Home Office Expenses for Employees
The home office expense for employees will not directly affect employers as the deductions available relate to employees' personal tax calculation. However, employers will get affected indirectly due to the home office expenses incurred by employees.
For instance, they will require to maintain records to demonstrate that employees receive a reasonable allowance for commuting costs. More importantly, the increase or decrease in employee costs will directly influence the taxable income.
Potential cost savings
Employers will save on utility bills (electricity, heating, and cooling). Companies who reimburse parking charges or offer parking spots will save some extra money. Moreover, businesses can save more money by adopting remote working trends and leasing a smaller office.
Employers might need to purchase equipment and tools for employees to carry out their job remotely. Some companies have to switch to cloud infrastructure to run their operations and facilitate collaboration across remote teams efficiently.
How does it affect your small business?
For small businesses, employees' salaries and costs related to running day-to-day operations represent a significant portion of their costs. A substantial change in this figure can affect the tax liability, for the better or worse.
If a business manages to minimize its operating costs, the income tax liability will increase due to higher profits, and vice versa. Businesses can increase their tax savings by proper tax planning and claiming deductions made available by the CRA.
Are you looking for full-cycle accounting services in Edmonton? Contact us today. At Duggal Professional Corporation, we offer a wide range of financial services and solutions, including accounting, business reporting, and more. Our corporate tax accountant in Edmonton can help your business to create accurate tax assessments.
Call 780-863-2224 to get started right away.