstonecpa.com/blog) Home Office Deductions for Incorporated Owners Home office # Home office deductions for incorporated owners: *what the corporation can and can’t pay for* By EverStone CPA · Reviewed July 2026 · 7 min read “My business runs out of my house — can the corporation just pay for my home office?” Incorporated owners in Maple Ridge and the Fraser Valley ask it often; the answer is yes, but not as most assume. Once incorporated, you are usually an *employee* of your company, which changes the rules. Here is what qualifies. **Quick answer:** As an incorporated owner you are typically an employee of your corporation, so home-office costs are handled either by the corporation reimbursing a reasonable, documented share under an accountable arrangement, or by you claiming home-office employment expenses. That route requires a signed Form [T2200](https://www.everstonecpa.com/glossary#t2200) and a workspace that meets the CRA’s use tests, and cannot create a loss. Renting space to your corporation is possible but must be reasonable, and you should not claim [capital cost allowance](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/report-business-income-expenses/claiming-capital-cost-allowance.html) on your home. Single-client consultants should check personal-services-business risk first. Home business tax deductions for an incorporated owner run through the corporation, not the personal return. Whether the corporation reimburses you or pays you rent decides how it is taxed at both ends. [Ask which fits your set-up](https://www.everstonecpa.com/quick-question). Two legitimate routes — pick one deliberately. ## Employee of your own corporation vs sole proprietor A **sole proprietor** deducts these costs against business income if the space is the main place of business, or used only for business and regularly for client meetings. The claim cannot create a loss but carries forward. Vehicles: see [the company car taxable benefit](https://www.everstonecpa.com/blog/company-car-taxable-benefit-canada). For a sole proprietor, the business-use-of-home expenses CRA allows are deducted against business income; an incorporated owner follows the stricter employment rules set out next. An **incorporated owner is an employee**, so the home office is an *employment* expense. To claim it personally, you must be required to keep the workspace, hold a signed **Form T2200**, and either work there mainly (more than half the time) or use it only for work and regularly for in-person client meetings. The claim cannot exceed your remaining employment income. Related: [Bookkeeping that keeps the home-office claim documented](https://www.everstonecpa.com/accounting-services). ## Reasonable rent-to-corporation arrangements Alternatively, the corporation can **reimburse** a reasonable, documented share of home costs under an accountable plan, often the cleanest route. Or you **rent** part of the home to it: it deducts the rent, and you report rental income, offsetting related costs. Two cautions: The rent must be *reasonable*, reflecting the space and fair value. And you should generally **not claim [capital cost allowance](https://www.everstonecpa.com/blog/capital-cost-allowance-cca-classes-canada) on your home**, as it can compromise the principal-residence exemption on sale. Structure these arrangements with an accountant. **Incorporated and working from home?** We set up the home-office claim the right way for your corporation, keep the books from $325 a month and prepare the T2 at a fee quoted in writing. See [our corporate tax work](https://www.everstonecpa.com/tax-services), or [get a year-end quote](https://www.everstonecpa.com/book-online?service=monthly#enquiry-form). [Get My Fixed Quote](https://www.everstonecpa.com/book-online?service=monthly#enquiry-form) ## Home office tax deduction: which expenses qualify Either way, only the **business-use portion** counts, usually by floor area. That covers a share of heat, electricity, insurance, maintenance and, depending on the arrangement, rent or mortgage interest and property tax. Personal use never qualifies, and costs the corporation reimbursed cannot be claimed again. Keep the split defensible and consistent. ## The PSB overlay for single-client consultants If your corporation mainly provides *your* services to one client you would otherwise work for as an employee, it may be a **[personal services business](https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4012.html) (PSB)**, which loses most deductions and pays a higher rate, a bigger risk than any home-office claim. See [personal services business rules in Canada](https://www.everstonecpa.com/blog/personal-services-business-psb-risk-canada) for the tests. The CCA caution is a change-in-use issue: claiming CCA, making structural changes or using a large share of the home can make that part income-producing property. See [the change in use rules for property](https://www.everstonecpa.com/blog/change-in-use-rules-property-canada). ## Records the CRA asks for Keep a signed T2200 for an employment claim, the business-use calculation, and receipts; if you rent to the corporation, a written agreement and rent records. File them with your [personal tax](https://www.everstonecpa.com/personal-taxes) records; in a CRA review, they decide whether the deduction stands. The same applies to [cellphone and internet costs the corporation pays](https://www.everstonecpa.com/blog/business-use-of-cellphone-internet-canada), with their own benefit rules. Those records are what back up the home business expenses CRA may ask about, whichever route the corporation uses. However the arrangement is structured, the corporation only gets the deduction if the payment is supported. The guide to [owner reimbursements and what the CRA expects](https://www.everstonecpa.com/blog/petty-cash-and-owner-reimbursements-canada) covers the documentation side. ## The bottom line Yes, your corporation can pay for your home office, on the CRA’s terms: a T2200, a reasonable split, and care with rent and CCA. A [Maple Ridge small business accountant](https://www.everstonecpa.com/accountant-maple-ridge) can set it up and avoid the principal-residence and PSB traps. Sources - [Canada Revenue Agency — Home office expenses for employees](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/work-space-home-expenses.html) - [Canada