• General information - Source deductions of Québec ...
• Calculation Method
• Taxable benefits
• Vacation pay
• Bonuses and retroactive pay
• Overtime pay
• Tips
• Director's fees
• Commissions
• Single payments
• Retiring allowance
• Death benefit
• Pension payments
• Payments from an RESP
• Payments from an RRSP or a RRIF
• Earnings supplements

Retiring Allowance

A retiring allowance is an amount paid to an employee upon

• loss of employment; 
• retirement (in this case, the amount must be paid to the employee at the time of retirement, or after retirement in recognition of the employee's long service).

A retiring allowance may include an amount reimbursed for sick leave accumulated but not used before the employee's retirement or resignation, an amount paid for damages, or compensation in lieu of notice.

A retiring allowance may be transferred in whole or in part to a registered pension plan (RPP) or a registered retirement savings plan (RRSP),

• by the employee or former employee during the taxation year or during the 60-day period following the end of the year, or  
• by you at the time of payment.

You are not required to withhold income tax from the portion of the retiring allowance that is transferred directly to an RPP or an RRSP and that may be deducted from the employee's or former employee's income. The deductible amount is the amount determined under the Income Tax Act (Statutes of Canada).