Are Clothing Purchases Deductible for Commissioned Employees? A Recent Court Case Says No
Many commissioned employees wonder whether they can deduct the cost of clothing they buy for work—especially when their job requires them to look polished and professional. A July 30, 2025 Tax Court of Canada decision offers a helpful reminder of how strict the rules really are.
The Case: Luxury Clothing as a Work Expense
The taxpayer, a sales associate at Holt Renfrew, claimed deductions for luxury clothing purchased between 2016 and 2018. She argued that:
She was required—explicitly or implicitly—to buy high‑end clothing to perform her job.
The clothing was worn only at work.
Items wore out quickly due to fashion changes and regular use.
To deduct employment expenses, including clothing or supplies, an employee must:
Be contractually required to pay for those expenses, and
Have a T2200 form signed by their employer confirming those conditions.
Why the Taxpayer Lost
The Court rejected the claim for several reasons:
No Contractual Requirement: The employer stated clearly that employees were not required to buy clothing beyond what was covered by the company’s clothing allowance. The only expectation was that employees dress clean, fresh, and coordinated—not that they purchase luxury items.
No T2200 Form: Because employees were not expected to incur personal clothing costs, the employer did not issue a T2200, which is essential for claiming employment expenses.
Personal Choice ≠ Legal Obligation: The taxpayer believed that buying fashionable clothing helped her earn more commission. The Court emphasized that a strategic or economic choice is not the same as a legal requirement under the employment contract.
Insufficient Evidence: Even if clothing could be deductible in rare situations—such as when items are consumed quickly due to wear and tear—the taxpayer did not provide enough proof of the expenses.
Result: No deduction allowed.
Key Takeaway
Clothing expenses are almost never deductible for employees, even commissioned ones, unless all of the following are true:
Your employment contract requires you to buy specific clothing.
Your employer signs a T2200 confirming this requirement.
You can fully support the expenses with documentation.
If any of these conditions are missing, the deduction won’t stand up to CRA scrutiny.
The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions in a newsletter such as this, a further review should be done by a qualified professional.
No individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents