Employees and commission earners: 10 tax questions
Understand T2200 conditions, commission expenses, vehicle reimbursements, dues, tips and EI benefits. Practical Canadian tax answers for employees.
Request a quote →Arsen Accounting Services · Sources checked October 28, 2026
Employees and independent contractors use different tax rules. Start with your working arrangement, then separate eligible expenses from personal costs and reimbursements.
Browse all 100 Canadian tax articles →
Read the full article and document checklist →
11. Does receiving a T4A prove that I am self-employed?
No. A slip or contract label does not replace the facts of the working relationship. Control, equipment, financial risk and the opportunity for profit are among the considerations. An employee and a self-employed worker have different expense and contribution rules. If the status is uncertain, CRA has a CPP/EI ruling process; changing the label on a return is not a substitute for resolving the facts.
First step: Bring the contract and explain who sets your hours, supplies tools, pays expenses and bears losses.
Official guidance: Employment status: Employee or self-employed
Read the full article and document checklist →
12. Does a signed T2200 make every work expense deductible?
No. It documents employment conditions; you still need an eligible expense, an unreimbursed cost where required and supporting records. The employer’s certification is not approval of every item on your claim. Your preparer must match the expenses to the rules for your work arrangement, rather than enter a single total from a spreadsheet without checking its contents.
First step: Get the completed T2200 and separate your receipts into vehicle, supplies, travel and other categories.
Official guidance: Employers' Guide – Taxable Benefits and Allowances
Read the full article and document checklist →
13. Can a commissioned employee deduct more expenses than commissions earned?
There is generally a commission-income limit on the relevant commission-employee expenses, with exceptions for vehicle interest and capital cost allowance. In some circumstances, claiming under the narrower salaried-employee rules can produce a different result. The method must meet its own conditions. Being paid partly by commission does not make all sales-related spending deductible without restriction.
First step: Provide your T4, T2200, commission breakdown and separate vehicle-interest and asset records so both approaches can be reviewed.
Official guidance: Line 22900 – Other employment expenses
Read the full article and document checklist →
14. Can I claim vehicle costs that my employer reimbursed?
You generally cannot also deduct expenses your employer repaid. A non-taxable reasonable allowance can also affect entitlement to a claim. A taxable allowance may have different treatment, but it does not remove the need to satisfy the employment-expense conditions. Distinguish reimbursements of actual costs from flat allowances and per-kilometre payments.
First step: Bring your employer’s mileage policy, reimbursement statements and T4 alongside your travel log.
Official guidance: Employment Expenses 2025 · Automobile or motor vehicle benefits – Allowances or reimbursements provided to an employee for the use of their own vehicle
Read the full article and document checklist →
15. Is driving from home to my regular workplace deductible?
Ordinary travel between home and a regular workplace is generally personal commuting. Driving to a customer, temporary location or other point of call can require a different analysis. Having a long commute, carrying a phone or being on call does not automatically turn the journey into business travel. Review the actual locations and purpose of each trip.
First step: Mark regular commuting separately from customer visits in your mileage records.
Official guidance: Employers' Guide – Taxable Benefits and Allowances
Read the full article and document checklist →
16. Can an employee deduct work clothes and tools?
Most clothing and tools are not deductible employment expenses simply because you use them at work. Specific rules can permit eligible tradesperson or apprentice-mechanic tool claims, subject to their conditions and limits. Do not apply a business-owner expense rule to an employee’s return. Uniform requirements and the nature of a tool need to be considered separately.
First step: Bring itemized receipts, job details and employer certification for any potentially eligible tool claim.
Official guidance: Employment Expenses 2025 · Employers' Guide – Taxable Benefits and Allowances
Read the full article and document checklist →
17. Can I claim professional dues that do not appear on my T4?
Eligible employment-related annual union or professional dues may be claimed with appropriate support, even if the T4 does not show them. Required professional or malpractice liability premiums can also qualify under the applicable rules. Initiation fees and special assessments are not treated like ordinary annual dues. Check whether the amount was reimbursed and avoid claiming a receipt again when it is already included on the slip.
First step: Reconcile membership receipts to T4 box 44 and identify what each payment covers.
Official guidance: Line 21200 – Annual union, professional, or like dues
Read the full article and document checklist →
18. Do I report cash tips that are not on my T4?
Yes. Employment tips are income even when a customer pays them directly and the employer does not include them on a T4. Controlled tips, direct tips and Quebec declared tips have different CPP/EI treatment. The absence of a slip does not make the income tax-free. Keep enough detail to reconcile the amount rather than relying on a year-end guess.
First step: Summarize tips by month and identify which amounts your employer already reported.
Official guidance: Tips and Gratuities · Line 10100 – Employment income
Read the full article and document checklist →
19. Why can working two jobs leave me owing tax?
Each employer calculates payroll deductions using the information it has. Claiming the same personal credits on more than one TD1 can leave too little tax withheld when your combined income exceeds those credits. Review the multiple-employer section and consider whether extra withholding is appropriate. Separately, excess employee CPP contributions may be reconciled on the return; that does not necessarily eliminate an income-tax balance.
First step: Bring both T4s and review your TD1 forms with payroll before the next pay cycle.
Official guidance: Get the completed TD1 forms from the individual · Starting to work – Learn about your taxes · About the deduction of Canada Pension Plan (CPP) contribution – Calculate payroll deductions and contributions
Read the full article and document checklist →
20. Are maternity or parental EI benefits tax-free?
No. EI benefits are taxable income, including maternity and parental benefits. The tax withheld is a payment toward your final liability, not a guarantee that nothing more is due. Special benefits have different repayment rules from regular EI benefits. On the return, certain benefit amounts appear in an additional reporting line but must not be added to total income twice.
First step: Provide the T4E, any repayment information and employment income received in the same year.
Official guidance: EI and repayment of benefits at income tax time · Line 11905 – Employment insurance maternity and parental benefits, and provincial parental insurance plan benefits
Related guides
General information, not an individual tax or legal opinion. Eligibility, elections and deadlines depend on the facts and tax year. Annual CRA forms may describe a specific year; use the form and limits for your return. No particular deduction, refund or tax saving is guaranteed.
Let's discuss your tax needs.
Tell us the tax years, province and filing needs. Prepare a short quote inquiry or contact us directly to discuss availability and scope.
Email: elena@arsenaccounting.com
Phone: (647) 297-4126
Before you send
Please provide a brief description of the assistance you need. Do not email SINs, passwords, banking details or sensitive tax documents in your initial inquiry. We'll discuss an appropriate secure method of sharing documents if we proceed.
Information on this website is general and is not individualized tax advice. Engagements are subject to acceptance, agreed scope and applicable terms.