*** Transcriber's Note: Please set your voice synthesizer to read most punctuation. When you encounter the caret sign at the end of a line, please enter the applicable information, if necessary. Tables are set-up in a narrative format and are indicated by three back-slashes at the beginning and at the end. Also, shaded areas are indicated by two back-slashes at the beginning and at the end. *** Canada Revenue Agency (Front cover) Payroll Deductions Formulas for Computer Programs Ninety fifth Edition Effective January 1, 2012 T4127(E) Revision 12 PAGE 2 Distribution of this publication This guide is only available on our Web site. From there you can print the guide or download it to your computer. More payroll deductions information is available on our Web site at www.cra.gc.ca/payroll. Electronic mailing lists-more ways to serve you! If your business has access to the Internet, we can notify you at once of any changes. To get quick and easy access to our latest information, as well as new publications and changes to payroll deductions, you can subscribe free of charge to any of our electronic mailing lists. To subscribe, go to www.cra.gc.ca/lists. After you subscribe, we will send a reply asking you to confirm the enrolment of your business. After you confirm your subscription, you will get an email whenever there is new information. It's that simple! More information on this convenient, free, electronic subscription service is available at: www.cra.gc.ca/lists. Payroll Deductions Online Calculator For your 2012 payroll deductions, you can use our Payroll Deductions Online Calculator (PDOC). PDOC makes it easier to calculate payroll deductions. The calculator includes an option to help you make sure that enough Canada Pension Plan contributions and employment insurance premiums have been withheld for full-year employees. PDOC is available at www.cra.gc.ca/pdoc. T4032, Payroll Deductions Tables As of January 2012, Publication T4032, Payroll Deductions Tables, will be available on CD for use on any computer with or without Internet access. You can order a copy at www.cra.gc.ca/orderforms or by calling 1-800-959-2221. Paper copies remain available for employers who do not use a computer. To get a copy, call us at 1-800-959-2221. PAGE 3 Table of contents What does this publication contain? page 5 Employers who have an establishment in the province of Quebec, page 5 What is new for January 1, 2012? page 5 Tax measures for 2012, page 5 Federal changes included in this edition, page 5 Indexing for 2012, page 5 Federal tax rates and income thresholds, page 6 Federal personal amounts for 2012, page 6 Canada employment credit for 2012, page 6 Federal labour-sponsored funds tax credit for 2012, page 7 Federal surtax for income not earned in a province or territory, page 7 Canada Pension Plan (CPP) for 2012, page 7 Quebec Pension Plan (QPP) for 2012, page 7 Employment insurance (EI) for 2012, page 7 Provincial and territorial tax changes as of January 1, 2012, page 8 1. Alberta, page 8 2. British Columbia, page 8 3. Manitoba, page 9 4. New Brunswick, page 9 5. Newfoundland and Labrador, page 9 6. Northwest Territories, page 10 7. Nova Scotia, page 10 8. Nunavut, page 11 9. Ontario, page 11 10. Prince Edward Island, page 12 11. Quebec, page 12 12. Saskatchewan, page 13 13. Yukon, page 13 Personal tax credits returns (TD1 forms), page 14 Federal Form TD1, 2012 Personal Tax Credits Return, page 14 Indexing of personal amounts, page 14 Provincial and territorial TD1 forms, page 14 Claim codes, page 15 Basic personal amounts and employment income from all sources, page 15 Federal, provincial, and territorial claim codes, page 15 Tax deductions from commission income, page 20 Form TD1X, Statement of Commission Income and Expenses for Payroll Tax Deductions, page 20 Remitting and reporting federal and provincial or territorial tax deductions 20 Payroll remittances (Form PD7A, Statement of Account for Current Source Deductions), page 20 Pay statements and T4 slips, Statement of Remuneration Paid, page 20 Letters of authority, page 20 General information, page 20 Any deviation from the formulas, page 20 Rounding procedures, page 20 Mathematical symbol definitions, page 21 Tax deductions comparison, page 21 Lump-sum payments, page 21 Registered retirement income fund, page 21 Registered retirement savings plans, page 21 PAGE 4 Information returns, page 22 Information returns electronic filing, page 22 Use and requirement of social insurance number, page 22 - Validating a social insurance number, page 22 - Social insurance numbers that do not pass the validation check, page 23 Validating a business number, page 23 Part A - Formulas to determine tax deductions on salary, wages, taxable benefits, pension income, commissions, and other non-periodic payments, page 23 Option 1 - General tax formula 23 Glossary, page 24 Formula to calculate annual taxable income (A), page 25 Formula to calculate basic federal tax (T3), page 27 Formula to calculate the annual federal tax payable (T1), page 29 Tax calculation formula for bonuses, retroactive pay increases, and other non-periodic payments, page 29 Formula to calculate annual basic provincial or territorial tax (T4), page 31 Formulas to calculate annual provincial or territorial tax deduction (T2), page 32 Formula to calculate the tax deductions (T) for the pay period, page 42 Option 1 - Tax calculation examples for periodic payments, page 43 - Example - Assumptions and federal calculation, page 43 - Testing results - Example, page 53 - Example-only for employees remunerated by commission, page 53 - Example-only for employees in the hotel and restaurant business in Quebec, page 55 Option 2 - Tax formula based on cumulative averaging, page 57 - Calculation of income, page 57 - Calculation of tax for the pay period, page 58 - Special situations, page 58 - Formula to calculate annual taxable income (A), page 58 - Formula to calculate basic federal tax (T3), page 59 - Formula to calculate the federal tax payable (T1), page 60 - Formula to calculate provincial and territorial tax payable (T2), page 61 - Formula to calculate tax deductions (T) for the pay period, page 61 Option 2 - Step-by-step example when calculating tax deductions separately on periodic and non-periodic payments, page 62 - Step 1 - Calculation of annual tax on year-to-date income including B1 and B, page 62 - Step 2 - Calculation of annual tax on year-to-date income including B1 only, page 64 - Step 3 - Calculation of tax deduction on current periodic payment (T), page 64 - Step 4 - Calculation of tax deduction on current bonus payment (TB), page 65 Option 2 - Examples when calculating the tax deductions on salary and non- periodic payments separately, page 65 Part B - Canada Pension Plan (CPP), page 80 Employee and employer CPP contributions for 2012, page 80 Formula to determine CPP contributions for employees receiving salary or wages, page 80 Formula to determine CPP contributions-only for employees remunerated by commission, page 80 - Special CPP situations, page 81 - Changes to the rules for deducting Canada Pension Plan (CPP) contributions, page 81 Year-end calculation of deductions for an employee's CPP contributions, page 82 Employee's CPP basic exemption for various pay periods for 2012, page 83 Part C - Employment insurance (EI), page 83 Employee and employer EI premiums for 2012, page 83 Formula to calculate EI premiums for 2012, page 84 Year-end calculation of deductions for employee's employment insurance premiums, page 85 Part D - Summary sheet, page 86 PAGE 5 What does this publication contain? This publication contains the formulas you need to determine federal, provincial (except Quebec), and territorial income taxes, Canada Pension Plan (CPP) contributions, and employment insurance (EI) premium deductions. The formulas also let you calculate payroll deductions for special cases such as commission, pension income, bonuses, and retroactive pay increases. The formulas used in this publication to calculate statutory deductions have been approved for purposes of the Income Tax Act, Canada Pension Plan, and Employment Insurance Act, as well as their related regulations and any amendments proposed to these acts. The formulas are valid unless any adjustments are needed because of changes to income tax rates, personal tax credits, or CPP pensionable earnings, contributions, or rate, or EI insurable earnings, premiums, or rate. For more information on income amounts that are subject to payroll deductions, see the employers' guide called Payroll Deductions and Remittances. If you have questions about the formulas in this publication, contact your tax services office or tax centre. For the addresses and telephone numbers of your tax services office or tax centre, see the listings in the government section of your telephone book or visit our Web site at www.cra.gc.ca. Employers who have an establishment in the province of Quebec In this publication, we refer to the annual provincial or territorial tax deduction as factor T2. However, factor T2 does not apply in the province of Quebec. Quebec administers its own provincial income tax and Quebec Pension Plan contributions. If you have questions about the formulas for Quebec, please contact Revenu Québec: Revenu Québec 3800 Marly Street Ste-Foy QC G1X 4A5 Telephone: 1-800-567-4692 Outside Canada: 1-418-659-4692 What is new for January 1, 2012? \\ The information in this publication is effective January 1, 2012. This publication replaces the 94th edition of the Payroll Deductions Formulas for Computer Programs. Significant changes to the formulas and text in this publication appear in a shaded background. \\ Tax measures for 2012 This publication reflects some income tax changes recently announced which, if enacted as proposed, would be effective January 1, 2012. At the time of publishing, these proposed changes had not been legislated. We recommend that you use the new payroll deductions tables and formulas in this publication for withholding, starting with your first payroll in 2012. Federal changes included in this edition Indexing for 2012 \\ The income tax thresholds and many of the personal amounts on the federal Form TD1, Personal Tax Credits Return, are indexed for 2012. Indexing means that these values are adjusted based on changes to the consumer price index. The federal indexing factor for 2012 is 2.8%. To calculate the indexed income thresholds and personal amounts for 2012, multiply the appropriate federal amounts by 1.028. For more information on indexing, see page 14. \\ PAGE 6 Federal tax rates and income thresholds As of January 1, 2012, the federal tax rates have not changed. The income thresholds are as follows: \\ - 15% on income less than or equal to $42,707 (formerly $41,544); - 22% on income greater than $42,707, but less than or equal to $85,414 (formerly $83,088); - 26% on income greater than $85,414, but less than or equal to $132,406 (formerly $128,800); and - 29% on income greater than $132,406 (formerly $128,800). \\ The lowest tax rate used to calculate the federal non-refundable tax credits (factors K1, K2, and K4) is still 15%. \\\ \\ 2012 federal tax rates and income thresholds Annual taxable income A: More than $0 - Not more than $42,707 Rate R: 0.15 Constant K: $0 More than 42,707 - Not more than 85,414 Rate R: 0.22 Constant K: 2,989 More than 85,414 - Not more than 132,406 Rate R: 0.26 Constant K: 6,406 More than 132,406 and over Rate R: 0.29 Constant K: 10,378 \\\ \\ Federal personal amounts for 2012 \\ For 2012, some federal personal amounts were increased due to federal indexing. The 2012 federal indexing factor is 2.8%. For complete information on all personal amounts for 2012, see the federal Form TD1 2012. Basic personal amount $10,822 Child amount 2,191 Age amount 6,720 \\ Pension income amount 2,000 Education and textbook amount for each month (full-time) 465 Education and textbook amount for each month (part-time) 140 \\ Disability amount 7,546 Spouse or common-law partner amount 10,822 Amount for an eligible dependant 10,822 Caregiver amount 4,402 Amount for an infirm dependant age 18 or older 6,402 \\ For more information, see the section called "Personal tax credits returns (TD1 forms)" on page 14. Canada employment credit for 2012 The Canada employment credit (factor K4) is whichever of the following amounts is less: \\ (i) 0.15 multiplied by A; or (ii) 0.15 multiplied by $1,095. \\ Note For the Canada employment credit, A is the annual gross income from office or employment before deductions. This is the same amount you usually report in box 14 of a T4 slip. As administrative relief, you can use the regular factor A (annual taxable income) for this calculation, except when the total income is superannuation or pension benefits. PAGE 7 Federal labour-sponsored funds tax credit for 2012 The federal labour-sponsored funds tax credit (factor LCF) for 2012 is still the lesser of $750 and 15% of the approved shares purchase. Federal surtax for income not earned in a province or territory The federal surtax rate for income, which is considered to be earned in Canada but not considered to be earned in a province or territory, is still 48%. This federal surtax applies to deemed residents of Canada such as members of the Canadian Forces who reside outside Canada, Canadian residents with income from a permanent establishment in a foreign country, and non- residents who have employment income taxable in Canada. Canada Pension Plan (CPP) for 2012 \\ For 2012, the CPP maximum pensionable earnings are $50,100, and the basic exemption for the year is $3,500. The contribution rate for employees is 4.95%. An employee's maximum contribution for the year is $2,306.70. The employer's contribution is an amount equal to the total of the employee's contribution. For insurance companies that need the year's maximum pensionable earnings before rounding, the amount for this year is $50,168.60. \\ Quebec Pension Plan (QPP) for 2012 \\ For 2012, the QPP contribution rate for employees is 5.025%. An employee's maximum contribution for the year is $2,341.65. The employer's contribution is an amount equal to the total of the employee's contribution. \\ Employment insurance (EI) for 2012 \\ For 2012 in Canada (but not Quebec) the maximum annual insurable earnings are $45,900 and the EI premium rate is 1.83%, for a maximum annual premium of $839.97. In Quebec, the premium rate is 1.47%, for a maximum annual premium of $674.73. The Canada Revenue Agency administers the requirements for EI premiums. The maximum earnings for the Quebec Parental Insurance Plan (QPIP) for 2012 are $66,000 with a rate of 0.559%, for a maximum annual premium of $368.94. \\ On March 1, 2005, the Government of Quebec and the Government of Canada signed a final agreement fixing the terms and conditions for implementing the Quebec Parental Insurance Plan (QPIP). QPIP references in this publication are only for clarifying EI requirements. All QPIP requirements should be confirmed with Revenu Québec, which administers that plan. Employers will use the EI rate corresponding to the province or territory of employment. A reduced EI rate applies when the province of employment is Quebec and the regular EI rate applies when the province of employment is other than Quebec or is a territory. QPIP premiums, insurable earnings, and exempt code if applicable will be reported on the T4 slip. Generally, if remuneration is subject to EI premiums then it is also subject to QPIP premiums. However, there are exceptions where remuneration is not insurable under the Employment Insurance Act but is still subject to QPIP premiums. For a list of remuneration that is subject to QPIP premiums, please contact Revenu Québec. \\ When an employee changes province or territory of employment with the same employer during the year, the maximum premium for the year will vary based on the province or territory where the first $45,900 of insurable earnings are paid. \\ PAGE 8 Example: \\ An employee makes $30,000 of insurable earnings in Ontario, changes his province of employment to Quebec, and makes an extra $40,000 with the same employer. The employee's maximum premium is calculated as follows: In Ontario: $30,000 multiplied by 1.83% = $549.00 In Quebec: $15,900 multiplied by 1.47% = $233.73 Total: ($30,000 + $15,900) = $45,900 Total: ($549.00 + $233.73) = $782.73 \\ The Canada Revenue Agency and Revenu Québec will reconcile adjustments to EI and QPIP premiums for transborder employees. Adjustments between the EI and QPIP deductions will be resolved through the filing of the income tax and benefit return and an annual year-end adjustment process. As an employer, your contribution is 1.4 times the amount of the employee's premiums for the pay period, unless a reduced rate applies. Provincial and territorial tax changes as of January 1, 2012 1. Alberta The provincial tax rate that applies to all taxable income for Alberta is still 10%. \\ Personal amounts have been indexed. The provincial indexing factor for 2012 is 1.8%. To calculate the indexed amounts, multiply the appropriate personal amounts by 1.018. For more information on indexing, see page 14. \\ Listed below are some of the revised non-refundable personal tax credits amounts for Alberta. For complete information on personal amounts, see Form TD1AB. \\ - The basic personal amount is revised to $17,282 (formerly $16,977). - The spouse or common-law partner amount is revised to $17,282 (formerly $16,977). \\ Personal amounts will be multiplied by Alberta's tax rate of 10%. 2. British Columbia As of January 1, 2012, the provincial tax rates for British Columbia had not changed. \\ The income thresholds, personal amounts, and tax reduction values are indexed. The provincial indexing factor for 2012 is 2.4%. To calculate the indexed amounts, multiply the provincial income thresholds, appropriate personal amounts, and tax reduction values by 1.024. For more information on indexing, see page 14. \\ As of January 1, 2012, the income thresholds for British Columbia are as follows: \\ - 5.06% on income less than or equal to $37,013 (formerly $36,146); - 7.7% on income greater than $37,013, but less than or equal to $74,028 (formerly $72,293); - 10.50% on income greater than $74,028, but less than or equal to $84,993 (formerly $83,001); - 12.29% on income greater than $84,993, but less than or equal to $103,205 (formerly $100,787); and - 14.7% on income greater than $103,205. \\ Listed below are some of the revised non-refundable personal tax credits amounts for British Columbia. For complete information on personal amounts, see Form TD1BC. \\ - The basic personal amount is revised to $11,354 (formerly $11,088). - The spouse or common-law partner amount is revised to $9,964 (formerly $9,730). \\ Personal amounts will be multiplied by British Columbia's lowest non-zero tax rate of 5.06%. The provincial labour-sponsored funds tax credit (factor LCP) for British Columbia is still the lesser of $2,000 and 15% of the approved shares purchase. PAGE 9 Provincial tax reduction for British Columbia The provincial tax reduction for British Columbia is indexed and is calculated as follows: \\ - If net income is less than or equal to $17,913 (formerly $17,493), the reduction is equal to the lesser of (i) basic provincial tax, and (ii) $403 (formerly $394). - If net income is greater than $17,913 and less than or equal to $30,506.75 (formerly $29,805.50), the reduction is equal to the lesser of (i) basic provincial tax and (ii) $403 minus [(Annual net income minus $17,913) multiplied by 3.2%]. - If net income is greater than $30,506.75, there is no reduction. \\ 3. Manitoba The provincial tax rates and income thresholds for Manitoba have not changed: - 10.8% on income less than or equal to $31,000; - 12.75% on income greater than $31,000, but less than or equal to $67,000; and - 17.4% on income greater than $67,000. Listed below are some of the non-refundable personal tax credits amounts for Manitoba. For complete information on personal amounts, see Form TD1MB. - The basic personal amount stays at $8,634. - The spouse or common-law partner amount stays at $8,634. Personal amounts will be multiplied by Manitoba's lowest non-zero tax rate of 10.8%. The provincial labour-sponsored funds tax credit (factor LCP) for Manitoba is still the lesser of $1,800 and 15% of the approved shares purchase. 4. New Brunswick \\ The income thresholds and personal amounts are indexed. The provincial indexing factor for 2012 is 2.8%. To calculate the indexed amounts, multiply the provincial income thresholds and appropriate personal amounts by 1.028. For more information on indexing, see page 14. \\ As of January 1, 2012, the income thresholds and provincial tax rates for New Brunswick are as follows: \\ - 9.1% on income less than or equal to $38,190 (formerly $37,150); - 12.1% on income greater than $38,190, but less than or equal to $76,380 (formerly $74,300); - 12.4% on income greater than $76,380, but less than or equal to $124,178 (formerly $120,796); and - 14.3% (formerly 15.9%) on income greater than $124,178. \\ Listed below are some of the non-refundable personal tax credits amounts for New Brunswick. For complete information on personal amounts, see Form TD1NB. \\ - The basic personal amount is revised to $9,203 (formerly $8,953). - The spouse or common-law partner amount is revised to $7,815 (formerly $7,602). \\ Personal amounts will be multiplied by New Brunswick's lowest non-zero tax rate of 9.1%. The provincial labour-sponsored funds tax credit (factor LCP) for New Brunswick is still the lesser of $2,000 and 20% of the approved shares purchase. 5. Newfoundland and Labrador \\ For 2012, the provincial indexing factor for Newfoundland and Labrador is 3.1%. To calculate the indexed amounts, multiply the provincial income thresholds and appropriate personal amounts by 1.031. For more information on indexing, see page 14. \\ As of January 1, 2012, the provincial tax rates for Newfoundland and Labrador had not changed. The income thresholds for Newfoundland and Labrador are as follows: \\ - 7.7% on income less than or equal to $32,893 (formerly $31,904); PAGE 10 - 12.5% on income greater than $32,893, but less than or equal to $65,785 (formerly $63,807); and - 13.3% on income greater than $65,785. \\ Listed below are some of the non-refundable personal tax credits amounts for Newfoundland and Labrador. For complete information on personal amounts, see Form TD1NL. \\ - The basic personal amount is revised to $8,237 (formerly $7,989). - The spouse or common-law partner amount is revised to $6,731 (formerly $6,528). \\ Personal amounts will be multiplied by Newfoundland and Labrador's lowest non-zero tax rate of 7.7%. The provincial labour-sponsored funds tax credit (factor LCP) for Newfoundland and Labrador is still the lesser of $2,000 and 20% of the approved shares purchase. 6. Northwest Territories As of January 1, 2012, the territorial tax rates for the Northwest Territories had not changed. \\ The income thresholds and personal amounts are indexed. The indexing factor for 2012 is 2.8%. To calculate the indexed amounts, multiply the territorial income thresholds and appropriate personal amounts by 1.028. For more information on indexing, see page 14. \\ The income thresholds are as follows: \\ - 5.9% on income less than or equal to $38,679 (formerly $37,626); - 8.6% on income greater than $38,679, but less than or equal to $77,360 (formerly $75,253); - 12.2% on income greater than $77,360, but less than or equal to $125,771 (formerly $122,345); and - 14.05% on income greater than $125,771. \\ Listed below are some of the revised non-refundable personal tax credits amounts for the Northwest Territories. For complete information on personal amounts, see Form TD1NT. \\ - The basic personal amount is $13,280 (formerly $12,919). - The spouse or common-law partner amount is $13,280 (formerly $12,919). \\ Personal amounts will be multiplied by the Northwest Territories's lowest non-zero tax rate of 5.9%. \\ The territorial labour-sponsored funds tax credit (factor LCP) for the Northwest Territories is discontinued. \\ 7. Nova Scotia The provincial tax rates and income thresholds for Nova Scotia have not changed: - 8.79% on income less than or equal to $29,590; - 14.95% on income greater than $29,590, but less than or equal to $59,180; - 16.67% on income greater than $59,180, but less than or equal to $93,000; - 17.50% on income greater than $93,000 but less than or equal to $150,000; and - 21.00% (formerly 24.5%) on income greater than $150,000. Listed below are some of the non-refundable personal tax credits amounts for Nova Scotia. For complete information on personal amounts, see Form TD1NS. \\ - The basic personal amount is revised to $8,481 (formerly $8,731). - The spouse or common-law partner amount is revised to $7,201 (formerly $7,413). \\ Personal amounts will be multiplied by Nova Scotia's lowest non-zero tax rate of 8.79%. The provincial labour-sponsored funds tax credit (factor LCP) for Nova Scotia is still the lesser of $2,000 and 20% of the approved shares purchase. PAGE 11 8. Nunavut As of January 1, 2012, the territorial tax rates for Nunavut had not changed. The income thresholds and personal amounts are indexed. The indexing factor for 2012 is 2.8%. To calculate the indexed amounts, multiply the territorial income thresholds and appropriate personal amounts by 1.028. For more information on indexing, see page 14. The income thresholds are as follows: \\ - 4% on income less than or equal to $40,721 (formerly $39,612); - 7% on income greater than $40,721, but less than or equal to $81,442 (formerly $79,224); - 9% on income greater than $81,442, but less than or equal to $132,406 (formerly $128,800); and - 11.5% on income greater than $132,406. \\ Listed below are some of the non-refundable personal tax credits amounts for Nunavut. For complete information on personal amounts, see Form TD1NU. \\ - The basic personal amount is $12,211 (formerly $11,878). - The spouse or common-law partner amount is $12,211 (formerly $11,878). \\ Personal amounts will be multiplied by Nunavut's lowest non-zero tax rate of 4%. 9. Ontario As of January 1, 2012, the provincial tax rates for Ontario had not changed. \\ The income thresholds and personal amounts have been indexed. The provincial indexing factor for 2012 is 3.3%. To calculate the indexed amounts, multiply the provincial income thresholds and appropriate personal amounts by 1.033. For more information on indexing, see page 14. \\ Effective January 1, 2012, income thresholds for Ontario are as follows: \\ - 5.05% on income less than or equal to $39,020 (formerly $37,774); - 9.15% on income greater than $39,020, but less than or equal to $78,043 (formerly $75,550); and - 11.16% on income greater than $78,043. \\ Listed below are some of the non-refundable personal tax credits amounts for Ontario. For complete information on personal amounts, see Form TD1ON. \\ - The basic personal amount is $9,405 (formerly $9,104). - The spouse or common-law partner amount is $7,986 (formerly $7,730). \\ Personal amounts will be multiplied by Ontario's lowest non-zero tax rate of 5.05%. \\ The Ontario provincial surtax thresholds for 2012 are as follows: - Where the basic provincial tax payable (T4) is less than or equal to $4,213 (formerly $4,078), the surtax payable (V1) is $0. - Where the basic provincial tax payable (T4) is greater than $4,213 and less than or equal to $5,392 (formerly $5,219), the surtax payable (V1) is 20% of the basic provincial tax payable in excess of $4,213. - Where the basic provincial tax payable (T4) is greater than $5,392, the surtax payable (V1) is the total of 20% of the basic provincial tax payable in excess of $4,213 and 36% of the basic provincial tax payable in excess of $5,392. The provincial labour-sponsored funds tax credit (factor LCP) for Ontario is discontinued. \\ The Ontario health premium (OHP) is payable on annual taxable income of more than $20,000. It is designated by factor, V2. The OHP is as follows: - Where taxable income is less than or equal to $20,000, the premium is $0; - Where taxable income is greater than $20,000 and less than or equal to $36,000, the premium is equal to the lesser of (i) $300, and (ii) 6% of taxable income greater than $20,000; PAGE 12 - Where taxable income is greater than $36,000 and less than or equal to $48,000, the premium is equal to the lesser of (i) $450, and (ii) $300 plus 6% of taxable income greater than $36,000; - Where taxable income is greater than $48,000 and less than or equal to $72,000, the premium is equal to the lesser of (i) $600, and (ii) $450 plus 25% of taxable income greater than $48,000; - Where taxable income is greater than $72,000 and less than or equal to $200,000, the premium is equal to the lesser of (i) $750, and (ii) $600 plus 25% of taxable income greater than $72,000; and - Where taxable income is greater than $200,000, the premium is equal to the lesser of (i) $900, and (ii) $750 plus 25% of taxable income greater than $200,000. The OHP is not reduced by the Ontario tax reduction (factor S). The OHP is not related to the employer health tax for Ontario. Include the OHP in the total federal and provincial tax deducted on T4 slips. Provincial tax reduction for Ontario The provincial tax reduction for Ontario has changed due to provincial indexing. When possible, the employer or payer should implement the Y factor based on the total of the applicable amounts shown on the employee's or pensioner's TD1ON form. If the Y factor is not used, any over deduction of tax will be adjusted when the individual files an income tax and benefit return. The provincial tax reduction amounts for 2012 are as follows: \\ - $217 (formerly $210) for the basic personal amount; - $401 (formerly $389) for each dependant under age 19*; and - $401 (formerly $389) for each dependant with a disability that the employee or pensioner has claimed on Form TD1ON. \\ * Since the tax reduction for dependants under age 19 is not shown on Form TD1ON, the employee or pensioner will have to provide the employer or payer with a written request to include such amounts. The reduction is still equal to twice the individual's personal amounts minus the Ontario income tax. The reduction cannot be more than the Ontario income tax otherwise payable. The reduction is nil when that tax is more than twice the personal amounts. 10. Prince Edward Island The provincial tax rates and income thresholds for Prince Edward Island (P.E.I.) remain as follows: - 9.8% on income less than or equal to $31,984; - 13.8% on income greater than $31,984, but less than or equal to $63,969; and - 16.7% on income greater than $63,969. Listed below are some of the non-refundable personal tax credits amounts for P.E.I. For complete information on personal amounts, see Form TD1PE: - The basic personal amount is still $7,708. - The spouse or common-law partner amount is still $6,546. Personal amounts will be multiplied by P.E.I.'s lowest non-zero tax rate of 9.8%. The provincial surtax payable for P.E.I. is still as follows: - Where the basic provincial tax payable (T4) is less than or equal to $12,500, the surtax payable (V1) is $0. - Where the basic provincial tax payable (T4) is greater than $12,500, the surtax payable (V1) is 10% of the basic provincial tax payable in excess of $12,500. 11. Quebec There is no change to the 16.5% Quebec tax abatement rate for 2012. PAGE 13 12. Saskatchewan As of January 1, 2012, the provincial tax rates for Saskatchewan had not changed. \\ The income thresholds and personal amounts for Saskatchewan are indexed. The indexing factor for 2012 is 2.8%. To calculate the indexed amounts, multiply the provincial income thresholds and appropriate personal amounts by 1.028. For more information on indexing, see page 14. \\ The income thresholds are as follows: \\ - 11% on income less than or equal to $42,065 (formerly $40,919); - 13% on income greater than $42,065, but less than or equal to $120,185 (formerly $116,911); and - 15% on income greater than $120,185. \\ Listed below are some of the non-refundable personal tax credits amounts for Saskatchewan. For complete information on personal amounts, see Form TD1SK. \\ - The basic personal amount is $14,942 (formerly $14,535). - The spouse or common-law partner amount is $14,942 (formerly $14,535). - The child amount is $5,668 (formerly $5,514). \\ Personal amounts will be multiplied by Saskatchewan's lowest non-zero tax rate of 11%. The provincial labour-sponsored funds tax credit (factor LCP) for Saskatchewan is still the lesser of $1,000 and 20% of the approved shares purchase. 