Newly employed? Know your tax deductions   Jul 24th

Most new employees can benefit from an onboarding process that includes information about claiming reimbursements for out-of-pocket expenses, pension contributions, or how to deduct unreimbursed costs. Here’s a primer to share.

A tax credit for every employee

A non-refundable tax credit is available for all people who report employment income. It’s called the Canada Employment Amount and it’s claimable without receipts to reduce taxes payable. It covers the costs of travelling to and from work, or other personal costs of working, like buying lunches, new shoes, dry cleaning and so on.

For 2026 the maximum claim is $1,501 on the federal tax return.  

Also read

Income Tax Guide for Canadians
Deadlines, tax tips and more

read now

What tax forms are needed?

Employees who incur additional expenses out of pocket as a condition of their employment contract will need additional forms:

The employer must confirm those employment conditions on Form T2200 Declaration of Conditions of Employment, which can now include an electronic signature…