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2.1ÌýÌýÌýÌý Withholding of income tax

Employees must provide their employer with a completed Form TD1 (or Quebec equivalent, see 5.2). This form is the means through which an employee can claim personal tax credits to reduce their income tax bill. For a discussion of personal tax credit entitlement and income tax calculations see Tolley's Global Mobility: Personal Taxes, CA1.3.1.

The employer is required to make statutory deductions (see 1.2). The results of an employee's Form TD1 or Québec equivalent, see 5.2) might mean that an employer may deduct less federal, provincial, or territorial income tax than would otherwise be required.

Payroll deduction tables (T4032) are available for combined federal and provincial payrolls. They provide information on Canada pension plan (CPP) contributions, employment insurance premiums, and federal and provincial tax deductions. Employers must use the tax table that applies to the employee's province or territory of employment.

Note that CPP and EI are not deductible when calculating the income base upon which income tax is withheld. Certain other deductions can be made to reduce the amount