Revenue Agency — Form T2200, Declaration of Conditions of Employment](https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t2200.html) This article is general information for Canadian business owners and is current as of July 2026. It is not tax advice, and your situation is unique, so please [speak with a CPA](https://www.everstonecpa.com/book-online?service=monthly#enquiry-form) before acting on anything here. About this article **EverStone CPA** Prepared and reviewed by a CPA at EverStone CPA, serving businesses in BC, Alberta, Ontario and Manitoba. [About the firm →](https://www.everstonecpa.com/about) · [Send an enquiry →](https://www.everstonecpa.com/book-online?service=monthly#enquiry-form) Working through this locally? We advise owners on it as a [CPA for Abbotsford owners](https://www.everstonecpa.com/accountant-abbotsford). ### Keep reading [Accountant in Maple Ridge →](https://www.everstonecpa.com/accountant-maple-ridge) [Personal services business rules →](https://www.everstonecpa.com/blog/personal-services-business-psb-risk-canada) [Personal tax (T1) →](https://www.everstonecpa.com/personal-taxes) Common questions ## Frequently asked questions **Can my corporation pay for my home office?** Yes, within limits. As an employee of your corporation, either it reimburses a reasonable, documented share of home costs, or you deduct employment expenses, if you must maintain the workspace, it signs a Form [T2200: Declaration of Conditions of Employment](https://www.everstonecpa.com/forms/t2200), and the space meets the CRA’s use tests. That deduction cannot create a loss. **What are the conditions to deduct a home office as an employee?** You must be required to keep the workspace and hold a signed T2200. The space must be where you mainly work (more than half the time), or be used only for work and regularly for in-person client meetings. The claim cannot exceed remaining employment income. **Can I rent part of my home to my corporation?** Yes, if the rent reflects fair value and the arrangement is documented. The corporation deducts the rent; you report [rental income](https://www.everstonecpa.com/rental-income-tax-return) personally and offset related home costs. Do not claim capital cost allowance on your home, as it can jeopardize your principal-residence exemption. Set this up with an accountant. **Does the home office deduction still work if I have only one client?** Maybe not. If your corporation provides your services to a single client you would otherwise be an employee of, it can be a personal services business (PSB), which loses most deductions and pays a higher tax rate. Then the home office is the least of your concerns, so assess PSB risk first. **Should I claim capital cost allowance on my home?** Generally no. CCA on part of an owner-occupied home can compromise the principal residence exemption for that portion, making part of the eventual gain taxable. The deduction is modest next to that risk, so most accountants keep incorporated owners to operating costs. **How do I work out the business-use percentage?** Usually by floor area: workspace square footage over total finished living space, prorated again for time if the space is shared. Keep the calculation and a measured floor plan on file. **Can the corporation reimburse me and can I also claim the same costs personally?** No. Anything the corporation reimbursed cannot also be claimed as a personal employment expense; that double-claims the same dollar. Pick one route for the year, reimbursement or the T2200 claim, and apply it consistently. Mixing them is a common trigger for a [CRA review](https://www.everstonecpa.com/cra-review-and-audit-support). **What business-use-of-home expenses can I claim?** A reasonable share of heat, electricity, home insurance and maintenance, and, depending on the arrangement, a portion of rent or mortgage interest and property tax. The share follows the business-use percentage of the home, and how it is claimed depends on whether the corporation reimburses you or you claim it as an employee. ## Want the home-office claim done properly? Email us whether the corporation reimburses you or you claim it yourself. A CPA replies by email within one business day with the cleaner arrangement and a fixed fee for the year-end. [Get My Fixed Quote](https://www.everstonecpa.com/book-online?service=monthly#enquiry-form)[Book a Paid Advice Call](https://www.everstonecpa.com/advice-call) ## Have a question about this? Ask free through [the quick-question form](https://www.everstonecpa.com/quick-question); a CPA replies by email within one business day. A 45-minute paid **Advice Call** is $225 plus GST, booked by email and credited to your first invoice if you become a client within 60 days. Want us to take it on? [Send an enquiry](https://www.everstonecpa.com/book-online?service=monthly#enquiry-form). For an incorporated professional the claim is rarely asked in isolation; [the home office beside the two questions it usually arrives with](https://www.everstonecpa.com/blog/langley-incorporated-professionals-psb-home-office-pay) takes it with the pay and personal-services-business questions. [Ask a Free Question](https://www.everstonecpa.com/quick-question) [Book a Paid Advice Call](https://www.everstonecpa.com/advice-call) Email info@everstonecpa.com ★★★★★ “…We switched to him last year for both our personal and small-business taxes — responsive, knowledgeable and quick.” Heather Powers · Google review **Run your own numbers with the free calculators:** [estimate your incorporation savings](https://www.everstonecpa.com/incorporation-calculator) · [run a paycheque calculation](https://www.everstonecpa.com/payroll-deduction-calculator) · [GST/HST calculator](https://www.everstonecpa.com/gst-hst-calculator) [← Holding companies: when they actually make sense](https://www.everstonecpa.com/blog/holding-company-canada-when-it-makes-sense) [Home-office expenses for incorporated business owners →](https://www.everstonecpa.com/blog/home-office-expenses-incorporated-business-canada) More on this subject: [everything for a new business](https://www.everstonecpa.com/starting-a-business-hub). --- Source: https://www.everstonecpa.com/blog/home-office-deduction-corporation-canada Prices: https://www.everstonecpa.com/pricing · Contact: info@everstonecpa.com · https://www.everstonecpa.com/book-online