Payroll Tax Definitions for Canadian Employees

You can view, add, and edit tax information for employees in Canada in the Payroll > Tax Definitions screen of People. For more information about the order in which the tax overrides are applied to the tax calculations, see Canadian and US Payroll Tax Information.

To learn how to add payroll tax definitions for Canadian employees, see Define Canadian Provincial Tax Information and Configure Canadian Federal Tax Information.

Employee Payroll Tax

This section is used to configure any tax overrides for the employee. Not all taxes have specific override parameters.

Fields in the General section in Employee Payroll Tax

Field	Description
Effective From Effective To	The start and end dates when the tax override is in effect.
Exempt Tax and Taxable Wages	Indicates the employee is exempt from this tax.

Fields in the Override Parameters section in Employee Payroll Tax

Field	Description
Reduced EI Rate	The rate definition for a reduced employment insurance rate for the qualified employer. This is an override parameter for the employer employment insurance. See Employment Insurance in Canada.
Additional Tax Amount	This is an override parameter for the employee federal tax.
Labour Sponsored Funds / Fonds de solidarité des travailleurs du Québec
Charitable Donations and Medical Expenses	The total amount of charitable donations the employee has made and medical expenses the employee has incurred during the year. This override parameter applies to federal or provincial taxes.
CRA Authorized Deductions	This is an override parameter for the employee federal tax.
Estimated Annual Lump Sum	This is an override parameter for the employee federal tax.
Estimated Expenses	This is an override parameter for the employee federal tax.
Estimated Remuneration	This is an override parameter for the employee federal tax.
Is Non-Resident	This is an override parameter for the employee federal tax.
Deduction for Living in a Prescribed Zone	This is an override parameter for the employee federal tax.
Total Claim Amount	The total of the claims found on the employee's TD1 personal tax credits return form. This override parameter applies to federal or provincial taxes
Total Claim Amount with Other Employer	Indicates the employee has more than one employer. This is an override parameter for the employee federal tax.
Total Income Less Than Total Claim	Indicates the employee's earnings for the year is less than the amount in the Total Claim Amount field. In this case, Dayforce will not deduct taxes from the employee's earnings. This override parameter applies to federal or provincial taxes.

Federal Tax Info

This section is used to configure an employee's federal tax information.

Fields in the General section in Federal Tax Info

Field	Description
Effective From Effective To	The start and end dates when the tax definition is in effect. Even though the Effective To field is optional, Dayforce enters an end date one year after the Effective From date by default.
Total Claim Amount	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 the total claim example in Canadian and US Payroll Tax Information.
Additional Tax Amount	If the employee chooses to have more tax deducted (for example, if they have other income) from the remuneration they receive in a year, enter these tax amounts in the Additional Tax Amount field.

Fields in the Details section in Federal Tax Info

Field	Description
Deduction for Living in a Prescribed Zone	The residency deduction which the employee is claiming for living in a prescribed zone.
Total Income Less Than Total Claim	Indicates the employee's earnings for the year is less than the amount in the Total Claim Amount field. In this case, Dayforce will not deduct taxes from the employee's earnings.
Total Claim Amount with Other Employer	Indicates the employee has more than one employer.
Is Non-Resident	The employee does not live in Canada but earns income from a Canadian source.
Non-Resident Country Code	The resident country of an employee who has a non-resident status in Canada.
Charitable Donations and Medical Expenses	The total amount of charitable donations the employee has made and medical expenses the employee has incurred during the year.
CRA Authorized Annual Deductions	The total amount of any other deductions the employee is claiming which have been authorized by the Canada Revenue Agency (CRA). The employee needs to provide an authorization letter from the CRA before you can enter a value in this field.
Estimated Remuneration	The estimated amount of the employee's expenses for the year if the employee works on commissions or receives a combination of commission and salary.
Estimated Expenses	The estimated amount of the employee's earnings for the year if the employee works on commissions or receives a combination of commission and salary.

Provincial Tax Info

This section is used to configure an employee's provincial tax information.

Fields in the General section in Provincial Tax Info

Field	Description
Effective From Effective To	The start and end dates when the tax definition is in effect. Even though the Effective To field is optional, Dayforce enters an end date one year after the Effective From date by default.
Province	The province which the employee taxes are owed.
Total Claim Amount	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 the total claim example in Canadian and US Payroll Tax Information.
Additional Tax Amount	If the employee chooses to have more tax deducted (for example, if they have other income) from the remuneration they receive in a year, enter these tax amounts in the Additional Tax Amount field.