13. Yukon As of January 1, 2012, the territorial tax rates for Yukon have not changed. \\ The income thresholds and personal amounts are indexed. The indexing factor for 2012 is 2.8%. To calculate the indexed amounts, multiply the territorial income thresholds and appropriate personal amounts by 1.028. For more information on indexing, see page 14. \\ The income thresholds are as follows: \\ - 7.04% on income less than or equal to $42,707 (formerly $41,544); - 9.68% on income greater than $42,707, but less than or equal to $85,414 (formerly $83,088); - 11.44% on income greater than $85,414, but less than or equal to $132,406 (formerly $128,800); and - 12.76% on income greater than $132,406. Yukon's territorial Canada employment credit, designated as factor K4P, has been increased to $1,095 (formerly $1,065). \\ Yukon will again be harmonized with all federal personal amounts. Listed below are some of the revised non-refundable personal tax credits amounts for Yukon. For complete information on personal amounts, see Form TD1YT. \\ - The basic personal amount is $10,822 (formerly $10,527). - The spouse or common-law partner amount is $10,822 (formerly $10,527). \\ Personal amounts will be multiplied by the territory's lowest non-zero tax rate of 7.04%. The surtax payable for Yukon is still as follows: - Where the basic territorial tax payable (T4) is less than or equal to $6,000, the surtax payable (V1) is $0. - Where the basic territorial tax payable (T4) is greater than $6,000, the surtax payable (V1) is 5% of the basic territorial tax payable in excess of $6,000. The territorial labour-sponsored funds tax credit (factor LCP) for Yukon is still the lesser of $1,250 and 25% of the approved shares purchase. PAGE 14 Personal tax credits returns (TD1 forms) Federal Form TD1, 2012 Personal Tax Credits Return \\ The federal Form TD1 was revised for 2012. General refiling of the 2012 federal Form TD1 is not necessary, but a new employee, a new pensioner, or an individual who wants to change his or her federal claim amounts will have to complete the revised form. \\ The federal claim codes are in Chart 1 of the publication Payroll Deductions Tables and in this publication under the heading "Federal, provincial, and territorial claim codes," on page 15. A separate worksheet, TD1-WS, is available for employees or pensioners who want to calculate partial claims for some of the federal personal tax credits amounts. Indexing of personal amounts Each year, certain personal tax credit amounts are subject to indexing based on changes to the consumer price index. Since only some of the amounts are indexed, we recommend that you record separately in your payroll records each item shown on the employee's or pensioner's TD1 form. This will allow you to automatically increase the applicable indexed claim amounts when necessary. This also means you will not have to ask your employees or pensioners to file a new TD1 form when indexing applies. You can use the following method to calculate the value of TC or TCP (personal tax credits amount) when indexing applies: Line 1: Enter the total claim amount reported on TD1 form $^ Line 2: Minus: any pension income amount, tuition fees, and full- or part- time education amounts claimed on the TD1 form* $^ Line 3: Amount subject to annual indexing (line 1 minus line 2) $^ Line 4: Enter the indexing factor that applies for the year see** Line 5: Multiply line 3 by line 4 (rounded to the nearest dollar) $^ Line 6: Enter the amount from line 2 (non-indexed amounts) $^ Line 7: Revised factor TC or TCP (total of personal tax credits amounts) (line 5 plus line 6) $^ * For Alberta and Ontario only, do not include any amounts on line 2, since all Alberta and Ontario credits are subject to indexing. \\ ** The federal indexing factor for 2012 is 1.028. A factor of 1.028 also applies to New Brunswick, Northwest Territories, Nunavut, Saskatchewan and Yukon. Some changes to Yukon personal amounts are not directly attributable to indexing, because they have harmonized amounts with the federal values. No indexing applies to Nova Scotia, Prince Edward Island, or Manitoba. ** Indexing factors for other provinces are as follows: Alberta - 1.018 British Columbia - 1.024 Newfoundland and Labrador - 1.031 Ontario - 1.033 \\ Provincial and territorial TD1 forms We provide a 2012 TD1 form for each province (except Quebec) and territory. Employees should complete the provincial or territorial TD1 form that corresponds to their province or territory of employment. Pensioners should complete the provincial or territorial TD1 form that corresponds to their province or territory of residence. New employees, new pensioners, and employees or pensioners who want to change their personal tax credits amounts must complete the federal form and the applicable provincial or territorial form. An employee who changes PAGE 15 province or territory of employment or a pensioner who moves to another province or territory should complete the appropriate provincial or territorial form. An employee who lives in one province or territory but works in another one may be subject to excessive tax deductions. If so, he or she can ask for a reduction in tax deductions by requesting a letter of authority from any tax services office. For more information, see Chapter 4 of the employers' guide called Payroll Deductions and Remittances. Claim codes Basic personal amounts and employment income from all sources You have to deduct tax according to the claim code that corresponds to the claim amount on line 13 of the TD1 form. If an employee states that his or her total expected income will be less than the "Total claim amount" on line 13 of a TD1 form, do not deduct any federal, provincial, or territorial tax, as applicable. However, as an employer, if you know that the employee's statement is false, you must deduct federal and provincial or territorial tax from the employee's salary. It is a serious offence to accept a TD1 form that you know contains false or misleading statements. If you are not sure whether or not a statement you receive on a TD1 form is false, contact your tax services office for advice. Claim code 0 This code represents no claim amount allowed. If the federal claim code is 0 because the employee is a non-resident, the provincial claim code must also be 0. Federal, provincial, and territorial claim codes Some provincial/territorial claim code amounts will not correspond to the federal claim code amounts. You will not find claim code amounts on Form TD1. Below is a listing of claim codes and amount ranges. *** Transcriber's Note: In print, for the following 2012 Federal claim codes, the format was set-up as 4 columns labelled as: Claim code; Total claim amount ($); Option 1, TC = ; Option 1, K1 =. *** \\\ \\ 2012 Federal claim codes Claim code: Code 0 Total claim: No claim amount Option 1, TC = $0.00 Option 1, K1 = $0.00 Code 1 Total claim: Minimum - 10,822.00 Option 1, TC = 10,822.00 Option 1, K1 = 1,623.30 Code 2 Total claim: 10,822.01 - 12,890.00 Option 1, TC = 11,856.00 Option 1, K1 = 1,778.40 Code 3 Total claim: 12,890.01 - 14,958.00 Option 1, TC = 13,924.00 Option 1, K1 = 2,088.60 Code 4 Total claim: 14,958.01 - 17,026.00 Option 1, TC = 15,992.00 Option 1, K1 = 2,398.80 Code 5 Total claim: 17,026.01 - 19,094.00 Option 1, TC = 18,060.00 Option 1, K1 = 2,709.00 Code 6 Total claim: 19,094.01 - 21,162.00 Option 1, TC = 20,128.00 Option 1, K1 = 3,019.20 Code 7 Total claim: 21,162.01 - 23,230.00 Option 1, TC = 22,196.00 Option 1, K1 = 3,329.40 Code 8 Total claim: 23,230.01 - 25,298.00 Option 1, TC = 24,264.00 Option 1, K1 = 3,639.60 Code 9 Total claim: 25,298.01 - 27,366.00 Option 1, TC = 26,332.00 Option 1, K1 = 3,949.80 Code 10 Total claim: 27,366.01 - 29,434.00 Option 1, TC = 28,400.00 Option 1, K1 = 4,260.00 \\\ \\ PAGE 16 \\\ \\ 2012 Alberta claim codes Claim code: Code 0 Total claim: No claim amount Option 1, TCP = $0.00 Option 1, K1P = $0.00 Code 1 Total claim: Minimum - 17282.00 Option 1, TCP = 17,282.00 Option 1, K1P = 1,728.20 Code 2 Total claim: 17,282.01 - 19,810.00 Option 1, TCP = 18,546.00 Option 1, K1P = 1,854.60 Code 3 Total claim: 19,810.01 - 22,338.00 Option 1, TCP = 21,074.00 Option 1, K1P = 2,107.40 Code 4 Total claim: 22,338.01 - 24,866.00 Option 1, TCP = 23,602.00 Option 1, K1P = 2,360.20 Code 5 Total claim: 24,866.01 - 27,394.00 Option 1, TCP = 26,130.00 Option 1, K1P = 2,613.00 Code 6 Total claim: 27,394.01 - 29,922.00 Option 1, TCP = 28,658.00 Option 1, K1P = 2,865.80 Code 7 Total claim: 29,922.01 - 32,450.00 Option 1, TCP = 31,186.00 Option 1, K1P = 3,118.60 Code 8 Total claim: 32,450.01 - 34,978.00 Option 1, TCP = 33,714.00 Option 1, K1P = 3,371.40 Code 9 Total claim: 34,978.01 - 37,506.00 Option 1, TCP = 36,242.00 Option 1, K1P = 3,624.20 Code 10 Total claim: 37,506.01 - 40,034.00 Option 1, TCP = 38,770.00 Option 1, K1P = 3,877.00 \\\ \\ \\\ \\ 2012 British Columbia claim codes Claim code: Code 0 Total claim: No claim amount Option 1, TCP = $0.00 Option 1, K1P = $0.00 Code 1 Total claim: Minimum - 11,354.00 Option 1, TCP = 11,354.00 Option 1, K1P = 574.51 Code 2 Total claim: 11,354.01 - 13,540.00 Option 1, TCP = 12,447.00 Option 1, K1P = 629.82 Code 3 Total claim: 13,540.01 - 15,726.00 Option 1, TCP = 14,633.00 Option 1, K1P = 740.43 Code 4 Total claim: 15,726.01 - 17,912.00 Option 1, TCP = 16,819.00 Option 1, K1P = 851.04 Code 5 Total claim: 17,912.01 - 20,098.00 Option 1, TCP = 19,005.00 Option 1, K1P = 961.65 Code 6 Total claim: 20,098.01 - 22,284.00 Option 1, TCP = 21,191.00 Option 1, K1P = 1,072.26 Code 7 Total claim: 22,284.01 - 24,470.00 Option 1, TCP = 23,377.00 Option 1, K1P = 1,182.88 Code 8 Total claim: 24,470.01 - 26,656.00 Option 1, TCP = 25,563.00 Option 1, K1P = 1,293.49 Code 9 Total claim: 26,656.01 - 28,842.00 Option 1, TCP = 27,749.00 Option 1, K1P = 1,404.10 Code 10 Total claim: 28,842.01 - 31,028.00 Option 1, TCP = 29,935.00 Option 1, K1P = 1,514.71 \\\ \\ \\\ 2012 Manitoba claim codes Claim code: Code 0 Total claim: No claim amount Option 1, TCP = $0.00 Option 1, K1P = $0.00 Code 1 Total claim: Minimum - 8,634.00 Option 1, TCP = 8,634.00 Option 1, K1P = 932.47 Code 2 Total claim: 8,634.01 - 10,327.00 Option 1, TCP = 9,480.50 Option 1, K1P = 1,023.89 Code 3 Total claim: 10,327.01 - 12,020.00 Option 1, TCP = 11,173.50 Option 1, K1P = 1,206.74 Code 4 Total claim: 12,020.01 - 13,713.00 Option 1, TCP = 12,866.50 Option 1, K1P = 1,389.58 Code 5 Total claim: 13,713.01 - 15,406.00 Option 1, TCP = 14,559.50 Option 1, K1P = 1,572.43 Code 6 Total claim: 15,406.01 - 17,099.00 Option 1, TCP = 16,252.50 Option 1, K1P = 1,755.27 Code 7 Total claim: 17,099.01 - 18,792.00 Option 1, TCP = 17,945.50 Option 1, K1P = 1,938.11 Code 8 Total claim: 18,792.01 - 20,485.00 Option 1, TCP = 19,638.50 Option 1, K1P = 2,120.96 Code 9 Total claim: 20,485.01 - 22,178.00 Option 1, TCP = 21,831.50 Option 1, K1P = 2,303.80 Code 10 Total claim: 22,178.01 - 23,871.00 Option 1, TCP = 23,024.50 Option 1, K1P = 2,486.65 \\\ PAGE 17 \\\ \\ 2012 New Brunswick claim codes Claim code: Code 0 Total claim: No claim amount Option 1, TCP = $0.00 Option 1, K1P = $0.00 Code 1 Total claim: Minimum - 9,203.00 Option 1, TCP = 9,203.00 Option 1, K1P = 837.47 Code 2 Total claim: 9,203.01 - 11,244.00 Option 1, TCP = 10,223.50 Option 1, K1P = 930.34 Code 3 Total claim: 11,244.01 - 13,285.00 Option 1, TCP = 12,264.50 Option 1, K1P = 1,116.07 Code 4 Total claim: 13,285.01 - 15,326.00 Option 1, TCP = 14,305.50 Option 1, K1P = 1,301.80 Code 5 Total claim: 15,326.01 - 17,367.00 Option 1, TCP = 16,346.50 Option 1, K1P = 1,487.53 Code 6 Total claim: 17,367.01 - 19,408.00 Option 1, TCP = 18,387.50 Option 1, K1P = 1,673.26 Code 7 Total claim: 19,408.01 - 21,449.00 Option 1, TCP = 20,428.50 Option 1, K1P = 1,858.99 Code 8 Total claim: 21,449.01 - 23,490.00 Option 1, TCP = 22,469.50 Option 1, K1P = 2,044.72 Code 9 Total claim: 23,490.01 - 25,531.00 Option 1, TCP = 24,510.50 Option 1, K1P = 2,230.46 Code 10 Total claim: 25,531.01 - 27,572.00 Option 1, TCP = 26,551.50 Option 1, K1P = 2,416.19 \\\ \\ \\\ \\ 2012 Newfoundland and Labrador claim codes Claim code: Code 0 Total claim: No claim amount Option 1, TCP = $0.00 Option 1, K1P = $0.00 Code 1 Total claim: Minimum - 8,237.00 Option 1, TCP = 8,237.00 Option 1, K1P = 634.25 Code 2 Total claim: 8,237.01 - 10,016.00 Option 1, TCP = 9,126.50 Option 1, K1P = 702.74 Code 3 Total claim: 10,016.01 - 11,795.00 Option 1, TCP = 10,905.50 Option 1, K1P = 839.72 Code 4 Total claim: 11,795.01 - 13,574.00 Option 1, TCP = 12,684.50 Option 1, K1P = 976.71 Code 5 Total claim: 13,574.01 - 15,353.00 Option 1, TCP = 14,463.50 Option 1, K1P = 1,113.69 Code 6 Total claim: 15,353,01 - 17,132.00 Option 1, TCP = 16,242.50 Option 1, K1P = 1,250.67 Code 7 Total claim: 17,132.01 - 18,911.00 Option 1, TCP = 18,021.50 Option 1, K1P = 1,387.66 Code 8 Total claim: 18,911.01 - 20,690.00 Option 1, TCP = 19,800.50 Option 1, K1P = 1,524.64 Code 9 Total claim: 20,690.01 - 22,469.00 Option 1, TCP = 21,579.50 Option 1, K1P = 1,661.62 Code 10 Total claim: 22,469.01 - 24,248.00 Option 1, TCP = 23,358.50 Option 1, K1P = 1,798.60 \\\ \\ \\\ \\ 2012 Northwest Territories claim codes Claim code: Code 0 Total claim: No claim amount Option 1, TCP = $0.00 Option 1, K1P = $0.00 Code 1 Total claim: Minimum - 13,280.00 Option 1, TCP = 13,280.00 Option 1, K1P = 783.52 Code 2 Total claim: 13,280.01 - 15,564.00 Option 1, TCP = 14,422.00 Option 1, K1P = 850.90 Code 3 Total claim: 15,564.01 - 17,848.00 Option 1, TCP = 16,706.00 Option 1, K1P = 985.65 Code 4 Total claim: 17,848.01 - 20,132.00 Option 1, TCP = 18,990.00 Option 1, K1P = 1,120.41 Code 5 Total claim: 20,132.01 - 22,416.00 Option 1, TCP = 21,274.00 Option 1, K1P = 1,255.17 Code 6 Total claim: 22,416.01 - 24,700.00 Option 1, TCP = 23,558.00 Option 1, K1P = 1,389.92 Code 7 Total claim: 24,700.01 - 26,984.00 Option 1, TCP = 25,842.00 Option 1, K1P = 1,524.68 Code 8 Total claim: 26,984.01 - 29,268.00 Option 1, TCP = 28,126.00 Option 1, K1P = 1,659.43 Code 9 Total claim: 29,268.01 - 31,552.00 Option 1, TCP = 30,410.00 Option 1, K1P = 1,794.19 Code 10 Total claim: 31,552.01 - 33,836.00 Option 1, TCP = 32,694.00 Option 1, K1P = 1,928.95 \\\ \\ PAGE 18 \\\ \\2012 Nova Scotia claim codes Claim code: Code 0 Total claim: No claim amount Option 1, TCP = $0.00 Option 1, K1P = $0.00 Code 1 Total claim: Minimum - 8,481.00 Option 1, TCP = 8,481.00 Option 1, K1P = 745.48 Code 2 Total claim: 8,481.01 - 10,081.00 Option 1, TCP = 9,281.00 Option 1, K1P = 815.80 Code 3 Total claim: 10,081.01 - 11,681.00 Option 1, TCP = 10,881.00 Option 1, K1P = 956.44 Code 4 Total claim: 11,681.01 - 13,281.00 Option 1, TCP = 12,481.00 Option 1, K1P = 1,097.08 Code 5 Total claim: 13,281.01 - 14,881.00 Option 1, TCP = 14,081.00 Option 1, K1P = 1,237.72 Code 6 Total claim: 14,881.01 - 16,481.00 Option 1, TCP = 15,681.00 Option 1, K1P = 1,378.36 Code 7 Total claim: 16,481.01 - 18,081.00 Option 1, TCP = 17,281.00 Option 1, K1P = 1,519.00 Code 8 Total claim: 18,081.01 - 19,681.00 Option 1, TCP = 18,881.00 Option 1, K1P = 1,659.64 Code 9 Total claim: 19,681.01 - 21,281.00 Option 1, TCP = 20,481.00 Option 1, K1P = 1,800.28 Code 10 Total claim: 21,281.01 - 22,881.00 Option 1, TCP = 22,081.00 Option 1, K1P = 1,940.92 \\\ \\ \\\ \\ 2012 Nunavut claim codes Claim code: Code 0 Total claim: No claim amount Option 1, TCP = $0.00 Option 1, K1P = $0.00 Code 1 Total claim: Minimum - 12,211.00 Option 1, TCP = 12,211.00 Option 1, K1P = 488.44 Code 2 Total claim: 12,211.01 - 14,531.00 Option 1, TCP = 13,371.00 Option 1, K1P = 534.84 Code 3 Total claim: 14,531.01 - 16,851.00 Option 1, TCP = 15,691.00 Option 1, K1P = 627.64 Code 4 Total claim: 16,851.01 - 19,171.00 Option 1, TCP = 18,011.00 Option 1, K1P = 720.44 Code 5 Total claim: 19,171.01 - 21,491.00 Option 1, TCP = 20,331.00 Option 1, K1P = 813.24 Code 6 Total claim: 21,491.01 - 23,811.00 Option 1, TCP = 22,651.00 Option 1, K1P = 906.04 Code 7 Total claim: 23,811.01 - 26,131.00 Option 1, TCP = 24,971.00 Option 1, K1P = 998.84 Code 8 Total claim: 26,131.01 - 28,451.00 Option 1, TCP = 27,291.00 Option 1, K1P = 1,091.64 Code 9 Total claim: 28,451.01 - 30,771.00 Option 1, TCP = 29,611.00 Option 1, K1P = 1,184.44 Code 10 Total claim: 30,771.01 - 33,091.00 Option 1, TCP = 31,931.00 Option 1, K1P = 1,277.24 \\\ \\ \\\ \\ 2012 Ontario claim codes Claim code: Code 0 Total claim: No claim amount Option 1, TCP = $0.00 Option 1, K1P = $0.00 Code 1 Total claim: Minimum - 9,405.00 Option 1, TCP = 9,405.00 Option 1, K1P = 474.95 Code 2 Total claim: 9,405.01 - 11,431.00 Option 1, TCP = 10,418.00 Option 1, K1P = 526.11 Code 3 Total claim: 11,431.01 - 13,457.00 Option 1, TCP = 12,444.00 Option 1, K1P = 628.42 Code 4 Total claim: 13,457.01 - 15,483.00 Option 1, TCP = 14,470.00 Option 1, K1P = 730.74 Code 5 Total claim: 15,483.01 - 17,509.00 Option 1, TCP = 16,496.00 Option 1, K1P = 833.05 Code 6 Total claim: 17,509.01 - 19,535.00 Option 1, TCP = 18,522.00 Option 