Configure Canadian Federal Tax Information

This topic covers the following tasks:

The federal tax parameters defined in the Federal Tax Info section is used to override the default values for the employee. For example, you can define a total claim amount that is used for all federal taxes instead of the application's default values.

To configure Canadian federal tax information:

Go to People, open the employee profile, and click Payroll > Tax Definitions.
In the Federal Tax Info section, click Add.
In the Effective From field, enter the date that tax definition takes effect.
(Optional) In the Effective To field, enter the date that the tax definition expires. The default date is one year after the effective from date.
In the Total Claim Amount field, enter the total of the claims found on line 13 of the employee's TD1 personal tax credits return form. The amount that you enter in this field overrides the default claim amount and is used to determine the amount of income tax that the employee pays. To achieve a value of zero, see Total Claim Amount with Other Employer configuration.
See Canadian and US Payroll Tax Information.
(Optional) If the employee wants more tax deducted (for example, if they have other income) enter it in the Additional Tax Amount field.
In the Details section, complete the tax fields that apply to the employee. For more information about each field, see Payroll Tax Definitions for Canadian Employees.
Click Save.

Configure Canadian Status Indian Exemptions

When an employee is recognized by the federal government as being registered under the Indian Act, they are considered a Status Indian. If the employee also works at a location that meets the government definition of a reserve, their wages can be legally exempt from federal and provincial income tax, and Nunavut or Northwest Territories payroll tax.

Important: If a Status Indian employee requires exemptions for other taxes, such as income or health taxes, you must configured those exemptions at the employee level in the Employee Payroll Tax section of the Payroll > Tax Definitions screen in People.

Before You Begin: Configure how Dayforce applies Status Indian exemptions in the Taxation Parameters tab of Org Setup > Org Payroll Setup > Legal Entity. See Taxation Parameters for Canada.

To configure Canadian Status Indian Exemptions for an employee:

Go to People, open the employee profile, and click Payroll > Tax Definitions.
In the Tax Status section, click Add.
In the Jurisdiction drop-down list, select Federal.
In the Effective From field, enter the date that the status takes effect.
(Optional) In the Effective To field, enter the date that the status expires.
Select the Is Status Indian checkbox.
In the Registry Number field, enter the registry number from the employee's Status Card.
Click Save.

Configure Number of Days Outside Canada

If a Canadian employee spends some of the year outside of Canada, you can track this for taxation purposes in Payroll > Tax Definitions of the People feature.

To record an employee's number of days outside of Canada:

Go to People, open the employee profile, and click Payroll > Tax Definitions.
In the Tax Status section, click Add.
In the Number of Days Outside Canada field, enter the total number of days the employee is outside of Canada.
Click Save.

Enter CPT30 CPP Exceptions

If a Canadian employee meets the appropriate government requirements and submits the CPT30 form to their employer, they can elect to stop paying CPP for any period of time that they are between the ages of 65 and 70. You can enter the exemption in the Payroll > Tax Definitions screen in the People feature.

An employee who submits a CPT30 form to stop CPP contributions isn’t eligible to be marked CPP exempt in T4 Box 28.

Important: Don’t select the CPT30 Form Filed checkbox for employees who are CPP exempt for another reason (such as self-employed owner or recipient of a CPP disability pension). If you need to mark an employee exempt for another reason, you must enter that separately. This can be done in the Employee Payroll Tax section by going to People, opening an employee profile, and clicking Payroll > Tax Definitions.

To enter a CPT30 CPP exception:

Go to People, open the employee profile, and click Payroll > Tax Definitions.
In the Tax Status section, click Add.
In the Effective From field, enter the date that the exception takes effect.
(Optional) In the Effective To field, enter the date that the exception expires. If you don’t enter a date, Dayforce automatically ends the exception when the employee reaches their 70th birthday.
Select the CPT30 Form Filed checkbox.
Click Save.

Set Up Seasonal Agriculture Workers in Canada

To set up a Canadian employee as a seasonal agriculture worker:

Go to People, open the employee profile, and click Payroll > Tax Definitions.
In the Tax Status section, click Add.
In the Effective From field, enter or select a date. To ensure this configuration is used in subsequent years, leave the Effective To date field empty.
In Employment Code, select 15 - Seasonal Agriculture Workers Program.
Click Save.

Set Up Detached Employees in Canada

To set up an employee as a detached employee in Canada:

Go to People, open the employee profile, and click Work > Work Assignments.
Take the following steps:
1. Click Add or select an existing entry.
2. Enter the necessary information in the record.
3. In the Payroll section, select the Virtual checkbox.
4. Click Save.
Click Payroll > Tax Definitions.
In the Federal Tax Info section, take the following steps:
1. Click Add or select an existing entry.
2. Enter the necessary information in the record.
3. Select the Is Non-Resident checkbox to indicate the employee is a detached employee.
4. Click Save.
In the Tax Status section, take the following steps:
1. Click Add or select an existing entry.
2. In the Effective From field, enter or select a date. To ensure this configuration is used in subsequent years, leave the Effective to field empty.
3. In Employment Code, select 16 - Detached Employee - Social Security Agreement.
4. Click Save.