T4 Box 42 — Employment commissions
Commission income portion of your Box 14 total — important if you want to claim commission-employee expenses on Form T2200/T777.
At a glance — Box 42
- Box name
- Employment commissions
- T1 line
- Line 10120 — Commissions (memo, not added on top of Line 10100)
- Check against
- Your commission statements for the year. The amount is part of box 14, not additional to it.
What Box 42 means
Box 42 breaks out the part of your employment income that was paid as commissions for selling property or negotiating contracts for your employer. The CRA requires employers to report the amount under code 42 and in box 14, so it is already inside your employment income. Box 42 simply labels how much of it was commission.
The reason the CRA wants it labelled is that commission employees are allowed a wider range of employment expense deductions than salaried employees, including advertising and promotion, entertainment, licences and certain home office costs that a salaried employee cannot claim.
The wider list comes with a ceiling. Except for interest and capital cost allowance on your vehicle, the total commission expenses you deduct cannot exceed the commissions or similar amounts you received in the year, which is exactly the figure in box 42.
If your expenses come to more than your commissions, the CRA allows you to switch methods and claim as a salaried employee instead. You lose the advertising and entertainment deductions, but the claim is no longer capped by your commission income and you can still claim travelling expenses, vehicle interest and capital cost allowance.
Tax return implications
- Report the box 42 total at line 10120. It is a memo line: the amount is already in line 10100 and must not be added again when you total line 15000.
- To deduct commission expenses you need Form T2200, Declaration of Conditions of Employment, completed by your employer and kept with your records, and you claim through Form T777 at line 22900.
- All five commission-employee conditions must be met: you had to pay your own expenses under your contract, you were normally required to work away from your employer's place of business, you were paid at least partly by commission based on sales made or contracts negotiated, you did not receive a non-taxable travel allowance, and you hold the signed T2200.
- Compare both methods before you file. The salaried method wins whenever your travelling and vehicle costs alone exceed your commissions.
- GST, HST and provincial sales tax paid on deductible expenses form part of the claim, and may also support an employee GST/HST rebate at line 45700.
Common pitfalls & things to check
- Adding box 42 to box 14 is the most common error on this box. It double-counts your commissions and inflates your income.
- A T2200 is not a receipt and is not filed with your return, but without one on file the whole employment expense claim fails on review.
- Being paid commission does not by itself make you a commission employee for expense purposes. If you work at your employer's premises rather than away from them, you fail the second condition however you are paid.
- Self-employed commission income is not box 42 at all. That is business income reported on Form T2125, under a different and generally broader expense regime.
FAQ
Do I add box 42 to my income?
No. Box 42 is already included in box 14. Line 10120 exists so the CRA can see how much of your employment income was commission; the amount is not added again when you calculate total income.
My box 42 is blank but I earn commission. Does that matter?
It can. Without a commission figure on the slip there is nothing supporting a commission-employee expense claim. Ask your employer to amend the slip if commissions were in fact paid.
Can I claim more expenses than my commissions?
Not under the commission-employee rules, apart from interest and capital cost allowance on your vehicle. If your expenses are larger, consider claiming as a salaried employee instead: the cap disappears but the list of eligible expenses is shorter.
Which line do the expenses go on?
Line 22900, calculated on Form T777. Box 42 itself goes on line 10120. The two are related but reported in different places.
Related T4 boxes
Box 40 — Other taxable allowances and benefits
Taxable benefits and allowances that have no T4 code of their own — group term life insurance, car allowances, taxable gifts. Already included in Box 14.
Box 44 — Union dues
Annual union or professional-association dues paid through payroll deduction — fully deductible from employment income.
Box 46 — Charitable donations
Charitable donations made through payroll deduction — claim them as part of your charitable donation tax credit.
Box 14 — Employment income
Your total gross employment income for the year before any deductions — salary, wages, bonuses, commissions, taxable benefits and most other pay.
Filing your return? Use the payroll deductions calculator to verify the amounts on your T4 match expected CPP, EI and income tax withholdings, and the income tax calculator to estimate your refund or balance owing.
Sources
T4 box definitions from CRA T4 employer guide. Rates and thresholds current for 2025; file your 2025 T1 by April 30, 2026 (self-employed June 15).
Related Calculators
Take-home pay
Net pay after federal, provincial, CPP and EI deductions
Federal + provincial income tax
Combined tax on your income by province
CPP & EI premiums
CPP1, CPP2 and Employment Insurance for 2026
Federal public service pay
AS-01 to AS-07 salary with pension, CPP/QPP and EI
All Canadian tax calculators
Browse every catax.tools calculator