Who this is for: Small business owners, including corporations. Employees who plan to claim employment expenses.
I just read this Financial Post article about a recent Tax Court decision on clothing write-offs for an employee at a luxury retailer: https://financialpost.com/personal-finance/taxes/cra-holt-renfrew-saleswoman-battle-wardrobe-deduction
It reminded me of the questions I hear from owners every week: “Can I deduct my clothing expense?” “Do logo shirts count?” “What about uniforms?” Let’s start with owners, then we’ll touch on employees.
Small Business Owners
What usually qualifies
- Protective clothing that keeps people safe on the job. Think steel-toe boots, high-visibility vests, hard hats, and safety gloves.
- True uniforms that are clearly for work only and are required on shift. Think chef coats or conspicuously branded tops that staff must wear.
- Client giveaways with your logo. Branded shirts or hats that you give to prospects or customers as part of advertising or promotion.
What usually does not qualify
Regular streetwear that you or staff simply prefer to wear at work. This includes suits, dresses, polos, and shoes. Even if you say you only wear them at work, the CRA usually treats them as personal expenses.
Myth Buster: If I put a logo on a golf shirt, I can deduct it
The logo alone is not enough.
- If you or your staff wear normal polos with a small logo, treat them as personal.
- If you hand those shirts to customers as swag, record them as advertising or promotion and note the event and quantity.
- If you issue true uniforms that are clearly for work only and are required on shift, the cost is a business expense. Keep a short written policy and the receipts.
Owner examples
- Owner wear, logo polos: You buy four logo polos at $60 each for yourself. They are ordinary shirts. Deduction is zero.
- Client swag, trade show: You buy 50 logo shirts at $30 each for your spring expo. All 50 are handed out to attendees. Deduction is $1,500 as advertising or promotion. Keep the supplier invoice and a note that says “spring expo giveaway, 50 shirts.”
- Staff uniforms: You buy standardized tops with large branding that staff must wear on shift. Deduction is allowed. Keep the uniform policy and receipts.
Make your uniforms actually uniform
Choose colors and branding that make the items clearly for work only. Put the requirement in a simple policy that names the roles and when the uniform is required. Document the intent and use. When the CRA reviews clothing, they look for proof that an item is work-only and required, not just preferred.
Takeaway for owners: Treat normal clothing as personal. Deduct protective gear, true uniforms, and customer swag. Put your rules in writing and keep tight records.
But what about employees who want to deduct clothing expenses?
Quick background
A Holt Renfrew saleswoman claimed the cost of luxury clothing for several years. During an audit, she asked her employer to sign T2200 forms, but the employer refused. The Tax Court dismissed the appeal. The case is Samotus v. The King, 2025 TCC 104.
The judge reviewed the dress code and program materials. They did not require employees to buy clothing beyond an allowance. Emails from management said there was no obligation to pay out of pocket. If a T2200 were issued, it would show no requirement to incur those expenses.
What this means for employees
There are two pillars you must meet before claiming clothing.
- You are required to pay for it under your employment terms. This must be real. A general dress code or an expectation to look professional is not enough.
- You have a signed T2200 form before you file. The form should be obtained when you prepare your return and kept with your records. No T2200 likely means you cannot claim the expense.
Employee examples
- Retail salesperson: Buys high-end outfits to align with brands. There is a dress code, but no requirement to pay personally. The employer confirms they would not show an obligation on a T2200. Deduction is very unlikely.
- Field technician: Must supply safety boots under the contract. The employer signs a T2200 before filing. Deduction is possible if the boots are protective and you keep the receipts.
Takeaway for employees: If the clothing is not protective or a true uniform, and your employment terms do not require you to pay for it, do not claim it. If it is required, make sure the T2200 is signed and on file before you file your return.
We can help
Want help setting up a clean, CRA-proof uniform and swag policy for your team, or a fast review before you claim employment expenses? Book a consultation. We will map your policy, label your accounts, and prepare a simple file kit that backs up your deductions.
Until next time, save taxes for Canadian small business
Cherry Chan, CPA, CA
Your Canadian Small Business Tax Accountant
