Can my corporation pay for my home office?
Yes, within limits — typically by reimbursing the business-use share of home costs. The structure matters, because rent paid to yourself has tax consequences.
Owner-managers working from home have real costs, and there are legitimate ways for the corporation to bear its share — but the structure matters more than people expect.
The clean route: proportional reimbursement
Measure the workspace as a share of the home, and the corporation reimburses that share of operating costs — utilities, internet, maintenance, and similar. Reasonable, documented, and tied to a space genuinely used for the business.
The route that needs advice: charging rent
The corporation can pay you rent for the space — but that is rental income on your personal return, and claiming certain costs against your home (notably capital ones) can put your principal residence exemption at risk on those portions. This is a plan-first conversation, not a bookkeeping default.
What never works
Round numbers with no measurement, a “home office” that is the kitchen table, or mortgage principal as an expense. CRA sees home-office claims constantly; documentation is the difference between routine and painful.
How to calculate the business-use share
The reimbursement has to be reasonable and supported, which means a defensible measurement rather than a round number. The usual approach is square footage: the workspace area divided by the total finished area of the home, applied to the eligible operating costs. A dedicated room used only for the business is the cleanest case; a shared space used part-time generally needs the calculation reduced for personal use as well.
What typically goes into the pool: utilities, internet, home insurance, and maintenance. What does not travel well: the mortgage principal, which is never an operating cost. And a note on the property itself — claiming a share of a home as a business asset can affect the principal residence exemption when you eventually sell, which is a large price for a small annual deduction. That is the trade most owners have not been told about, and the reason a documented reimbursement usually beats a clever structure.
This is general information, not tax advice for your situation. Get started and a Canadian accountant will give you the answer for your business.
Common questions
What percentage of my home can I claim?
Whatever the workspace genuinely represents — measured area, adjusted for shared use. There is no safe standard percentage; there is only your real one, documented.
Can the corporation pay part of my mortgage?
Mortgage interest can enter the calculation in some structures, but principal never, and touching home capital costs risks your principal residence exemption. Get advice before the corporation pays anything mortgage-related.
How do I calculate my home office percentage?
Generally by area: the workspace square footage divided by the total finished area of the home, applied to eligible operating costs like utilities, internet, insurance, and maintenance. A space shared with personal use is normally reduced further to reflect that. Keep the measurement and the underlying bills — the number needs to be supportable, not estimated.
Can my corporation pay me rent for the home office instead?
It is possible but it needs advice. Rent paid to you personally is income to you and creates its own reporting, and claiming part of the home as business property can put your principal residence exemption partly at risk when you sell. For most owner-managers a documented proportional reimbursement achieves the same result without that exposure.