Industry tax guides
Tax Deductions for Tradespeople in Canada: Tools, Apprentices and Travel
$1,000is the most an employed tradesperson can deduct for new tools in a year, on tools costing more than $1,471 in total for 2025.
Sources checked October 20263 min read
The tradesperson's tools deduction
An employee who buys tools for their job as a tradesperson can deduct part of the cost. A tool qualifies, along with associated equipment such as a toolbox, if it was bought new for the job, the employer certifies on Form T2200 that the employee must provide it, and it is not a phone or computer unless it can only measure, locate or calculate. For 2025 returns the deduction is the lesser of $1,000 and the amount by which the lower of the tools' cost and the employee's trade income exceeds $1,471.
| Step | Amount |
|---|---|
| Cost of eligible tools bought in 2025 | $2,500 |
| Employment income as a tradesperson | $45,000 |
| Lower of the two, less $1,471 | $1,029 |
| Deduction, capped at $1,000 | $1,000 |
Key points
- Employed tradespeople deduct up to $1,000 a year for new tools their employer certifies
- Apprentice mechanics have a second, larger tools deduction that can be carried forward
- Construction workers who relocate temporarily can deduct up to $4,000 for 2025, with $10,000 proposed from 2026
- The GST/HST paid on deducted tools can often be recovered with Form GST370
Apprentice mechanics
An employee registered in a program leading to a licence to repair self propelled motorized vehicles, and working as an apprentice mechanic, can claim a second deduction on top of the tradesperson's amount. It works from the cost of eligible tools less a floor based on the Canada employment amount or 5% of apprenticeship income, and any part not claimed can be carried forward and used in a later year, even after the apprenticeship ends. The employer certifies the tools on Form T2200 and the claim goes on Form T777.
The labour mobility deduction
Tradespeople and apprentices employed in construction activities can deduct up to $4,000 a year of temporary relocation costs, such as travel, temporary lodging and meals. The relocation must take them away from their ordinary residence for at least 36 hours, to temporary lodging in Canada at least 150 kilometres closer to the temporary work location, and the claim for a relocation is limited to half of their construction employment income for the year. The Spring Economic Update 2026 proposes raising the limit to $10,000 from 2026, indexed after that, and shortening the distance to 120 kilometres; check whether that change is law before filing a 2026 return.
Employment expenses deducted for tools and relocation include the GST/HST paid on them, and an employee whose employer is a GST/HST registrant can often recover that tax with Form GST370.
Quick answers
Can I deduct tools if I am an employee?
Yes, if you work as a tradesperson, the tools are new, your employer certifies them on Form T2200, and their cost passes the threshold. The deduction is capped at $1,000 a year.
Are a phone or a laptop eligible tools?
Generally no. Electronic communication devices and data processing equipment do not qualify unless they can only be used to measure, locate or calculate.
What is the labour mobility deduction?
A deduction for construction tradespeople who temporarily relocate at least 150 km closer to a work site and stay away from home at least 36 hours: up to $4,000 for 2025, with $10,000 and 120 km proposed from 2026.
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Important. This article provides general educational information, not legal or tax advice for a specific business. Rules, administrative policies, rates and deadlines can change. Confirm your facts and current obligations with the responsible government agency and a qualified adviser.