1, K1P = 935.36 Code 7 Total claim: 19,535.01 - 21,561.00 Option 1, TCP = 20,548.00 Option 1, K1P = 1,037.67 Code 8 Total claim: 21,561.01 - 23,587.00 Option 1, TCP = 22,574.00 Option 1, K1P = 1,139.99 Code 9 Total claim: 23,587.01 - 25,613.00 Option 1, TCP = 24,600.00 Option 1, K1P = 1,242.30 Code 10 Total claim: 25,613.01 - 27,639.00 Option 1, TCP = 26,626.00 Option 1, K1P = 1,344.61 \\\ \\ PAGE 19 \\\ 2012 Prince Edward Island claim codes Claim code: Code 0 Total claim: No claim amount Option 1, TCP = $0.00 Option 1, K1P = $0.00 Code 1 Total claim: Minimum - 7,708.00 Option 1, TCP = 7,708.00 Option 1, K1P = 755.38 Code 2 Total claim: 7,708.01 - 9,308.00 Option 1, TCP = 8,508.00 Option 1, K1P = 833.78 Code 3 Total claim: 9,308.01 - 10,908.00 Option 1, TCP = 10,108.00 Option 1, K1P = 990.58 Code 4 Total claim: 10,908.01 - 12,508.00 Option 1, TCP = 11,708.00 Option 1, K1P = 1,147.38 Code 5 Total claim: 12,508.01 - 14,108.00 Option 1, TCP = 13,308.00 Option 1, K1P = 1,304.18 Code 6 Total claim: 14,108.01 - 15,708.00 Option 1, TCP = 14,908.00 Option 1, K1P = 1,460.98 Code 7 Total claim: 15,708.01 - 17,308.00 Option 1, TCP = 16,508.00 Option 1, K1P = 1,617.78 Code 8 Total claim: 17,308.01 - 18,908.00 Option 1, TCP = 18,108.00 Option 1, K1P = 1,774.58 Code 9 Total claim: 18,908.01 - 20,508.00 Option 1, TCP = 19,708.00 Option 1, K1P = 1,931.38 Code 10 Total claim: 20,508.01 - 22,108.00 Option 1, TCP = 21,308.00 Option 1, K1P = 2,088.18 \\\ \\\ \\ 2012 Saskatchewan claim codes Claim code: Code 0 Total claim: No claim amount Option 1, TCP = $0.00 Option 1, K1P = $0.00 Code 1 Total claim: Minimum - 14,942.00 Option 1, TCP = 14,942.00 Option 1, K1P = 1,643.62 Code 2 Total claim: 14,942.01 - 16,865.00 Option 1, TCP = 15,903.50 Option 1, K1P = 1,749.39 Code 3 Total claim: 16,865.01 - 18,788.00 Option 1, TCP = 17,826.50 Option 1, K1P = 1,960.92 Code 4 Total claim: 18,788.01 - 20,711.00 Option 1, TCP = 19,749.50 Option 1, K1P = 2,172.45 Code 5 Total claim: 20,711.01 - 22,634.00 Option 1, TCP = 21,672.50 Option 1, K1P = 2,383.98 Code 6 Total claim: 22,634.01 - 24,557.00 Option 1, TCP = 23,595.50 Option 1, K1P = 2,595.51 Code 7 Total claim: 24,557.01 - 26,480.00 Option 1, TCP = 25,518.50 Option 1, K1P = 2,807.04 Code 8 Total claim: 26,480.01 - 28,403.00 Option 1, TCP = 27,441.50 Option 1, K1P = 3,018.57 Code 9 Total claim: 28,403.01 - 30,326.00 Option 1, TCP = 29,364.50 Option 1, K1P = 3,230.10 Code 10 Total claim: 30,326.01 - 32,249.00 Option 1, TCP = 31,287.50 Option 1, K1P = 3,441.63 \\\ \\ \\\ \\ 2012 Yukon claim codes Claim code: Code 0 Total claim: No claim amount Option 1, TCP = $0.00 Option 1, K1P = $0.00 Code 1 Total claim: Minimum - 10,822.00 Option 1, TCP = 10,822.00 Option 1, K1P = 761.87 Code 2 Total claim: 10,822.01 - 12,890.00 Option 1, TCP = 11,856.00 Option 1, K1P = 834.66 Code 3 Total claim: 12,890.01 - 14,958.00 Option 1, TCP = 13,924.00 Option 1, K1P = 980.25 Code 4 Total claim: 14,958.01 - 17,026.00 Option 1, TCP = 15,992.00 Option 1, K1P = 1,125.84 Code 5 Total claim: 17,026.01 - 19,094.00 Option 1, TCP = 18,060.00 Option 1, K1P = 1,271.42 Code 6 Total claim: 19,094.01 - 21,162.00 Option 1, TCP = 20,128.00 Option 1, K1P = 1,417.01 Code 7 Total claim: 21,162.01 - 23,230.00 Option 1, TCP = 22,196.00 Option 1, K1P = 1,562.60 Code 8 Total claim: 23,230.01 - 25,298.00 Option 1, TCP = 24,264.00 Option 1, K1P = 1,708.19 Code 9 Total claim: 25,298.01 - 27,366.00 Option 1, TCP = 26,332.00 Option 1, K1P = 1,853.77 Code 10 Total claim: 27,366.01 - 29,434.00 Option 1, TCP = 28,400.00 Option 1, K1P = 1,999.36 \\\ \\ PAGE 20 Tax deductions from commission income Form TD1X, Statement of Commission Income and Expenses for Payroll Tax Deductions Form TD1X has not changed for 2012. The form is for federal, as well as provincial and territorial tax purposes. Remitting and reporting federal and provincial or territorial tax deductions Payroll remittances (Form PD7A, Statement of Account for Current Source Deductions) Report the combined federal and provincial or territorial tax deductions on payroll remittance forms. Also, make periodic remittances to us of federal and provincial or territorial tax, Canada Pension Plan contributions, and employment insurance premiums. Pay statements and T4 slips, Statement of Remuneration Paid Show the combined federal and provincial or territorial tax deductions on your pay statements. Also, file only one T4 slip per employee no later than the last day of February of each year. The T4 slip will show combined federal and provincial or territorial tax deductions. Letters of authority We will continue to issue letters of authority to reduce federal and provincial or territorial tax deductions, for example, for support payments. General information Any deviation from the formulas If you deviate from the formulas, rates, and constants that we provide, other than for converting to the related pay period, you have to send the related details to your tax services office or tax centre for approval. Rounding procedures For all mathematical calculations in this publication, use the following rounding rules except where we specify otherwise. For income tax deductions If the figure calculated for an employee's income tax deduction for a certain pay period has three or more digits after the decimal point, increase the second digit after the decimal point by one if the third digit is five or greater, and drop the third digit. If the third digit after the decimal point is less than five, drop the third digit. For Canada Pension Plan (CPP) basic exemption and contributions Determine an employee's basic exemption for a pay period by dividing the annual basic exemption by the number of pay periods in the calendar year. If the figure has three or more digits after the decimal point, drop the third digit after the decimal point. When the employee's contribution to CPP for the pay period has three or more digits after the decimal point, increase the second digit after the decimal point by one if the third digit is five or more, and drop the third digit. If the third digit after the decimal point is less than five, drop the third digit. PAGE 21 For employment insurance (EI) premiums When the employee's or employer's EI premium for the pay period has three or more digits after the decimal point, increase the second digit by one if the third digit is five or more, and drop the third digit. If the third digit after the decimal point is less than five, drop the third digit. Mathematical symbol definitions The mathematical symbols we use in this publication and their definitions are as follows: Symbol Definition is greater than is less than is greater than or equal to is less than or equal to division multiplied by multiplication Parentheses and brackets indicate that the quantities enclosed are calculated before the rest of the formula. Tax deductions comparison When the tax deductions amount using Option 1 in this publication is compared to the tax deductions amount contained in the Payroll Deductions Tables (T4032), the amounts will not necessarily be identical. Any difference results from the fact that amounts in the Payroll Deductions Tables are based on: (i) the mid-point of the range of remuneration under the "Pay" column; (ii) the federal tax credit for Canada Pension Plan or Quebec Pension Plan contributions and employment insurance premium deductions is based on the amount determined in item (i); and (iii) the midpoint of the "Claim code" amounts on federal, provincial, and territorial TD1 forms is used, except for code 1 where the actual basic personal non-refundable tax credit amount is used. For claim code 0, no personal tax credits amounts are used when calculating the tax deduction amounts. Lump-sum payments Composite tax rates to be used for lump-sum payments are provided in the employers' guide called Deducting Income Tax on Pension and Other Income, and Filing the T4A Slip and Summary, in the section called "Withholding rates for lump-sum payments." Depending on the total income, the composite rates are given as 10%, 20%, and 30% (5%, 10%, and 15% in Quebec). Frequently, the tax rates above will not produce the proper amount of tax payable on the lump-sum payment. This difference occurs because there are various federal, provincial, and territorial income thresholds, as well as provincial or territorial surtaxes and tax reductions. To avoid deficient or excess tax deductions that can result from lump-sum payments, you can, as an alternative, use the tax calculation for non-periodic payments contained in Option 1. Registered retirement income fund The following is our position on how the trustee of a registered retirement income fund (RRIF) should calculate the amount of tax to deduct when amounts above the minimum are paid out in the year. We consider all periodic payments made from a RRIF, following an election to make withdrawals that are above the yearly minimum, to be blended payments. In such cases, an elected part is subject to tax deductions. Use the withholding rates for lump-sum payments to determine the amount of tax to deduct. The withholding rates for lump-sum payments will also apply when an individual makes a lump-sum withdrawal that is greater than the minimum during the year. Registered retirement savings plans Contributions you make to an employee's registered retirement savings plan (RRSP) and RRSP administration fees that you pay for your employee are considered to be a taxable benefit to the employee. This does not include an amount you withheld from the employee's remuneration and contributed for the employee. PAGE 22 If goods and services tax/harmonized sales tax applies to the administration fees, include it in the value of the benefit. Payroll deductions RRSP taxable benefits are pensionable and insurable. Deduct CPP contributions and EI premiums. Your contributions to the employee's RRSP are considered non-cash benefits and are not insurable in cases where the employees cannot withdraw the amounts from a group RRSP until they retire or stop being employed. If you allow the employee to withdraw RRSP funds under the Home Buyers' Plan or Lifelong Learning Plan, we consider the contributions to be non-cash benefits. Although benefits are taxable and have to be reported on a T4 slip, you do not have to deduct income tax at source on the contributions you make to an employee's RRSP. However, you must have reasonable grounds to believe that the employee can deduct the contributions for the year. Information returns You will need to complete separate T4 slips when an employee has worked in more than one province during the year. For instructions on which tax tables to use, see the publication called Payroll Deductions Tables, under the heading, "Which provincial or territorial tax table should you use?" Information returns electronic filing For more information, please visit our Web site at: www.cra.gc.ca/eservices. Use and requirement of social insurance number An individual (employee or pensioner) has to provide a social insurance number (SIN) to an employer or payer. An employer or payer has to make a reasonable effort to get a SIN from an individual. An individual without a SIN has to apply for one at the nearest Service Canada office within 15 days of the date the employer or payer asks for a SIN. After receiving a SIN, an individual has 15 days to provide it to the employer or payer. An individual who, for any reason, does not comply with these requirements is liable to a fine or penalty for each failure. An employer or payer who fails to provide a SIN on an information slip is also liable to a fine or penalty. An employer or payer, who knowingly uses, communicates, or allows a SIN to be communicated for any purpose other than that for which it was provided is guilty of an offence and is liable to a fine or imprisonment, or both. If an individual fails to respond to a request for a SIN, leave the SIN field of the information slip (for example, a T4 or a T4A) blank until the SIN is provided. If an individual refuses to provide a SIN, the information slips prepared should contain all zeros (000-000-000) in the SIN field. For more information about the use and requirement of the SIN, see our Information Circular IC82-2, Social Insurance Number Legislation That Relates to the Preparation of Information Slips. Validating a social insurance number Service Canada uses the social insurance number (SIN) and employee information we provide them to maintain accurate records of employee contributions and earnings. To minimize the enquiries you receive, we recommend that you include a SIN validity check as part of your payroll program. A SIN has nine digits. The first eight digits are the basic number while the ninth digit is a check digit. You can check whether or not a SIN is valid by using the following verification method. Example The employee provides social insurance number 193-456-787. You can check the validity of the number by calculating the check digit as follows: PAGE 23 Basic number (first eight digits) 193 456 78 (check digit) 7 Make a number from each alternate position to the left beginning at the second digit 9 4 6 8 Add the number to itself 9 4 6 8 Sum 18 8 12 16 Cross-add the digits in the sum (1 + 8 + 8 + 1 + 2 + 1 + 6) = 27 Add each alternate digit beginning at the first digit (1 + 3 + 5 + 7) = 16 Total (27 + 16) = 43 If the total is a multiple of 10, the check digit should be 0; otherwise, subtract the total calculated (43) from the next highest number ending in zero (50) 50 The check digit is (50 minus 43) = 7 Social insurance numbers that do not pass the validation check If the SIN provided by an individual does not pass the verification check, the preparer should confirm the SIN with the employer who received the original number. If you cannot get the correct number for the employee, do not leave the SIN field on the information slip blank. Instead, report the SIN that was provided, even if it is not a valid number. Frequently, even an incorrect number will enable us to find a match so that we can correct the record and make sure that the employee receives proper credit for the deductions. Validating a business number A business number (BN) is a nine-digit registration number and account identifier, for example: 12345 6782 RP0001. You can check the validity of the registration part of a BN by using the same standard formula used for a social insurance number. For validation purposes, use only the first nine digits of a BN. Part A - Formulas to determine tax deductions on salary, wages, taxable benefits, pension income, commissions, and other non-periodic payments Option 1 - General tax formula The general formula in this option determines the federal and provincial or territorial tax deductions on salary, wages, taxable benefits, pension income, commissions, and other periodic payments. The general formula can also be used to calculate the tax on a bonus or other non-periodic payment. We use Option 1, with the exception of a few factors, to determine the tax deduction amounts contained in the Payroll Deductions Tables (T4032) and Payroll Deductions Supplementary Tables (T4008) for each province and territory, and for Canada beyond the limits of any province or territory or outside Canada. Outline of Option 1 In general, the Option 1 steps are as follows: 1. Determine the net taxable income for the pay period (remuneration minus allowable deductions) and multiply it by the number of pay periods in the year to get an estimated annual taxable income amount. This annual taxable income amount is factor A. 2. Calculate the basic federal tax on the estimated annual taxable income, after allowable federal personal tax credits. The basic federal tax is factor T3. 3. Calculate the annual federal tax payable. This is factor T1. 4. Calculate the basic provincial or territorial tax on the estimated annual taxable income, after allowable provincial or territorial personal tax credits. The annual basic provincial or territorial tax is factor T4. PAGE 24 5. Calculate the annual provincial or territorial tax deduction. This is factor T2. 