How do you Remit Payroll Deductions to the CRA?Įmployers can remit their payroll deductions to the Canada Revenue Agency by way of mail or online. In simple terms, remittance is the filing of payroll deductions to the Canadian government. The payroll process includes paying employee salaries by calculating, deducting, and remitting the government’s source deductions for every pay period issued. The deduction and remittance process go hand in hand for employers in Canada. Individuals in Quebec will need to use a different form, known as the TP-1015.3-V, Source Deductions Return. Individuals will need to complete this form and provide it to their employer to keep on file. To correctly calculate income taxes, employers will need to use Form TD1, known as the Personal Tax Credits Return. Employers are responsible for deducting income taxes from the income they pay their employees and must consider the provincial employment taxes to withhold the proper amount. Income taxes are paid at a federal and provincial or territorial level and are the third main mandatory form of deductions. Employers can use the annual EI premium rate and maximum to calculate the appropriate deductions from payroll.įor employees working in Quebec, they will be required to pay into the Quebec Parental Insurance Plan (QPIP) while also meeting a reduced EI premium rate. The employer will also contribute to the EI, which is 1.4 times the premium withheld for each worker. EI is a program run by Canada’s federal government that protects workers who are unable to work due to sickness, pregnancy, maternity leave, or when caring for a seriously ill family member, by paying out their benefits.Įmployees will deduct EI premiums from each dollar of their pay, up to the yearly maximum.
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Employment Insurance Premiums (EI)Įmployment insurance is another mandatory form of deduction. This amount withheld is used for each employee’s pension plan, which provides basic benefits to them when they retire or become disabled. The CPP contributions cover all provinces, except Quebec, which has its own Quebec Pension Plan (QPP).Īs an employer, you will need to use the annual CPP contribution rates and maximums to calculate the proper deductions. The Canadian Pension Plan is a mandatory deduction that must be made for any employee between the ages of 18 and 70, who is in pensionable employment, and is not already receiving CPP or disability. Typically, employers will need to account for three specific types of deductions in Canada. Once all taxable benefits are accounted for, you can start making the appropriate deductions.Įach tax season, the Canada Revenue Agency issues a payroll deductions table for each province to ensure businesses calculate appropriate decreases in their employees’ wages. As the employer, this responsibility will fall to you.
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Prior to making a deduction, you will need to ensure all taxable benefits are accounted for on your employees’ pay. A voluntary deduction includes healthcare benefit packages, savings bonds, charitable contributions, and social funds.
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A mandatory deduction includes government programs that all businesses with employees must join, such as pension plans, insurance, and taxes. The amount leftover from these deductions is the net wage, which will then be paid to the employee.ĭeductions can be grouped into mandatory and voluntary deductions. Learn what payroll deductions are, the various types associated with them, and the remittance schedule you must follow as required by the CRA.Ī payroll deduction is a specific amount of money taken out of an employee’s gross wage to pay for a service or government program. Operating a business in Canada means complying with all pay regulations dictated by the Canada Revenue Agency (CRA), including required deductions and remittances. Small businesses that hire employees must be aware of all payroll responsibilities attached to being an employer.