Individual employees who are involved with the selling of property or the negotiating of contracts are permitted to deduct all expenses that can be considered necessary to the performance of their duties. In order for a salesperson to be eligible to deduct these expenses, the sales person must meet the following:
- The salesperson must be required to pay his own expenses. The employer must sign Form T2200 certifying that this is the case.
- The salesperson must be ordinarily required to carry on his duties away from the employer’s place of business
- The salesperson must not be in receipt of an expense allowance that was not included in income
- The salesperson must receive at least part of his remuneration in the form of commissions or by reference to the volume of sales
The items that the salesperson can deduct include:
- Advertising and promotion
- Meals and entertainment (50%)
- Lodging
- Motor vehicle cost
- Parking
- Work space in the home costs (maintenance, property taxes and insurance)
- Supplies
- Licenses
- Bonding and liability insurance premiums
- Salary to assistant or substitute
- Office rent
- Training costs
- Transportation costs
- Computers and office equipment (lease only)
Note that the maximum amount that can be deducted is limited to the person’s commissions received during the year. Also, in order for the sales person to deduct 50% of the cost for meal and entertainment, the salesperson must be away from municipality or metropolitan area where the employer’s establishment is located for at least 12 hours.