6. To get the estimated federal and provincial or territorial tax deductions for a pay period, add the federal and provincial or territorial tax, and divide the result by the number of pay periods. This is factor T. Special rules apply to determine the annual income for employees remunerated by commissions. A calculation is provided to determine the tax deductions for bonuses, retroactive pay increases, and other non-periodic payments. For more details, see the example on page 29. Note If an employee or a pensioner has income from another source from which no tax has been deducted (for example, investment income or support payments), a possible tax liability could exist when filing an income tax and benefit return for the year. The employee or pensioner can ask for more tax deductions, factor L, using Form TD1. Glossary \\\ Factor and Meaning (for complete details, see the formulas) A Annual taxable income A1 Annual net income used to determine the Manitoba and British Columbia tax reduction B Bonus, retroactive pay increase, vacation pay when vacation is not taken, and accumulated overtime payment B1 Gross bonus, retroactive pay increase, or other non-periodic payments year-to-date C Canada (or Quebec) Pension Plan contributions for the pay period D Employee's year-to-date Canada Pension Plan contribution with the employer D1 Employee's year-to-date employment insurance premium with the employer E Total commission expenses deductions reported on Form TD1X EI Employment insurance premiums for the pay period F Payroll deductions for employee contributions to a registered pension plan, a registered retirement savings plan, or a retirement compensation arrangement F1 Annual deductions such as child care expenses and support payments authorized by a tax services office or tax centre F2 Alimony or maintenance payments required by a legal document to be payroll-deducted authorized by a tax services office or tax centre F3 Employee registered pension plan or registered retirement savings plan contributions deducted from the current non-periodic payment. You can also use this field or design another to apply other tax-deductible amounts (such as union dues) to the non-periodic payment. F4 Employee registered pension plan or registered retirement savings plan contributions deducted from the year-to-date non-periodic payments. You can also use this field or design another to apply other tax-deductible amounts (such as union dues) to the non-periodic payment. G Gross commissions amount including gross salary HD Annual deduction for living in a prescribed zone, as indicated on Form TD1 I Gross remuneration for the pay period I1 Total remuneration for the year reported on Form TD1X IE Insurable earnings for the pay period including insurable taxable benefits, bonuses, and retroactive pay increases K Federal constant KP Provincial or territorial constant K1 Federal non-refundable personal tax credit K1P Provincial or territorial non-refundable personal tax credit K2 Federal Canada (or Quebec) Pension Plan contributions and employment insurance premiums tax credits for the year K2P Provincial or territorial Canada Pension Plan contributions and employment insurance premiums tax credits for the year K2Q Quebec Pension Plan contributions, employment insurance premiums, and Quebec parental insurance plan premiums federal tax credits for the year K3 Other federal tax credits (such as medical expenses and charitable donations authorized by a tax services office or tax centre) K3P Other provincial or territorial tax credits (such as medical expenses and charitable donations authorized by a tax services office or tax centre) K4 Canada employment credit PAGE 25 K4P Provincial or territorial Canada employment credit (only applies to Yukon) L Extra tax deductions requested for the pay period LCF Federal labour-sponsored funds tax credit LCP Provincial or territorial labour-sponsored funds tax credit M Accumulated federal and provincial or territorial tax deductions (if any) to the end of the last pay period M1 Year-to-date tax deducted on all payments included in B year-to-date P The number of pay periods in the year PI Pensionable income for the pay period, or the gross income plus any taxable benefits for the pay period, including bonuses and retroactive pay increases where applicable PR The number of pay periods left in the year R Federal tax rate that applies to the annual taxable income A S Ontario or British Columbia provincial tax reduction S1 Annualizing factor T Estimated federal and provincial or territorial tax deductions for the pay period T1 Annual federal tax deduction T2 Annual provincial or territorial tax deduction T3 Annual basic federal tax T4 Annual basic provincial or territorial tax TB Tax deductions on such things as a bonus or retroactive pay increase, payable now TC "Total claim amount" reported on federal Form TD1 TCP "Total claim amount" reported on the provincial or territorial TD1 form U1 Union dues for the pay period V Provincial or territorial tax rate for the year V1 Surtax calculated on the basic provincial or territorial tax V2 Extra tax calculated on taxable income (only applies to Ontario health premium) Y Extra provincial or territorial tax reduction based on applicable amounts reported on the provincial or territorial Form TD1 YTD Year-to-date \\\ Formula to calculate annual taxable income (A) A = Annual taxable income = [P multiplied by (I minus F minus F2 minus U1 )] minus HD minus F1 If the result is negative, T = L. Where: T = Estimated federal and provincial or territorial tax deductions for the pay period L = Extra tax deductions for the pay period requested by the employee or pensioner as indicated on Form TD1 \\\ Only for employees remunerated by commission: A = I1 minus F* minus F2* minus HD minus F1 minus E If the result is negative, T = L. ** Estimated deduction amounts for the year. For registered retirement savings plan (RRSP) contributions included in F, the employer will need to find out from the employee remunerated by commission the estimated or expected annual deduction. It is recommended that employers caution employees not to exceed their RRSP contribution limit for the year. \\\ P = The number of pay periods in the year: Weekly P = 52 (or 53 where applicable) Biweekly P = 26 (or 27 where applicable) Semi-monthly P = 24 Monthly P = 12 Other P = 10, 13, 22, or any other number of pay periods of the employer or payer for the year PAGE 26 I = Gross remuneration for the pay period. This includes overtime earned and paid in the same pay period, pension income, qualified pension income, and taxable benefits, but does not include bonuses, retroactive pay increases, or other non-periodic payments. For the tax deduction calculation on bonuses, retroactive pay increases, or other non-periodic payments, see the formula called "Tax calculation formula for bonuses, retroactive pay increases, or other non-periodic payments" on page 29. I1 = Total remuneration for the year reported on Form TD1X. Total remuneration includes commission payments, salary (where applicable), non- periodic payments, and taxable benefits. F = Payroll deductions for the pay period for employee contributions to a registered pension plan (RPP) for current and past services, a registered retirement savings plan (RRSP), or a retirement compensation arrangement (RCA). For tax deductions purposes, employers can deduct amounts contributed to an RPP, RRSP, or RCA by or for an employee in determining the employee's taxable income. Since January 1, 2001, you no longer need a letter of authority to reduce the amount of income tax deductions from any remuneration when you withhold a contribution that is paid directly to the recipient's RRSP from any payments. This includes retiring allowances (both eligible and non-eligible parts), and lump-sum payments in excess of $10,000. For more information, see the employers' guide called Payroll Deductions and Remittances. F2 = Alimony or maintenance payments required by a legal document dated before May 1, 1997, to be deducted from the employee's salary for the pay period. The legal document could be a garnishment or a similar order of a court or competent tribunal. If an employee asks that the alimony or maintenance payments not be used to determine his or her annual taxable income, no authorization from a tax services office or tax centre is needed. In situations where a garnishment or a similar order of a court or competent tribunal indicates that the alimony or maintenance payment cannot be more than a certain percentage of the employee's net salary (net salary as defined in the garnishment or order), more calculations may be required, as follows: 1. Calculate the tax deduction amount and the net salary amount using the alimony or maintenance amount shown in the garnishment or order. 2. Determine the alimony or maintenance payment to be withheld (F2). This will be either the maximum allowable as a percentage of the employee's net salary calculated in (1), or the amount shown in the garnishment or order, whichever is less. 3. Determine the tax deduction for the pay period using the F2 amount in (2). U1 = Union dues for the pay period paid to a trade union, an association of public servants, or dues required under the law of a province to a parity or advisory committee or similar body. HD = Annual deduction for living in a prescribed zone as indicated on Form TD1. To determine whether or not an individual resided in a prescribed zone, the employee or pensioner should contact the local tax services office or tax centre. F1 = Annual deductions (such as child care expenses, and alimony and maintenance payments not deducted from the employee's salary), requested by an employee or pensioner and authorized by a tax services office or tax centre. The employer or payer will be informed by a tax services office or tax centre of the amount to be used with F1, when such an amount applies. If the F1 amount is implemented after the employer's or payer's first pay period in the year, F1 must be adjusted by using the following formula: (P multiplied by F1) divided by PR Where: P = The number of pay periods in the year F1 = Annual deduction authorized by a tax services office or tax centre PR = The number of pay periods left in the year. Do not include the current pay period. E = Total commission expenses deductions reported on Form TD1X. PAGE 27 Formula to calculate basic federal tax (T3) T3 = Annual basic federal tax = (R multiplied by A) minus K minus K1 minus K2 minus K3 minus K4 If the result is negative, T3 = $0. Only for employees in Quebec: (R multiplied by A) minus K minus K1 minus K2Q minus K3 minus K4 If the result is negative, T3 = $0. R = Federal tax rate that applies to annual taxable income A \\\ \\ 2012 federal tax rates and income thresholds Annual taxable income A: More than $0 - Not more than $42,707 Rate R: 0.15 Constant K: $0 More than 42,707 - Not more than 85,414 Rate R: 0.22 Constant K: 2,989 More than 85,414 - Not more than 132,406 Rate R: 0.26 Constant K: 6,406 More than 132,406 and over Rate R: 0.29 Constant K: 10,378 \\\ \\ A = Annual taxable income K = Federal constant to adjust the application of the federal tax rate to the annual taxable income A. The constant is the tax overcharged when applying the 22%, 26%, and 29% rates to the total annual taxable income A. See the "2012 federal tax rates and income thresholds" table above. K1 = Federal non-refundable personal tax credit = 0.15 multiplied by TC Note The appropriate percentage for the tax year is 15%. The appropriate percentage is the lowest percentage referred to in the "2012 federal tax rates and income thresholds" table above. Where: \\ TC = The total claim amount reported on Form TD1. If Form TD1 is not filed by the employee or pensioner, TC is $10,822, and for non-resident individuals, TC is $0. If the claim code is E, T = $0. If you have the federal tax credits amounts for the employee or pensioner for 2011, see the section called "Indexing of personal amounts," on page 14. \\ Note If the province is Ontario, even if the claim code is E, the Ontario health premium is payable on annual income over $20,000. K2 = Canada Pension Plan contributions and employment insurance premiums federal tax credits for the year \\ = [(0.15 multiplied by (P multiplied by C, maximum $2,306.70)) + (0.15 multiplied by (P multiplied by EI, maximum $839.97))]* \\ Only for employees in Quebec: \\ K2Q = Quebec Pension Plan contributions, employment insurance premiums, and Quebec parental insurance plan premiums federal tax credits for the year = [(0.15 multiplied by (P multiplied by C, maximum $2,341.65)) + (0.15 multiplied by (P multiplied by EI, maximum $674.73)) + (0.15 multiplied by (P multiplied by IE multiplied by 0.00559, maximum $368.94))]* \\ Where: P = The number of pay periods in the year C = Canada (or Quebec) Pension Plan contribution for the pay period. See the section called "Part B - Canada Pension Plan (CPP)," on page 80. EI = Employment insurance premium for the pay period. See the section called "Part C - Employment insurance (EI)," on page 83. PAGE 28 IE = Insurable earnings for the pay period including insurable taxable benefits, bonuses, and retroactive pay increases Note * Where an employee has already contributed the maximum CPP, EI, or QPIP for the year with the employer, use the maximum CPP, EI, or QPIP deduction to determine the credit for the remainder of the year. Where, during the pay period in which the employee reaches the maximum, the CPP, EI, or QPIP, when annualized, is less than the annual maximum, then use the maximum annual deduction(s) in that pay period. \\ In either case, for the rest of the pay periods in the year, (P multiplied by C), (P multiplied by EI), or (P multiplied by IE multiplied by 0.00559) (as applicable) is replaced by the maximum annual deduction(s). This modification ensures that the employee will receive the maximum CPP, EI, and QPIP tax credit for the rest of the pay periods in the year. \\ If you want to use a year-to-date method to calculate CPP, EI, and QPIP federal tax credits, (P multiplied by C) and (P multiplied by EI) can be modified as follows: (P multiplied by C) is changed to the lesser of: \\ (i) $2,306.70; and \\ (ii) Year-to-date C + (PR multiplied by C). (P multiplied by EI) is changed to the lesser of: \\ (i) $839.97; and \\ (ii) Year-to-date EI + (PR multiplied by EI). Only for employees in Quebec: (P multiplied by EI) is changed to the lesser of: \\ (i) $674.73; and \\ (ii) Year-to-date EI + (PR multiplied by EI). \\ (P multiplied by IE multiplied by 0.00559) is changed to the lesser of: (i) $368.94; and (ii) Year-to-date QPIP + (PR multiplied by IE multiplied by 0.00559). \\ Where: PR = The number of pay periods left in the year. Do not include the current pay period. \\\ Only for employees remunerated by commission: \\ K2 = [(0.15 multiplied by (0.0495 multiplied by (I1 minus $3,500)*, maximum $2,306.70)) + (0.15 multiplied by (0.0183 multiplied by I1, maximum $839.97))] \\ * If the resulting amount is negative, substitute $0. Only for employees in Quebec: \\ K2Q = [(0.15 multiplied by (0.05025 multiplied by (I1 minus $3,500)*, max $2,341.65)) + (0.15 multiplied by (0.0147 multiplied by I1, maximum $674.73)) + (0.15 multiplied by (0.00559 multiplied by I1, max $368.94))] \\ * If the resulting amount is negative, substitute $0. Note The preceding is subject to rules in Part B and Part C of this document and the instructions contained in the employers' guide called Payroll Deductions and Remittances. \\\ I1 = Total remuneration for the year reported on Form TD1X. Total remuneration includes commission payments, salary (where applicable), non- periodic payments, and taxable benefits. K3 = Other federal tax credits (such as medical expenses and charitable donations requested by an employee or pensioner and authorized by a tax services office or tax centre). The employer or payer will be informed by a tax services office or tax centre of the amount to be used as K3, when such an amount applies. PAGE 29 If the K3 amount is implemented after the employer's or payer's first pay period in the year, K3 must be adjusted by using the following formula: (P multiplied by K3) divided by PR Where: P = The number of pay periods in the year K3 = Annual federal tax credit authorized by a tax services office or tax centre PR = The number of pay periods left in the year. Do not include the current pay period. K4 = Canada employment credit = The lesser of: \\ (i) 0.15 multiplied by A; and (ii) 0.15 multiplied by $1,095. \\ Note For the Canada employment credit, A is the annual gross income from office or employment before deductions. This is the same amount you normally report in box 14 of the T4 slip(s). As administrative relief, you are authorized to use the regular factor A (annual taxable income) for this calculation, except when the total income is superannuation or pension benefits. Formula