By OptiVal Editorial Desk

Remote Work Equipment in Canada: Who Pays for the Laptop?

You have just hired a remote bookkeeper. They start Monday. Then the question lands in your inbox: “Do I use my own laptop, or will the company send one?” How you answer decides who owns the equipment, whether the CRA treats the arrangement as a taxable benefit, and what you can claim on your own tax return. Here is how remote work equipment in Canada works, from the employer’s side of the desk.

Remote work equipment in Canada: the three setup models

Almost every Canadian small business lands on one of three approaches:

1. The company provides the equipment. You buy a laptop, a monitor, maybe a headset, and lend them to the employee for the duration of the job. The company owns everything. This is the cleanest model, and the one we recommend for finance staff who touch your banking and accounting systems.

2. The employee buys, you reimburse. The employee purchases the laptop and submits the receipt. Simple, but the tax treatment is less friendly than most owners expect.

3. A flat stipend or allowance. You pay, say, $1,000 a year as a “home office allowance” and the employee spends it as they see fit. The easiest to run, and the worst tax outcome for the employee, because allowances are almost always taxable.

There is no rule that says you must pick one model for everything. Plenty of owners do a hybrid: company-owned laptop and monitor, plus a modest reimbursement for a chair or keyboard. The tax rules treat each piece differently.

The CRA’s position on employer-provided computers

The CRA’s Employers’ Guide to Taxable Benefits (T4130) is clear on the good news. When you provide a computer to an employee and it primarily benefits your business, there is no taxable benefit to the employee. The CRA looks for a few markers: the equipment is used mainly for employment duties, it is available to all employees or a class of employees, and the employee gives it back when the job ends.

That last point matters. The equipment has to come back. Your offer letter or equipment policy should say so explicitly: the laptop is company property and is returned on the last day. This is both a tax position and a security position. When a remote bookkeeper leaves and the laptop stays in their home office, you have a data problem, not just an asset problem.

Cell phones follow the same logic. If you reimburse a reasonable amount for a phone used primarily for work, the CRA generally does not treat it as a taxable benefit. A basic plan with a flat monthly cost, where personal use is incidental, is fine.

Reimbursements: the rule most owners get wrong

Here is the trap. If the employee buys the laptop themselves and you reimburse the full cost, the CRA’s general view is that the employee has received a taxable benefit: you paid for an asset the employee gets to keep.

During the pandemic, the CRA ran a temporary administrative position: employers could reimburse up to $500 per employee for computer or home office equipment without creating a taxable benefit. That relief expired on December 31, 2022. We still see owners quoting the $500 rule as if it is current law. It is not.

The practical takeaway: if you want the reimbursement route to stay clean, keep the amount modest, require receipts, and accept that the reimbursed amount belongs on the employee’s T4 as a taxable benefit.

And the stipend model? The CRA treats an allowance as taxable income to the employee, full stop, regardless of what it is spent on. A $1,000 home office allowance is $1,000 of employment income. Some owners still prefer it for simplicity, as long as everyone knows the tax cost is baked in.

What the employer can claim on the business return

Whatever you spend equipping a remote employee is a business expense, and capital items follow the normal capital cost allowance rules:

• Laptops, desktops, and systems software go into CCA Class 50 at 55%. A $1,600 laptop bought for your remote bookkeeper lands in Class 50 like any other computer purchase.
• Application software and small tools under $500 fall into Class 12 at 100%, written off in the year of purchase.
• Desks, chairs, and office furniture you buy for the home office setup go into Class 8 at 20%. (Our capital cost allowance guide has the full class list.)

On top of that, the HST or GST you pay on equipment bought for your commercial activity is recoverable through input tax credits, exactly as it would be for office equipment. Keep the invoices in the company’s name, not the employee’s, or the ITC claim gets murky.

The T2200 side: what your employee can and cannot deduct

Sometimes the employee pays for part of the setup themselves: a share of the internet bill, office supplies, the extra monitor they bought on sale. Whether they can deduct any of that depends on you signing a Form T2200, Declaration of Conditions of Employment. Without it, no home office deduction.

Even with a T2200, the rules are narrower than employees hope. They can claim a reasonable portion of utilities, maintenance, and supplies, but never mortgage interest, property taxes, home insurance, or capital cost allowance on the home. They cannot deduct the cost of computers, peripherals, or furniture at all.

One more rule worth knowing: no double-dipping. If you reimbursed the expense, the employee cannot also claim it. Say this out loud at tax time.

Put it in a one-page equipment policy

You do not need a 20-page IT policy. A single page, signed before the first day, covers the essentials: what the company provides and what it does not; that all provided equipment is company property and must be returned on the last day; an inventory list with serial numbers, signed by the employee on receipt; basic acceptable-use expectations (work use, encrypted drive); and the departure routine: remote wipe of company data and return shipping at the company’s cost.

That last clause does double duty. The return-on-termination requirement protects your client data, and it is the same condition the CRA looks for when it asks whether the equipment primarily benefits the employer.

And a note for owners building an offshore finance team: providing the laptop is also a security decision. A company-owned device lets you enforce encryption, multi-factor authentication, and remote wipe from day one. Our guide to how an offshore finance team works covers the access-control side.

The bottom line

Buy the laptop yourself, lend it to the employee, and get it back at the end. That single decision keeps the CRA happy, keeps the employee’s T4 clean, and keeps your data under your control. Reimbursements and stipends have their place, but know the tax cost before you choose them.

Setting up remote finance staff? We help Canadian businesses hire remote bookkeepers and finance support through our offshore team, and we handle the practical setup, from equipment policy to secure access, so your books are in good hands from day one. Book a free consultation to talk through what your business needs.