Define Canadian Provincial Tax Information

An employee's tax exemptions and tax statuses are configured in their employee record and used to calculate provincial taxes.

In People, you can add the following provincial tax information to an employee’s record:

• Configure Canadian Provincial Tax Information
• Configure Tax Status Parameters for Quebec Employees
• Configure Code L-11 in RL-1 Slips for Quebec Employees

Configure Canadian Provincial Tax Information

The tax parameters defined in the Provincial Tax Info section are used to override the amounts that were submitted in the employee’s provincial TD1 form. See Payroll Tax Definitions for Canadian Employees.

To define Canadian provincial tax information for an employee:

1. Go to People, open the employee profile, and click Payroll > Tax Definitions.
2. In the Provincial Tax Info section, click Add.
   
3. 
3. In the Effective From field, enter the date that the tax definition takes effect.
4. (Optional) In the Effective To field, enter the date that the tax definition expires. The default date is one year after the date in Effective From.
5. Select the province of the employee’s TD1 form.
6. To enter a total claim amount that is more than the basic personal amount, complete the following steps:
   
   1. Clear the Apply Default Claim Amount checkbox.
   2. In the Total Claim Amount field, enter the total of the tax deductions claimed by the employee. The amount you enter in this field is used to determine the amount of income tax the employee pays, and overrides previous claim amounts.
7. In the Additional Tax Amount field, enter any other taxes that are deducted for the employee, such as, when the employee is receiving other income.
8. (All provinces) In the Charitable Donations and Medical Expenses field, enter the total amount of charitable donations that the employee has made or medical expenses the employee has incurred during the year.
9. (All provinces except Quebec) Select the Total Income Less Than Total Claim checkbox to withhold income taxes when the employee's total income is less than their total claim amount.
10. (Quebec only) Complete the following fields:
    1. If the employee lives in a northern region of Quebec, enter the employee's residency deduction and travel deductions in Deductions for Living in a Prescribed Zone.
    2. Note: For more information about prescribed zones, see the Revenu Quebec website (Prescribed Northern Zones).
    2. In the Deductible Support Payments field, enter the total amount of the support payments that the Quebec employee made that can be deducted from the employee's tax.
    3. In the Fondaction field, enter the amount that the Quebec employee contributed to the worker's fund of the Confédération des syndicats nationaux (CRN).
    4. If the Quebec employee works on commission or gets a combination of commission and salary, complete the following fields:
       1. In the Estimated Expenses field, enter the estimated amount of the employee's expenses for the year.
       2. In the Estimated Renumeration field, enter the estimated amount of the employee's earnings for the year.
    5. Select the Health Contribution Exemption checkbox when the employee lives in Quebec and is exempt from the Quebec Health Contribution.
    6. Important: Dayforce automatically clears this checkbox at the start of each tax year. When the employee is still exempt, you must reselect the Health Contribution Exemption checkbox at the start of the new year.
11. Click Save.

Configure Tax Status Parameters for Quebec Employees

There are some configurable tax status parameters that are specific to Quebec employees.

To configure tax status parameters for Quebec employees:

1. Go to People, open the employee profile, and click Payroll > Tax Definitions.
2. In the Tax Status section, click Add.
3. In the Jurisdiction drop-down list, select Quebec.
4. In the Effective From field, enter the date that the tax definition takes effect.
5. (Optional) In the Effective To field, enter the date that the tax definition expires. The default date is one year after the date in Effective From.
6. Complete the applicable fields. See Quebec-related fields in the Details section in Tax Status.
7. Click Save.

Configure Code L-11 in RL-1 Slips for Quebec Employees

The rate entered in code L-11 in RL-1 slips is used to calculate the security option deduction received on or after June 25, 2024. To apply the rate in the payroll calculations, you must configure the rate in the Quebec employee's profile in the Employment > Employee Properties screen of People.

To configure the rate used in code L-11 in RL-slips for a Quebec employee:

1. Go to People, open the employee profile, and click Employment > Employee Properties.
2. In the Employee Properties table, add the property Quebec Stock options rate.
3. In the Value column, select a rate.
4. Click Save.