to calculate the annual federal tax payable (T1) T1 = Annual federal tax deduction, except for employees in Quebec, outside Canada, and in Canada beyond the limits of any province or territory = (T3 minus LCF)* * If the result is negative, substitute $0. Only for employees in Quebec: T1 = [(T3 minus LCF)* minus (0.165 multiplied by T3)]* * If the result is negative, substitute $0. Only for employees outside Canada and in Canada beyond the limits of any province or territory: T1 = [T3 + (0.48 multiplied by T3) minus LCF]* * If result is negative, substitute $0. T3 = Annual basic federal tax LCF = Labour-sponsored funds federal tax credit for the year = The lesser of: (i) $750; and (ii) 15% of the amount deducted or withheld during the year for the acquisition, by the employee, of approved shares of the capital stock of a prescribed labour-sponsored venture capital corporation. Note If the shares are invested in a registered retirement savings plan, then the amount invested can be used to determine the annual taxable income amount. Tax calculation formula for bonuses, retroactive pay increases, and other non-periodic payments Introduction Generally, the tax on a bonus (or retroactive pay increase) is calculated by finding the tax on the total of regular annual income plus any previous bonuses plus the current bonus and subtracting the tax on the total of regular annual income plus any previous bonuses. The difference will be the tax on the current bonus. PAGE 30 In the optional year-to-date method outlined below, instead of annualizing the current income, you use year-to-date income values and year-to-date deductions as the annual income with and without the bonus. In either case the tax on the bonus is as follows: TB = Tax on a bonus, a retroactive pay increase, or other non-periodic payments payable now is calculated as follows: The difference between: (i) the annual tax amount (T1 + T2) based on the instructions contained in Step 1 below; and (ii) the annual tax amount (T1 + T2) based on the instructions contained in Step 2 below. (1) Regular bonus calculation Step 1 Determine the annual tax (T1 + T2) based on the annual taxable income (factor A) with the non-periodic payment payable now. The formula to calculate this A is as follows: A = ([P multiplied by (I minus F minus F2 minus U1)] minus HD minus F1)* + (B minus F3)** + (B1 minus F4)** * If the result is negative, substitute $0. ** Result cannot be negative, and result cannot be negative after deducting CPP and EI. Note If the result above is $5,000 or less, deduct 15% tax (10% in Quebec) from the bonus or retroactive pay increase. Step 2 Determine the annual tax (T1 + T2) based on the annual taxable income (factor A) without the non-periodic payment payable now. The formula to calculate this A is as follows: A = ([P multiplied by (I minus F minus F2 minus U1)] minus HD minus F1)* + (B1 minus F4)** * If the result is negative, substitute $0. ** Result cannot be negative, and result cannot be negative after deducting CPP and EI. Where: P = Number of pay periods I = Gross remuneration for the pay period. Do not include bonuses, retroactive pay increases, or other non-periodic payments. F = Employee registered pension plan or registered retirement savings plan contributions for the pay period F2 = Alimony or maintenance payments deducted at source for the pay period U1 = Union dues for the pay period B = Gross bonus, retroactive pay increase, or other non-periodic payment payable now F3 = Employee registered pension plan or registered retirement savings plan contributions deducted from the current non-periodic payment. You can also use this field or design another to apply other tax deductible amounts to the non-periodic payment, such as union dues. B1 = Gross bonus, retroactive pay increase, or other non-periodic payments year-to-date (before this pay period) F4 = Employee registered pension plan or registered retirement savings plan contributions deducted from the year-to-date non-periodic payments. You can also use this field or design another to apply other tax deductible amounts (such as union dues) to the non-periodic payment. If there is no current I, use the most recent I. (2) Year-to-date bonus calculation (optional) Step 1 Determine the annual tax (T1 + T2) based on the annual taxable income (factor A) with the non-periodic payment payable now. The annual taxable income (factor A) is based on a year-to-date concept, plus the estimated income for the rest of the pay periods in the year. YTD means year-to-date (before this pay period). The formula to calculate this A is as follows: A = [(IYTD minus FYTD minus F2YTD minus U1YTD) + (PR multiplied by (I minus F minus F2 minus U1)) minus F1 minus HD]* + (B minus F3)** + (B1 minus F4)** * If the result is negative, substitute $0. ** Result cannot be negative, and result cannot be negative after deducting CPP and EI. PAGE 31 Note If the result above is $5,000 or less, deduct 15% tax (10% in Quebec) from the bonus or retroactive pay increase. Step 2 A = [(IYTD minus FYTD minus F2YTD minus U1YTD) + (PR multiplied by (I minus F minus F2 minus U1)) minus F1 minus HD]* + (B1 minus F4)** * If the result is negative, substitute $0. ** Result cannot be negative, and result cannot be negative after deducting CPP and EI. Where: IYTD = Gross remuneration year-to-date. Do not include non-periodic payments. FYTD = Employee registered pension plan (RPP) or registered retirement savings plan (RRSP) contributions year-to-date F2YTD = Alimony or maintenance payments deducted at source year-to-date U1YTD = Union dues year-to-date PR = Number of pay periods left in the year Factors I, F, F2, U1, F1, HD, B, F3, B1, and F4 have the meanings given above under "(1) Regular bonus calculation." Example for year-to-date bonus calculation method In this example, an employee received a retroactive pay increase from $1,000 to $1,100 per week that applies to 25 weeks. Therefore, a retroactive pay increase payment of $2,500 is payable now. $1,000 will be directed to the employee's RRSP. Thirty pay periods have passed and 22 pay periods remain in the year. Year-to-date income is $30,000, year-to-date RPP is $1,350, and year-to-date union dues are $150. The current income is $1,100 with RPP withheld of $45 and union dues of $5. The employee received a previous bonus of $1,000 with only CPP, EI, and tax withheld from it. Step 1 A = Annual taxable income with the non-periodic payment payable now = [(IYTD minus FYTD minus F2YTD minus U1YTD) + (PR multiplied by (I minus F minus F2 minus U1)) minus F1 minus HD]* + (B minus F3)** + (B1 minus F4)** = [($30,000 minus $1,350 minus $0 minus $150) + (22 multiplied by ($1,100 minus $45 minus $0 minus $5)) minus $0 minus $0] + ($2,500 minus $1,000] + ($1,000 minus $0) = $28,500 + (22 multiplied by $1,050) + $1,500 + $1,000 = $54,100 Step 2 A = Annual taxable income without the non-periodic payment payable now = [(IYTD minus FYTD minus F2YTD minus U1YTD) + (PR multiplied by (I minus F minus F2 minus U1)) minus F1 minus HD]* + (B1 minus F4)** = [($30,000 minus $1,350 minus $0 minus $150) + (22 multiplied by ($1,100 minus $45 minus $0 minus $5)) minus $0 minus $0] + ($1,000 minus $0) = $28,500 + (22 multiplied by $1,050) + $1,000 = $52,600 After you have calculated the annual taxable income, A, in steps 1 and 2, calculate the factors T1 and T2 in the same way as for regular remuneration. Note The formula above can be used to calculate the tax deductions on non-periodic payments such as accumulated overtime not paid in the same pay period earned, paid vacation not taken by the employee, and bonuses. Formula to calculate annual basic provincial or territorial tax (T4) T4 = Annual basic provincial or territorial tax = (V multiplied by A) minus KP minus K1P minus K2P minus K3P minus K4P If the result is negative, T4 = $0. V = Provincial or territorial tax rate for the year (does not apply to Quebec, outside Canada, or in Canada beyond the limits of any province or territory) A = Annual taxable income KP = Provincial or territorial constant K1P = Provincial or territorial non-refundable personal tax credit K2P = Canada Pension Plan contributions and employment insurance premiums provincial or territorial tax credits for the year PAGE 32 K3P = Other provincial or territorial tax credits (such as medical expenses and charitable donations authorized by a tax services office or tax centre) K4P = Provincial or territorial Canada employment credit (only applies to Yukon) Formulas to calculate annual provincial or territorial tax deduction (T2) T2 = Annual provincial or territorial tax deduction = T4 + V1 + V2 minus S minus LCP If the result is negative, T2 = $0. Only for employees in Quebec: T2 = $0 Only for employees outside Canada and in Canada beyond the limits of any province or territory: T2 = $0 T4 = Annual basic provincial or territorial tax V1 = Provincial or territorial surtax calculated on the basic provincial or territorial tax (only applies to Prince Edward Island, Ontario, and Yukon) V2 = Extra tax calculated on taxable income (only applies to Ontario health premium) S = Provincial tax reduction (only applies to Ontario and British Columbia) \\ LCP = Provincial or territorial labour-sponsored funds tax credit (only applies to Newfoundland, Nova Scotia, New Brunswick, Manitoba, Saskatchewan, British Columbia, and Yukon) \\ A1 = Annual net income used to calculate S (only applies to British Columbia) = A + HD \\\ Only for employees remunerated by commission: A1 = I1 minus F* minus F2* minus F1 minus E If the result is negative, A1 = $0. * Estimated deductions amount for the year. In the case of registered retirement savings plan (RRSP) contributions included in F, the employer will need to find out from the employee remunerated by commission the estimated or expected annual deduction. It is recommended that employers caution employees not to exceed their RRSP contribution limits for the year. Note When an employee has not filed Form TD1X, tax deductions will be calculated in the same way as for regular salary. Alberta: T2 = T4 + V1 minus S minus LCP If the result is negative, T2 = $0. Where: T4 = (V multiplied by A) minus KP minus K1P minus K2P minus K3P Where: V = 0.10 KP = $0 K1P = 0.10 multiplied by TCP Where: \\ TCP = The total of personal non-refundable tax credits amounts reported on Form TD1AB. If that form is not filed, TCP is $17,282. K2P = [(0.10 multiplied by (P multiplied by C, maximum $2,306.70)) + (0.10 multiplied by (P multiplied by EI, maximum $839.97))]* \\ * Where an employee reaches the maximum CPP or EI for the year with an employer, the instructions in the note for the K2 factor on page 28 also apply to the K2P factor. For employees remunerated by commission, use the federal K2 formula for commissions and replace the lowest federal rate in the K2 formula with the tax rate for Alberta. K3P = Other annual provincial non-refundable tax credits (such as medical expenses or charitable donations authorized by a tax services office or tax centre). The tax services office will inform the employer or payer of the amount of K3P when it applies, as well as how to implement the amount after the first pay period of the year. V1, S, and LCP = $0 British Columbia: T2 = T4 + V1 minus S minus LCP If the result is negative, T2 = $0. Where: T4 = (V multiplied by A) minus KP minus K1P minus K2P minus K3P Where V and KP are based on the value of A in the 2012 British Columbia tax rates and income thresholds table/ \\\ \\ 2012 British Columbia tax rates and income thresholds Annual taxable income A: More than $0 - Not more than $37,013 Rate V: 0.0506 Constant KP: $0 More than 37,013 - Not more than 74,028 Rate V: 0.0770 Constant KP: 977 More than 74,028 - Not more than 84,993 Rate V: 0.1050 Constant KP: 3,050 More than 84,993 - Not more than 103,205 Rate V: 0.1229 Constant KP: 4,571 More than 103,205 and over Rate V: 0.1470 Constant KP: 7,059 \\\ \\ \\ K1P = 0.0506 multiplied by TCP Where: TCP = The total of personal non-refundable tax credits amounts reported on Form TD1BC. If that form is not filed, TCP is $11,354. K2P = [(0.0506 multiplied by (P multiplied by C, maximum $2,306.70)) + (0.0506 multiplied by (P multiplied by EI, maximum $839.97))]* \\ * Where an employee reaches the maximum CPP or EI for the year with an employer, the instructions in the note for the K2 factor on page 28 also apply to the K2P factor. For employees remunerated by commission, use the federal K2 formula for commissions and replace the lowest federal rate in the K2 formula with the lowest tax rate for British Columbia. K3P = Other annual provincial non-refundable tax credits (such as medical expenses or charitable donations authorized by a tax services office or tax centre). The tax services office will inform the employer or payer of the amount of K3P when it applies, as well as how to implement the amount after the first pay period of the year. V1 = $0 \\ S = Where A1 is less than or equal to $17,913, S is equal to the lesser of: (i) T4; and (ii) $403. = Where A1 is greater than $17,913 is less than or equal to $30,506.75, S is equal to the lesser of: (i) T4; and (ii) $403 minus [(A1 minus $17,913) multiplied by 3.2%]. = Where A1 is greater than $30,506.75 = S = $0 \\ PAGE 34 LCP = The lesser of: (i) $2,000; and (ii) 15% of the amount deducted or withheld during the year for the acquisition by the employee of approved shares of the capital stock of a prescribed labour-sponsored venture capital corporation. Manitoba: T2 = T4 + V1 minus S minus LCP If the result is negative, T2 = $0. Where: T4 = (V multiplied by A) minus KP minus K1P minus K2P minus K3P Where V and KP are based on the value of A in the 2012 Manitoba tax rates and income thresholds table. \\\ 2012 Manitoba tax rates and income thresholds Annual taxable income A: More than $0 - Not more than $31,000 Rate V: 0.1080 Constant KP: $0 More than 31,000 - Not more than 67,000 Rate V: 0.1275 Constant KP: 605 More than 67,000 and over Rate V: 0.1740 Constant KP: 3,720 \\\ K1P = 0.108 multiplied by TCP Where: TCP = The total of personal non-refundable tax credits amounts reported on Form TD1MB. If that form is not filed, TCP is $8,634. \\ K2P = [(0.108 multiplied by (P multiplied by multiplied by C, maximum $2,306.70)) + (0.108 multiplied by (P multiplied by EI, maximum $839.97))]* \\ * Where an employee reaches the maximum CPP or EI for the year with an employer, the instructions in the note for the K2 factor on page 28 also apply to the K2P factor. For employees remunerated by commission, use the federal K2 formula for commissions and replace the lowest federal rate in the K2 formula with the lowest tax rate for Manitoba. K3P = Other annual provincial non-refundable tax credits (such as medical expenses or charitable donations authorized by a tax services office or tax centre). The tax services office will inform the employer or payer of the amount of K3P when it applies, as well as how to implement the amount after the first pay period of the year. V1 and S = $0 LCP = The lesser of: (i) $1,800; and (ii) 15% of the amount deducted or withheld during the year for the acquisition by the employee of approved shares of the capital stock of a prescribed labour-sponsored venture capital corporation. New Brunswick: T2 = T4 + V1 minus S minus LCP If the result is negative, T2 = $0. Where: T4 = (V multiplied by A) minus KP minus K1P minus K2P minus K3P Where V and KP are based on the value of A in the 2012 New Brunswick tax rates and income thresholds table. PAGE 35 \\\ \\ 2012 New Brunswick tax rates and income thresholds Annual taxable income A: More than $0 - Not more than $38,190 Rate V: 0.091 Constant KP: $0 More than 38,190 - Not more than 76,380 Rate V: 0.121 Constant KP: 1,146 More than 76,380 - Not more than 124,178 Rate V: 0.124 Constant KP: 1,375 More than 124,178 and over Rate V: 0.143 Constant KP: 3,734 \\\ \\ \\ K1P = 0.091 multiplied by TCP \\ Where: \\ TCP = The total of personal non-refundable tax credits amounts reported on Form TD1NB. If that form is not filed, TCP is $9,203. K2P = [(0.091 multiplied by (P multiplied by C, maximum $2,306.70)) + (0.091 multiplied by (P multiplied by EI, maximum $839.97))]* \\ * Where an employee reaches the maximum CPP or EI for the year with an employer, the instructions in the note for the K2 factor on page 28 also apply to the K2P factor. For employees remunerated by commission, use the federal K2 formula for commissions and replace the lowest federal rate in the K2 formula with the lowest tax rate for New