Deductions for Commission Employees: Expense Claims for Salespeople with a T2200 — CPA Firm Near You, Montreal

Introduction

Salespeople in Quebec — including real estate brokers, auto sales representatives, pharmaceutical reps, and B2B account managers — often incur significant expenses while earning commission income. CRA and Revenu Québec allow commission employees to claim a wider range of deductions than regular employees, but only when supported by a properly completed T2200 form. Poor documentation or misunderstandings often lead to denied deductions and reassessments. This guide explains what commission employees can deduct and how a CPA firm near you in Montreal can help prepare audit-proof claims.

Legal and Regulatory Framework

Under the Income Tax Act and the Taxation Act of Quebec, commission employees may deduct certain expenses if they:
• Earn employment income primarily from commissions
• Pay their own expenses under their employment contract
• Work away from their employer’s place of business
• Have a signed T2200 Declaration of Conditions of Employment

Deductible expenses include:
• Vehicle expenses (fuel, maintenance, insurance, parking, leasing, CCA)
• Travel and lodging for business trips
• Meal and entertainment expenses (50% rule)
• Advertising and promotional costs
• Office supplies
• Postage, printing, client gifts (taxable rules apply)
• Computer and cellphone expenses
• Work-from-home costs — including mortgage interest and property taxes (allowed for commission employees only)
• Professional dues

GST/QST may be creditable or refundable depending on reimbursement and employment terms.

Key Court Decisions

Courts have ruled that:
• Mileage logs are required — estimates are not accepted
• Commission employees cannot claim expenses reimbursed by employers
• Business meals must include the name of the client and purpose
• Property taxes and mortgage interest are allowed only when home-office rules are met and the T2200 supports at-home work
• Clothing is not deductible unless it is safety gear or required uniform
• Deductions may be denied if the T2200 is incomplete or contradictory

Judges emphasize documentation and consistency between contracts, T2200 forms, and actual work duties.

Why CRA and Revenu Québec Target Commission Employees

Audits are frequent because:
• Vehicle deductions are often overstated
• Home-office claims lack exclusive-use documentation
• Meal and entertainment expenses are poorly documented
• Employers complete T2200 forms incorrectly
• Employees mix personal and business costs
• Commission income does not match CRM or dealer statements
• GST/QST credits are improperly claimed

Auditors compare bank statements, meeting logs, emails, CRM activity, sales targets, and expense receipts.

Mackisen Strategy

At Mackisen CPA Montreal, we help commission employees prepare compliant, optimized deduction claims. We:
• Ensure the T2200 is completed correctly
• Build mileage logs and travel documentation
• Categorize deductible vs non-deductible expenses
• Prepare home-office calculations
• Analyze employer reimbursements
• Create audit-ready expense packages
• Prepare personal tax returns reflecting commission rules
• Support workers during CRA and RQ audits

Real Client Experience

A Montreal automotive rep claimed 80 percent of vehicle expenses but had no mileage log. CRA denied the claim. We rebuilt mileage based on appointments and CRM entries, restoring a majority of the deduction. Another salesperson claimed home-office deductions without a T2200; we corrected submissions and prevented future non-compliance.

Common Questions

Why is a T2200 required?

Because it proves the employee is contractually obligated to pay expenses personally.

Can I claim mortgage interest as a commission employee?

Yes, if you meet home-office criteria and have a proper T2200.

Are client meals deductible?

Yes, up to 50%, with detailed receipts and business purpose.

Can I deduct clothing?

Only if it is protective or mandated as a uniform.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps commission employees maximize deductions while maintaining compliance. Whether you are in real estate, insurance, auto sales, or B2B services, our expert team ensures precision, documentation, and audit protection.