Payroll Deductions

As an employer, you are responsible for deducting Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums and income tax from remuneration or other types of income you pay.

You are also responsible for remitting the deductions along with the employer's portion of CPP and EI to the Canada Revenue Agency (CRA) and reporting them on the applicable information slips.

Eligibility Criteria

You need to register for a payroll account if you:

• pay salaries or wages; 
• pay tips and gratuities; 
• pay bonuses and vacation pay; 
• provide benefits and allowances to employees; or 
• need to deduct and remit amounts from other types of remuneration (such as pension or superannuation).

If you need a payroll account and you already have a Business Number (BN), you only need to add a payroll deductions account to your existing BN. However, if you don't have a BN, you must request one and register for a payroll account before your first remittance due date.

Employment in Quebec

The Quebec provincial government administers its own provincial pension plan called the Quebec Pension Plan (QPP), its own provincial income tax and, effective January 1, 2006, the Quebec Parental Insurance Plan (QPIP).

Visit the Revenu Québec Web site or write to Revenu Québec, 3800 rue de Marly, Québec, QC G1X 4A5, if one of the following situations applies and you need more information:

• the employee has to report to your place of business in Quebec; or 
• the employee does not have to report to your place of business, but you pay the employee from your place of business in Quebec.

Summary

When you hire an employee, you have to:

• get his or her social insurance number (SIN); and
• have him or her complete Form TD1, Personal Tax Credits Return and the provincial Personal Tax Credit Return for the province of employment.

If the employee works for you and you cannot get the SIN or TD1, you are still responsible to start calculating payroll deductions.

Remitting deductions

As an employer, you have to remit the CPP contributions, the EI premiums, and income tax deducted from your employees' income, along with your share of CPP contributions and EI premiums.

These deductions, along with your remittance form, must be received by CRA on or before your remittance due dates. Due dates vary depending on the type of remitter you are.

Remittances can be made electronically, at your financial institution or by mail.

How to calculate payroll deductions

The Payroll Deductions Online Calculator (PDOC) calculates payroll deductions for all provinces (except for Quebec), and territories based on the information you provide. To calculate payroll deductions for Quebec, download the WINRAS program from Revenu Québec.

If you are not making any remittance for the month or quarter, you may notify CRA using the TeleReply service or by mail.

Completing and filing information returns

You have to report the income and deductions on the appropriate information returns. Employer information returns consist of both a summary and slip. Depending on the type of income you pay, you may have to file one or more types of returns (examples: T4 and T4A). All summaries and slips are due on the last day of February following the calendar year to which they apply.

Ontario Contact(s):
See National Contact.

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National Contact(s):
Canada Revenue Agency
Toll-free (information): 1-800-959-5525 (Business Enquiries and Registrations)
Toll-free (publications): 1-800-959-2221 (Forms and Publications)
Web site: http://www.cra.gc.ca/menu-e.html