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Date: January 4, 1999
To: Compensation Managers
SUBJECT: Reduction of tax withholding on lump-sum employment income payments
Background
This bulletin is further to my previous bulletin dated July
15, 1998 on the same subject matter. This current bulletin relates specifically to employees who work and reside in
the Province of Quebec. All other details as provided for in the previous bulletin remain unchanged.
Tax waivers - general
Employees who work and reside in the Province of Québec must obtain or provide two waiver letters. For a reduction
of federal income tax, they must provide their compensation specialist with a Letter of Authority issued by Revenue
Canada. For a reduction to their provincial income tax the employees must provide a Letter of Authority issued by the
Ministère du Revenu du Québec.
Modified procedures for Pay Equity
For pay equity only, the Ministère du Revenu du Québec has agreed to follow the procedures put in place for
federal income tax as specified by Revenue Canada. When an employee presents to his or her employer a Revenue Canada
Letter of Authority, for payments in excess of $10,000 or a modified Letter of Authority for payments up to $10,000
then neither federal income tax deductions nor Quebéc provincial income tax deductions will be withheld.
It must be remembered that this approval is conditional on the employee making a deductible RRSP contribution for
the year in which the payment is received. Likewise, the allowable transfer of funds to an employee's RRSP is
conditional upon final approval of either Revenue Canada or the Ministère du Revenu du Québec when the employee
completes his or her income tax return for the year concerned.
Additional information is obtainable by contacting Reg Giekes at 613-952-3202 or by e-mail at: giekes.reg@tbs-sct.gc.ca
T.A. Smith
Director, Pay Administration
Labour Relations Division
Human Resources Branch
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