Fields in the Details section in Provincial Tax Info

Field	Description
Total Income Less Than Total Claim	Indicates the employee's earnings for the year is less than the amount in the Total Claim Amount field. In this case, Dayforce will not deduct taxes from the employee's earnings.
Charitable Donations and Medical Expenses	The total amount of charitable donations the employee has made and medical expenses the employee has incurred during the year.
Deduction for Living in a Prescribed Zone	For Quebec employees, the residency deduction for living in a prescribed zone.
Deductible Support Payments	For Quebec employees, the deduction for making support payments.
Estimated Remuneration	The estimated yearly earnings for a Quebec employee who works on commission or receives a combination of commission and salary.
Estimated Expenses	The estimated yearly expenses for a Quebec employee who works on commission or receives a combination of commission and salary.
Labour Sponsored Funds (FTQ)	For Quebec, the cost of the shares in a labour-sponsored venture capital corporation that the employee has purchased in the current year. FTQ refers to Fonds de solidarité des travailleurs du Québec.
Fondaction	For Quebec, the total cost of shares that the employee purchased in Fondaction, a provincial labour fund.

Tax Status

This section in the Payroll > Tax Definitions screen of People is used to configure an employee's tax status which affects how their taxes are calculated.

Fields in the General section in Tax Status

Field	Description
Jurisdiction	The government authority to which the tax status applies.
Effective From Effective To	The start and end dates when the tax definition is in effect. Even though the Effective To field is optional, Dayforce enters an end date one year after the Effective From date by default.

Federal-related fields in the Details section in Tax Status

Field	Description
Is Status Indian	Indicates the employee is legally recognized by the federal government as being registered under the Indian Act. See Configure Canadian Status Indian Exemptions.
Registry Number	The registry number from the employee's Indian Status card.
CPT30 Form Filed	Indicates the employee has completed a CPT30 form to stop contributing to the Canada Pension Plan (CPP). See Enter CPT30 CPP Exceptions.
Employment Code	Reports the employment code in the employee's T4 slip for these employment situations: 15 - Seasonal agricultural workers program 16 - Detached employee - social security agreement See Set Up Detached Employees in Canada.
Beyond Provinces	Indicates whether or not a Canadian employee is subject to the federal tax deduction In Canada beyond the limits of any province/territory or outside Canada. The option selected determines how Box 10 in the employee's T4 slip is filled. See Beyond Province Taxation.
Number of Days Outside Canada	The total number of days in the year when the employee was outside Canada.
Is Director	(Only applies to Saskatchewan) Indicates the employee is a company director. When selected, the employee’s earnings aren’t assessable for WCB in Saskatchewan.

Quebec-related fields in the Details section in Tax Status

Field	Description
Number of months in the year during which a disability pension was paid	The number of months for which the employee received a disability pension.
First date of disability	The date on which the disability pension was first paid.
Date on which the disability pension ceased to be paid	The date on which the disability pension stopped being paid.
RL1 Currency Used	If the employee was paid using non-Canadian currency, enter the name of the currency type.
Is Sailor	Indicates the employee is a sailor who is a resident of Quebec and engaged in international freight transportation. They could be eligible for a deduction in the calculation of their taxable income if they work for an employer with the appropriate certification from the Quebec Ministry of Transport. Selecting this checkbox instructs Dayforce to calculate 75% of the employee's associated earnings from Box A of the RL-1 slip, display the amount in Box A-6, and then use it to calculate the employee's total taxable income.
QPP Opt Out Form Filed	Indicates the employee has completed a Revocation of an Election form (RR-50-V) to stop contributing to the Quebec Pension Plan (QPP). This option can only be selected or cleared once in a calendar year. QPP will no longer be deducted for that employee in the first pay period of the following month, based on the effective start date you've set when you select the checkbox. For example, if the effective start date you've configured is July 12, QPP deductions will cease in the first pay run in August. Similarly, when the checkbox is cleared, QPP deductions are taken in the first pay run a month after the effective end date entered for the tax change.

For instructions on how to configure the tax status parameters for Quebec employees, see Define Canadian Provincial Tax Information.

Flat Tax

This section in the Payroll > Tax Definitions screen of People is used to configure flat tax overrides for this employee. For more information about the columns in this section, see Flat Tax Section Columns.

See Flat Tax.