Are Clothing and Other Personal Attire Costs Tax Deductible?

The fundamental rule for deducting any type of expense from your business income is to determine whether it was incurred for the purpose of earning income:

No deduction shall be made in respect of an outlay or expense except to the extent that it was made or incurred by the taxpayer for the purpose of gaining or producing income from the business or property


While this is quite clear for the majority of expenses – salaries paid to employees, office rent, manufacturing supplies etc. , there are a handful of expenses that seem slightly more ambiguous.  One of the more notable (and often asked) examples of this type of expense relate to personal attire including clothing, shoes and other personal maintenance costs (haircuts, beauty products etc)  Many business owners and self employed individuals are required to maintain a professional appearance when meeting with clients and as such incur costs that they might not otherwise in the purchase of clothing and related accessories.  Unfortunately, the tax court of Canada has ruled time and time again that any attire or personal effects, that can be used in everyday life, regardless of whether you only wear that $1,400 business suit when meeting with your best clients, is NOT deductible.  The only circumstances under which personal attire is deductible is when it relates to a uniform or special clothing:

An employee who is supplied with a distinctive uniform which is required to be worn while carrying out the duties of employment or who is provided with special clothing (including safety footwear) designed for protection from the particular hazards of the employment, is not regarded as receiving a taxable benefit. 

Payments made by an employer to a laundry or dry cleaning establishment for laundry or dry cleaning expenses of uniforms and special clothing, or directly to the employee in reimbursement of such expenses, do not constitute a taxable benefit to the employee.

If the expense does in fact qualify as a distinctive uniform eg. coveralls with your company’s logo or a hazmat suit (chances are that you will not be wearing that to anything else except perhaps as a somewhat unimaginative Halloween costume), then you are allowed to deduct the total amount incurred.  For tax purposes the amount is treated as a capital outlay and included in Class 12 for CCA purposes.  Since the depreciation for this class is 100% (with no half year rule), there is no effective difference between expensing the full amount and including it in Class 12.

For further fun reading on the subject, below are links to Tax Court of Canada cases: