Construction Workers: Understanding the Labour Mobility Deduction
Working away from home is common in construction. Tradespeople and apprentices may travel to temporary job sites for extended periods, adding accommodation and travel costs on top of their regular household expenses.
The labour mobility deduction can help eligible construction workers offset certain expenses associated with temporary relocation for work. Changes taking effect for 2026 may also make the deduction available in more situations.
What is the labour mobility deduction?
The labour mobility deduction is designed for eligible tradespeople and apprentices in the construction industry who temporarily relocate for work.
Eligible workers may be able to deduct certain qualifying expenses associated with temporary lodging and travel to a work location, provided the applicable requirements are met.
For construction workers who regularly move between temporary job sites, the deduction is worth considering as part of annual tax planning.
What changes in 2026?
Changes to the labour mobility deduction take effect for 2026 and subsequent years, including changes to the distance requirement and the maximum amount that may be claimed.
For workers who previously fell outside the eligibility requirements or regularly incur significant costs while working away from home, these changes may increase the value of the deduction.
If you’ve claimed the deduction before, don’t assume the same limits and eligibility requirements apply for 2026. Review the current rules when preparing your return.
What if your employer provides an allowance?
Receiving support from an employer doesn’t necessarily mean there is no deduction available.
Employer allowances and reimbursements need to be considered when determining eligible expenses. Generally, you shouldn’t claim the same expense twice, so understanding what your employer has covered is an important part of calculating the deduction.
Keep records showing both your actual expenses and any amounts paid or reimbursed by your employer.
Keep your records as you go
Good records make the deduction easier to support at tax time.
Construction workers who may qualify should consider keeping:
- Receipts for eligible temporary accommodation and travel expenses.
- Records showing the locations of temporary job sites.
- Documentation of employer allowances or reimbursements.
- Records needed to establish that the applicable distance and eligibility requirements were met.
Keeping this information throughout the year is much easier than trying to reconstruct several months of travel and accommodation costs when it’s time to file your return.
Review the deduction for 2026
If you’re a tradesperson or apprentice who regularly works away from home, the labour mobility deduction may be worth another look for 2026.
Before claiming it, confirm that your work arrangement and expenses meet the current eligibility requirements and consider how any employer-paid amounts affect your claim.
Davidson can help you understand the labour mobility deduction, review your eligible expenses, and determine how employer allowances or reimbursements affect your tax return.
This article is provided for general information only and should not be considered accounting, legal, or tax advice. Your individual circumstances may differ. Contact your trusted advisor for guidance specific to your tax needs.