Brunswick. K3P = Other annual provincial non-refundable tax credits (such as medical expenses or charitable donations authorized by a tax services office or tax centre). The tax services office will inform the employer or payer of the amount of K3P when it applies, as well as how to implement the amount after the first pay period of the year. V1 and S = $0 LCP = The lesser of: (i) $2,000; and (ii) 20% of the amount deducted or withheld during the year for the acquisition by the employee of approved shares of the capital stock of a prescribed labour-sponsored venture capital corporation. Newfoundland and Labrador: T2 = T4 + V1 minus S minus LCP If the result is negative, T2 = $0. Where: T4 = (V multiplied by A) minus KP minus K1P minus K2P minus K3P Where V and KP are based on the value of A in the 2012 Newfoundland and Labrador tax rates and income thresholds table. \\\ \\ 2012 Newfoundland and Labrador tax rates and income thresholds Annual taxable income A: More than $0 - Not more than $32,893 Rate V: 0.077 Constant KP: $0 More than 32,893 - Not more than 65,785 Rate V: 0.125 Constant KP: 1,579 More than 65,785 and over Rate V: 0.133 Constant KP: 2,105 \\\ \\ K1P = 0.077 multiplied by TCP Where: \\ TCP = The total of personal non-refundable tax credits amounts reported on Form TD1NL. If that form is not filed, TCP is $8,237. \\ PAGE 36 K2P = [(0.077 multiplied by (P multiplied by C, maximum $2,306.70)) + (0.077 multiplied by (P multiplied by EI, maximum $839.97))]* * Where an employee reaches the maximum CPP or EI for the year with an employer, the instructions in the note for the K2 factor on page 28 also apply to the K2P factor. For employees remunerated by commission, use the federal K2 formula for commissions and replace the lowest federal rate in the K2 formula with the lowest tax rate for Newfoundland and Labrador. K3P = Other annual provincial non-refundable tax credits (such as medical expenses or charitable donations authorized by a tax services office or tax centre). The tax services office will inform the employer or payer of the amount of K3P when it applies, as well as how to implement the amount after the first pay period of the year. V1 = $0 S = $0 LCP = The lesser of: (i) $2,000; and (ii) 20% of the amount deducted or withheld during the year for the acquisition by the employee of approved shares of the capital stock of a prescribed labour-sponsored venture capital corporation. Northwest Territories: T2 = T4 + V1 minus S minus LCP If the result is negative, T2 = $0. Where: T4 = (V multiplied by A) minus KP minus K1P minus K2P minus K3P Where V and KP are based on the value of A in the 2012 Northwest Territories tax rates and income thresholds table. \\\ \\ 2012 Northwest Territories tax rates and income thresholds Annual taxable income A: More than $0 - Not more than $38,679 Rate V: 0.0590 Constant KP: $0 More than 38,679 - Not more than 77,360 Rate V: 0.0860 Constant KP: 1,044 More than 77,360 - Not more than 125,771 Rate V: 0.1220 Constant KP: 3,829 More than 125,771 and over Rate V: 0.1405 Constant KP: 6,156 \\\ \\ K1P = 0.059 multiplied by TCP Where: \\ TCP = The total of personal non-refundable tax credits amounts reported on Form TD1NT. If that form is not filed, TCP is $13,280. K2P = [(0.059 multiplied by (P multiplied by C, maximum $2,306.70)) + (0.059 multiplied by (P multiplied by EI, maximum $839.97))]* \\ * Where an employee reaches the maximum CPP or EI for the year with an employer, the instructions in the note for the K2 factor on page 28 also apply to the K2P factor. For employees remunerated by commission, use the federal K2 formula for commissions and replace the lowest federal rate in the K2 formula with the lowest tax rate for the Northwest Territories. K3P = Other annual territorial non-refundable tax credits (such as medical expenses or charitable donations authorized by a tax services office or tax centre). The tax services office will inform the employer or payer of the amount of K3P when it applies, as well as how to implement the amount after the first pay period of the year. V1, S, and LCP = $0 PAGE 37 Nova Scotia: T2 = T4 + V1 minus S minus LCP If the result is negative, T2 = $0. Where: T4 = (V multiplied by A) minus KP minus K1P minus K2P minus K3P Where V and KP are based on the value of A in the 2012 Nova Scotia tax rates and income thresholds table. \\\ 2012 Nova Scotia tax rates and income thresholds Annual taxable income A: More than $0 - Not more than $29,590 Rate V: 0.0879 Constant KP: $0 More than 29,590 - Not more than 59,180 Rate V: 0.1495 Constant KP: 1,823 More than 59,180 - Not more than 93,000 Rate V: 0.1667 Constant KP: 2,841 More than 93,000 - Not more than 150,000 Rate V: 0.1750 constant KP: 3,613 More than 150,000 and over Rate V: 0.2100 Constant KP: 8,863 \\\ K1P = 0.0879 multiplied by TCP Where: \\ TCP = The total of personal non-refundable tax credits amounts reported on Form TD1NS. If that form is not filed, TCP is $8,481. K2P = [(0.0879 multiplied by (P multiplied by C, maximum $2,306.70)) + (0.0879 multiplied by (P multiplied by EI, maximum $839.97))]* \\ * Where an employee reaches the maximum CPP or EI for the year with an employer, the instructions in the note for the K2 factor on page 28 also apply to the K2P factor. For employees remunerated by commission, use the federal K2 formula for commissions and replace the lowest federal rate in the K2 formula with the lowest tax rate for Nova Scotia. K3P = Other annual provincial non-refundable tax credits (such as medical expenses or charitable donations authorized by a tax services office or tax centre). The tax services office will inform the employer or payer of the amount of K3P when it applies, as well as how to implement the amount after the first pay period of the year. V1 = $0 S = $0 LCP = The lesser of: (i) $2,000; and (ii) 20% of the amount deducted or withheld during the year for the acquisition by the employee of approved shares of the capital stock of a prescribed labour-sponsored venture capital corporation. Nunavut: T2 = T4 + V1 minus S minus LCP If the result is negative, T2 = $0. Where: T4 = (V multiplied by A) minus KP minus K1P minus K2P minus K3P Where V and KP are based on the value of A in the 2012 Nunavut tax rates and income thresholds table. PAGE 38 \\\ \\ 2012 Nunavut tax rates and income thresholds Annual taxable income A: More than $0 - Not more than $40,721 Rate V: 0.040 Constant KP: $0 More than 40,721 - Not more than 81,442 Rate V: 0.070 Constant KP: 1,222 More than 81,442 - Not more than 132,406 Rate V: 0.090 Constant KP: 2,850 More than 132,406 and over Rate V: 0.115 Constant KP: 6,161 \\\ \\ 2012 Nunavut tax rates and income thresholds K1P = 0.040 multiplied by TCP Where: \\ TCP = The total of personal non-refundable tax credits amounts reported on Form TD1NU. If that form is not filed, TCP is $12,211. K2P = [(0.040 multiplied by (P multiplied by C, maximum $2,306.70)) + (0.040 multiplied by (P multiplied by EI, maximum $839.97))]* \\ * Where an employee reaches the maximum CPP or EI for the year with an employer, the instructions in the note for the K2 factor on page 28 also apply to the K2P factor. For employees remunerated by commission, use the federal K2 formula for commissions and replace the lowest federal rate in the K2 formula with the lowest tax rate for Nunavut. K3P = Other annual territorial non-refundable tax credits (such as medical expenses or charitable donations authorized by a tax services office or tax centre). The tax services office will inform the employer or payer of the amount of K3P when it applies, as well as how to implement the amount after the first pay period of the year. V1, S, and LCP = $0 Ontario: T2 = T4 + V1 + V2 minus S minus LCP If the result is negative, T2 = $0. Where: T4 = (V multiplied by A) minus KP minus K1P minus K2P minus K3P Where V and KP are based on the value of A in the 2012 Ontario tax rates and income thresholds table. \\\ \\ 2012 Ontario tax rates and income thresholds Annual taxable income A More than $0 - Not more than $39,020 Rate V: 0.0505 Constant KP: $0 More than 39,020 - Not more than 78,043 Rate V: 0.0915 Constant KP: 1,600 More than 78,043 and over Rate V: 0.1116 Constant KP: 3,168 \\\ \\ K1P = 0.0505 multiplied by TCP Where: \\ TCP = The total of personal non-refundable tax credits amounts reported on Form TD1ON. If that form is not filed, TCP is $9,405. K2P = [(0.0505 multiplied by (P multiplied by C, maximum $2,306.70)) + (0.0505 multiplied by (P multiplied by EI, maximum $839.97))]* \\ * Where an employee reaches the maximum CPP or EI for the year with an employer, the instructions in the note for the K2 factor on page 28 also apply to the K2P factor. For employees remunerated by commission, use the federal K2 formula for commissions and replace the lowest federal rate in the K2 formula with the lowest tax rate for Ontario. PAGE 39 K3P = Other annual provincial non-refundable tax credits (such as medical expenses or charitable donations authorized by a tax services office or tax centre). The tax services office will inform the employer or payer of the amount of K3P when it applies, as well as how to implement the amount after the first pay period of the year. \\ V1 = Where T4 is less than or equal to $4,213, V1 = $0 Where T4 is greater than $4,213 is less than or equal to $5,392, V1 = 0.20 multiplied by (T4 minus $4,213) Where T4 is greater than $5,392, V1 = 0.20 multiplied by (T4 minus $4,213) + 0.36 multiplied by (T4 minus $5,392) \\ V2 = Where A is less than or equal to $20,000, V2 = $0 Where A is greater than $20,000 is less than or equal to $36,000, V2 = the lesser of: (i) $300; and (ii) 0.06 multiplied by (A minus $20,000). Where A is greater than $36,000 is less than or equal to $48,000, V2 = the lesser of: (i) $450; and (ii) $300 + (0.06 multiplied by (A minus $36,000)). Where A is greater than $48,000 is less than or equal to $72,000, V2 = the lesser of: (i) $600; and (ii) $450 + (0.25 multiplied by (A minus $48,000)). Where A is greater than $72,000 is less than or equal to $200,000, V2 = the lesser of: (i) $750; and (ii) $600 + (0.25 multiplied by (A minus $72,000)). Where A is greater than $200,000, V2 = the lesser of: (i) $900; and (ii) $750 + (0.25 multiplied by (A minus $200,000)). \\ S = The lesser of: (i) T4 + V1; and (ii) [2 multiplied by ($217 + Y)] minus [T4 + V1]. If the result is negative, S = $0. Where: Y = The total of the following amounts: - $401 multiplied by the number of disabled dependants as indicated on Form TD1ON; and - $401 multiplied by the number of dependants under age 19 for which the employee or pensioner has made a written request. Note If Y is not used, any over deduction of tax will be considered when the individual files an income tax return. When possible, please use the Y factor. LCP = $0 Prince Edward Island: T2 = T4 + V1 minus S minus LCP If the result is negative, T2 = $0. Where: T4 = (V multiplied by A) minus KP minus K1P minus K2P minus K3P Where V and KP are based on the value of A in the 2012 Prince Edward Island tax rates and income thresholds table. PAGE 40 \\\ 2012 Prince Edward Island tax rates and income thresholds Annual taxable income A: More than $0 - Not more than $31,984 Rate V: 0.098 Constant KP: $0 More than 31,984 - Not more than 63,969 Rate V: 0.138 Constant KP: 1,279 More than 63,969 and over Rate V: 0.167 Constant KP: 3,134 \\\ K1P = 0.098 multiplied by TCP Where: TCP = The total of personal non-refundable tax credits amounts reported on Form TD1PE. If that form is not filed, TCP is $7,708. \\ K2P = [(0.098 multiplied by (P multiplied by C, maximum $2,306.70)) + (0.098 multiplied by (P multiplied by EI, maximum $839.97))]* \\ * Where an employee reaches the maximum CPP or EI for the year with an employer, the instructions in the note for the K2 factor on page 28 also apply to the K2P factor. For employees remunerated by commission, use the federal K2 formula for commissions and replace the lowest federal rate in the K2 formula with the lowest tax rate for Prince Edward Island. K3P = Other annual provincial non-refundable tax credits (such as medical expenses or charitable donations authorized by a tax services office or tax centre). The tax services office will inform the employer or payer of the amount of K3P when it applies, as well as how to implement the amount after the first pay period of the year. V1 = Where T4 is less than or equal to $12,500, V1 = $0 Where T4 is greater than $12,500, V1 = 0.10 multiplied by (T4 minus $12,500) S and LCP = $0 Quebec: Quebec employers whose employees receive income from tips and gratuities should review the section called "Example-only for employees in the hotel and restaurant business in Quebec" on page 55. Since Quebec collects its own provincial income tax and Quebec Pension Plan contributions, contact Revenu Québec for information on these subjects. The address and telephone numbers are listed on page 5 of this publication. Saskatchewan: T2 = T4 + V1 minus S minus LCP If the result is negative, T2 = $0. Where: T4 = (V multiplied by A) minus KP minus K1P minus K2P minus K3P Where V and KP are based on the value of A in the 2012 Saskatchewan tax rates and income thresholds table. \\\ \\ 2012 Saskatchewan tax rates and income thresholds Annual taxable income A: More than $0 - Not more than $42,065 Rate V: 0.11 Constant KP: $0 More than 42,065 - Not more than 120,185 Rate V: 0.13 Constant KP: 841 More than 120,185 and over Rate V: 0.15 Constant KP: 3,245 \\\ \\ PAGE 41 K1P = 0.11 multiplied by TCP Where: \\ TCP = The total of personal non-refundable tax credits amounts reported on Form TD1SK. If that form is not filed, TCP is $14,942. K2P = [(0.11 multiplied by (P multiplied by C, maximum $2,306.70)) + (0.11 multiplied by (P multiplied byEI, maximum $839.97))]* \\ * Where an employee reaches the maximum CPP or EI for the year with an employer, the instructions in the note for the K2 factor on page 28 also apply to the K2P factor. For employees remunerated by commission, use the federal K2 formula for commissions and replace the lowest federal rate in the K2 formula with the lowest tax rate for Saskatchewan. K3P = Other annual provincial non-refundable tax credits (such as medical expenses or charitable donations authorized by a tax services office or tax centre). The tax services office will inform the employer or payer of the amount of K3P when it applies, as well as how to implement the amount after the first pay period of the year. V1 and S = $0 LCP = The lesser of: (i) $1,000; and (ii) 20% of the amount deducted or withheld during the year for the acquisition by the employee of approved shares of the capital stock of a prescribed labour-sponsored venture capital corporation. Yukon: T2 = T4 + V1 minus S minus LCP If the result is negative, T2 = $0. Where: T4 = (V multiplied by A) minus KP minus K1P minus K2P minus K3P minus K4P Where V and KP are based on the value of A in the 2012 Yukon tax rates and income thresholds table. \\\ \\ 2012 Yukon tax rates and income thresholds Annual taxable income A: More than $0 - Not more than $42,707 Rate V: 0.0704 Constant KP: $0 More than 42,707 - Not more than 85,414 Rate V: 0.0968 Constant KP: 1,127 More than 85,414 - Not more than 132,406 Rate V: 0.1144 Constant KP: 2,631 More than 132,406 and over Rate V: 0.1276 Constant KP:4,379 \\\ \\ K1P = 0.0704 multiplied by TCP Where: \\ TCP = The total of personal non-refundable tax credits amounts reported on Form TD1YT. If that form is not filed, TCP is $10,822. K2P = [(0.0704 multiplied by (P multiplied by C, maximum $2,306.70)) + (0.0704 multiplied by (P multiplied by EI, maximum $839.97))]* \\ * Where an employee reaches the maximum CPP or EI for the year with an employer, the instructions in the note for the K2 factor on page 28 also apply to the K2P factor. For employees remunerated by commission, use the federal K2 formula for commissions and replace the lowest federal rate in the K2 formula with the lowest tax rate for Yukon. K3P = Other annual territorial non-refundable tax credits (such as medical expenses or charitable donations authorized by a tax services office or tax centre). The tax services office will inform the employer or payer of the amount of K3P when it applies, as well as how to implement the amount after the first pay period of the year. PAGE 42 K4P = The lesser of: (i) 0.0704 multiplied by A; and (ii) 0.0704 multiplied by $1,095. Note For the Canada employment credit, A is the annual gross income from office or employment before deductions. This is the same amount you normally report in box 14 of the T4 slip(s). As administrative relief, you are authorized to use the regular factor A (annual taxable income) for this calculation, except when the total income is superannuation or pension benefits. V1 = Where T4 is less than or equal to $6,000 V1 = $0 Where T4 is greater than $6,000 V1 = 0.05 multiplied by (T4 minus $6,000) S = $0 LCP = The lesser of: (i) $1,250; and (ii) 25% of the amount deducted or withheld during the year for the acquisition by the employee of approved shares of the capital stock of a prescribed labour-sponsored venture capital corporation. Outside Canada and in Canada beyond the limits of any province or territory: V, V1, V2, S, and LCP = $0 Formula to calculate the tax deductions (T) for the pay period T = Estimated federal and provincial or territorial tax deductions for the pay period = [(T1 + T2) divided by P] + L You can round the resulting amount to the nearest multiple of $0.05 or $0.01. Only for employees in Quebec, outside Canada, and in Canada beyond the limits of any province or territory: T = Estimated federal tax deductions for the pay period* = (T1 divided by P) + L You can round the resulting amount to the nearest multiple of $0.05 or $0.01. * Note Quebec employers whose employees receive income from tips and gratuities should review the section called "Example-only for employees in the hotel and restaurant business in Quebec" on page 55. For employees remunerated by commission where Form TD1X is completed: T = The tax to be deducted on the current commission payment (factor G) = [(T1 + T2) divided by (I1 divided by G)] + L You can round the resulting amount to the nearest multiple of $0.05 or $0.01. T1 = Annual federal tax deduction T2 = Annual provincial or territorial tax deduction P = The number of pay periods in the year L = Extra tax deductions for the pay period requested by the employee or pensioner as indicated on Form TD1 Note To cancel the election to have more tax deducted, the employee or pensioner has to file a new Form TD1 entering $0 at the item "Additional tax to be deducted." G = Gross commission amount including gross salary at the time of payment, plus any taxable benefits for commission-remunerated employees who have completed Form TD1X. If an employee has not filed Form TD1X, tax is calculated in the same way as regular salary. PAGE 43 Option 1 - Tax calculation examples for periodic payments Steps to follow-for salary, wages, pensions, or other periodic payments The following step-by-step method should provide an understandable approach to Option 1 based on the following examples. Notes The following examples have been standardized to show the same income and deduction amounts for each province and territory. In addition, the federal calculation has been shown only once, with the part for each province and territory shown after. This method avoids duplication and reduces the number of pages in this publication. For employees remunerated by commission only, see the example on page 53. \\ Changes in this section are not shaded. \\ Example - Assumptions and federal calculation This example is for a married employee who has a dependent spouse and three dependent children (under 18). The total personal non-refundable tax credits amount on Form TD1 is $28,217 ($10,822 + $10,822 + $6,573). For each province and territory we have assumed the maximum claims for these dependants, as shown on the provincial or territorial TD1 forms. The employee's salary is $57,200 annually, or $1,100 on a weekly payroll (52 pay periods). Registered pension plan contributions are $50 for the pay period, and $20 is deducted for union dues. The employee bought, by payroll deductions, $2,000 of approved shares of the capital stock of a prescribed labour-sponsored venture capital corporation. Step 1 Determine A using the following formula: A = [P multiplied by (I minus F minus F2 minus U1)] minus HD minus F1 = [52 multiplied by ($1,100 minus $50 minus $0 minus $20)] minus $0 minus $0 = [52 multiplied by $1,030] minus $0 minus $0 = $53,560 minus $0 minus $0 = $53,560 Determine C using the following formula: C = The lesser of: (i) $2,306.70 minus D; = $2,306.70 minus D; and (ii) 0.0495 multiplied by [PI minus ($3,500 divided by 52)] = 0.0495 multiplied by ($1,100 minus $67.30) = 0.0495 multiplied by $1,032.70 = $51.12. Only for employees in Quebec: C = The lesser of: (i) $2,341.65 minus D1; = $2,341.65; and (ii) 0.05025 multiplied by [PI minus ($3,500 divided by 52)] 0.05025 multiplied by ($1,100 minus $67.30) 0.05025 multiplied by $1,032.70 $51.89. Determine EI using the following formula: EI = The lesser of: (i) $839.97 minus D1; = $839.97 minus D1; and (ii) 0.0183 multiplied by IE = 0.0183 multiplied by $1,100 = $20.13. PAGE 44 Only for employees in Quebec: EI = The lesser of: (i) $674.73 minus D1; = $674.73; and (ii) 0.0147 multiplied by IE = 0.0147 multiplied by $1,100 = $16.17. Step 2 Determine K1, K2, K2Q K3, and K4 using the following formula: K1 = 0.15 multiplied by TC = 0.15 multiplied by $28,217 = $4,232.55 K2 = [(0.15 multiplied by (P multiplied by C, maximum $2,306.70)) + (0.15 multiplied by (P multiplied by EI, maximum $839.97))] = [(0.15 multiplied by (52 multiplied by$51.12, maximum $2,306.70)) + (0.15 multiplied by (52 multiplied by $20.13, maximum $839.97))] = [(0.15 multiplied by ($2,658.24, maximum $2,306.70)) multiplied by (0.15 multiplied by ($1,046.76, maximum $839.97))] = (0.15 multiplied by $2,306.70) + (0.15 multiplied by $839.97) = $346.01 + $126.00 = $472.01 K2Q = [(0.15 multiplied by (P multiplied by C, maximum $2,341.65)) + (0.15 multiplied by (P multiplied by EI, maximum $674.73)) + (0.15 multiplied by (P multiplied by IE multiplied by 0.00559, maximum $368.94))] = [(0.15 multiplied by (52 multiplied by $51.89, maximum $2,341.65)) + (0.15 multiplied by (52 multiplied by $16.17, maximum $674.73)) + (0.15 multiplied by (52 multiplied by $1,100 multiplied by 0.00559, maximum $368.94))] = [(0.15 multiplied by ($2,698.28, maximum $2,341.65)) + (0.15 multiplied by($840.84, maximum $674.73)) + (0.15 multiplied by (319.75, maximum $368.94))] = (0.15 multiplied by $2,341.65) + (0.15 multiplied by$674.73) + (0.15 multiplied by$319.75) = $351.25 + $101.21 + $47.96 = $500.42 K3 = $0 K4 = The lesser of: (i) 0.15 multiplied by A; and (ii) 0.15 multiplied by $1,095 = $164.25. Step 3 Determine the annual basic federal tax, (R multiplied by A) minus K minus K1 minus K2 minus K3 minus K4. Locate the corresponding values of R and K based on A from the "2012 federal tax rates and income thresholds" table on page 27 and calculate the basic federal tax: A = $53,560.00 Federal R 0.22 ($53,560.00 multiplied by 0.22) = $11,783.20 Less federal constant K 2,989.00 Federal tax ($11,783.20 minus $2,989.00) = $8,794.20 Less federal tax credits, K1 + K2 + K3 + K4 4,868.81 Basic federal tax T3 ($8,794.20 minus $4,868.81) = $3,925.39 Step 4 Determine the federal labour-sponsored funds tax credit: LCF = The lesser of: (i) $750; and (ii) 15% of the purchase of approved shares. 0.15 multiplied by $2,000 = 300.00 Annual federal tax deduction, except for employees in Quebec, outside Canada, and in Canada beyond the limits of any province or territory (T1) ($3,925.39 minus $300.00) = $3,625.39 PAGE 45 Example 1 - For Alberta For more details, see the section called "Example - Assumptions and federal calculation" on page 43. Step 5 Determine the basic provincial tax (T4) using the following formula: (V multiplied by A) minus KP minus K1P minus K2P minus K3P (V multiplied by A) = 0.10 multiplied by $53,560 = $5,356.00 KP = $0.00 K1P = 0.10 multiplied by TCP = 0.10 multiplied by $34,564 = 3,456.40 K2P = [(0.10 multiplied by (P multiplied by C, maximum $2,306.70)) + (0.10 multiplied by(P multiplied by EI, maximum $839.97))] = [(0.10 multiplied by $2,306.70) + (0.10 multiplied by $839.97)] = $230.67 + $84.00 = 314.67 K3P = $0.00 Basic provincial tax for the year (T4) ($5,356.00 minus 0.00 minus $3,456.40 minus $341.67$ minus 0.00) = 1,584.93 Determine the annual provincial tax deduction using the following formula: T2 = T4 + V1 minus S minus LCP V1, S, and LCP = $0.00 Net provincial tax deduction for the year (T2) $1,584.93 Step 6 Total federal and provincial tax deductions for the year: T1 (see federal part of example) $3,625.39 + T2 $5,210.32 T = Tax prorated for the pay period $100.20 Example 2 - For British Columbia For more details, see the section called "Example - Assumptions and federal calculation" on page 43. Step 5 Determine the basic provincial tax (T4) using the following formula: (V multiplied by A) minus KP minus K1P minus K2P minus K3P (V multiplied by A) = 0.077 multiplied by $53,560 = $4,124.12 KP = $977.00 K1P = 0.0506 multiplied by TCP = 0.0506 multiplied by $21,318 = 1,078.69 K2P = [(0.0506 multiplied by (P multiplied by C, maximum $2,306.70)) + (0.0506 multiplied by (P multiplied by EI, maximum $839.97))] = [(0.0506 multiplied by $2,306.70) + (0.0506 multiplied by $839.97)] = $116.72 + $42.50 = 159.22 K3P = $0.00 Basic provincial tax for the year (T4) ($4,124.12 minus $977.00 minus $1,078.69 minus 159.22 minus 0.00) = $1,909.21 Determine the annual provincial tax deduction using the following formula: T2 = T4 + V1 minus S minus LCP V1 = $0.00 S = Where A1 is greater than $30,506.75 K3P = $0.00 Net provincial tax deduction for the year before LCP ($1,909.21 minus 0.00) = $1,909.21 PAGE 46 LCP = The lesser of: (i) $2,000; and (ii) 15% of the purchase of approved shares. 0.15 multiplied by $2,000 = 300.00 Net provincial tax deduction for the year (T2) ($1,909.21 minus $300.00) = $1,609.21 Step 6 Total federal and provincial tax deductions for the year: T1 (see federal part of example) $3,625.39 + T2 $5,234.60 T = Tax prorated for the pay period $100.67 Example 3 - For Manitoba For more details, see the section called "Example - Assumptions and federal calculation" on page 43. Step 5 Determine the basic provincial tax (T4) using the following formula: (V multiplied by A) minus KP minus K1P minus K2P minus K3P (V multiplied by A) = 0.1275 multiplied by $53,560 = $6,828.90 KP = $605.00 K1P = 0.108 multiplied by TCP = 0.108 multiplied by $17,268 = 1,864.94 K2P = [(0.108 multiplied by (P multiplied by C, maximum $2,306.70)) + (0.108 multiplied by (P multiplied by EI, maximum $839.97))] = [(0.108 multiplied by $2,306.70) + (0.108 multiplied by $839.97)] = $249.12 + $90.72 = 339.84 K3P = $0.00 Basic provincial tax for the year (T4) ($6,828.90 minus $605.00 minus $1,864.94 minus $449.84 minus 0.00) = $4,019.12 Determine the annual provincial tax deduction using the following formula: T2 = T4 + V1 minus S minus LCP V1 and S = $0.00 Net provincial tax deduction for the year before LCP ($4,019.12 minus 0.00) = $4,019.12 LCP = The lesser of: (i) $1,800; and (ii) 15% of the purchase of approved shares. 0.15 multiplied by $2,000 = 300.00 Net provincial tax deduction for the year (T2) ($4,019.12 minus $300.00) = $3,719.12 Step 6 Total federal and provincial tax deductions for the year: T1 (see federal part of example) $3,625.39 + T2 $7,344.51 T = Tax prorated for the pay period $141.24 Example 4 - For New Brunswick For more details, see the section called "Example - Assumptions and federal calculation" on page 43. Step 5 Determine the basic provincial tax (T4) using the following formula: (V multiplied by A) minus KP minus K1P minus K2P minus K3P (V multiplied by A) = 0.121 multiplied by $53,560 = $6,480.76 PAGE 47 KP = $1,146.00 K1P = 0.091 multiplied by TCP = 0.091 multiplied by $17,018 = 1,548.64 K2P = [(0.091 multiplied by (P multiplied by C, maximum $2,306.70)) + (0.091 multiplied by (P multiplied by EI, maximum $839.97))] = [(0.091 multiplied by $2,306.70) + (0.091 multiplied by $839.97)] = $209.91 + $76.44 = 286.35 K3P = $0.00 Basic provincial tax for the year (T4) ($6,480.76 minus 1,146.00 minus $1,548.64 minus $286.35 minus 0.00) = $3,499.77 Determine the annual provincial tax deduction using the following formula: T2 = T4 + V1 minus S minus LCP V1 and S = $0.00 Net provincial tax deduction for the year before LCP $3,499.77 LCP = The lesser of: (i) $2,000; and (ii) 20% of the purchase of approved shares. 0.2 multiplied by $2,000 = 400.00 Net provincial tax deduction for the year (T2) ($3,499.77 minus $400.00) = $3,099.77 Step 6 Total federal and provincial tax deductions for the year: T1 (see federal part of example) $3,625.39 + T2 $6,725.16 T = Tax prorated for the pay period $129.33 Example 5 - For Newfoundland and Labrador For more details, see the section called "Example - Assumptions and federal calculation" on page 43. Step 5 Determine the basic provincial tax (T4) using the following formula: (V multiplied by A) minus KP minus K1P minus K2P minus K3P (V multiplied by A) = 0.125 multiplied by $53,560 = $6,695.00 KP = $1,579.00 K1P = 0.077 multiplied by TCP = 0.077 multiplied by $14,968 = 1,152.54 K2P = [(0.077 multiplied by(P multiplied by C, maximum $2,306.70)) + (0.077 multiplied by (P multiplied by EI, maximum $839.97))] = [(0.077 multiplied by $2,306.70) + (0.077 multiplied by $839.97)] = $177.62 + $64.68 = 242.30 K3P = $0.00 Basic provincial tax for the year (T4) ($6,695.00 minus $1,579.00 minus $1,152.54 minus $242.30 minus 0.00) = $3,721.16 Determine the annual provincial tax deduction using the following formula: T2 = T4 + V1 minus S minus LCP V1 and S = $0.00 LCP = The lesser of: (i) $2,000; and (ii) 20% of the purchase of approved shares. 0.2 multiplied by $2,000 = 400.00 Net provincial tax deduction for the year (T2) ($3,721.16 minus 0.00 minus $400.00) = $3,321.16 PAGE 48 Step 6 Total federal and provincial tax deductions for the year: T1 (see federal part of example) $3,625.39 + T2 $6,946.55 T = Tax prorated for the pay period $133.59 Example 6 - For the Northwest Territories For more details, see the section called "Example - Assumptions and federal calculation" on page 43. Step 5 Determine the basic territorial tax (T4) using the following formula: (V multiplied by A) minus KP minus K1P minus K2P minus K3P (V multiplied by A) = 0.086 multiplied by $53,560 = $4,606.16 KP = $1,044.00 K1P = 0.059 multiplied by TCP = 0.059 multiplied by $26,560 = 1,567.04 K2P = [(0.059 multiplied by (P multiplied by C, maximum $2,306.70)) + (0.059 multiplied by (P multiplied by EI, maximum $839.97))] = [(0.059 multiplied by $2,306.70) + (0.059 multiplied by $839.97)] = $136.10 + $49.56 = 185.66 K3P = $0.00 Basic territorial tax for the year (T4) ($4,606.16 minus $1,044.00 minus 1,567.04 minus $185.66 minus 0.00) = $1,809.46 Determine the annual territorial tax deduction using the following formula: T2 = T4 + V1 minus S minus LCP V1, S, and LCP = $0.00 Net provincial tax deduction for the year (T2) ($1,809.45 minus 0.00) = $1,809.46 Step 6 Total federal and territorial tax deductions for the year: T1 (see federal part of example) $3,625.39 + T2 = $5,434.85 T = Tax prorated for the pay period $104.52 Example 7 - For Nova Scotia For more details, see the section called "Example - Assumptions and federal calculation" on page 43. Step 5 Determine the basic provincial tax (T4) using the following formula: (V multiplied by A) minus KP minus K1P minus K2P minus K3P (V multiplied by A) = 0.1495 multiplied by $53,560 = $8,007.22 KP = $1,823.00 K1P = 0.0879 multiplied by TCP = 0.0879 multiplied by $15,682 = 1,378.45 K2P = [(0.0879 multiplied by (P multiplied by C, maximum $2,306.70)) + (0.0879 multiplied by (P multiplied by EI, maximum $839.97))] = [(0.0879 multiplied by $2,306.70) + (0.0879 multiplied by $839.97)] = $202.76 + $73.83 = 276.59 K3P = $0.00 Basic provincial tax for the year (T4) ($8,007.22 minus $1,823.00 minus $1,378.45 minus $276.59 minus 0.00) = $4,529.18 PAGE 49 Determine the annual provincial tax deduction using the following formula: T2 = T4 + V1 minus S minus LCP V1 and S = $0.00 Net provincial tax deduction for the year before LCP ($4,529.18 minus 0.00) = $4,529.18 LCP = The lesser of: (i) $2,000; and (ii) 20% of the purchase of approved shares. 0.20 multiplied by $2,000 = 400.00 Net provincial tax deduction for the year (T2) (4,529.18 minus 400.00) = $4,129.18 Step 6 Total federal and provincial tax deductions for the year: T1 (see federal part of example) $3,625.39 + T2 $7,754.57 T = Tax prorated for the pay period $149.13 Example 8 - For Nunavut For more details, see the section called "Example - Assumptions and federal calculation" on page 43. Step 5 Determine the basic territorial tax (T4) using the following formula: (V multiplied by A) minus KP minus K1P minus K2P minus K3P (V multiplied by A) = 0.07 multiplied by $53,560 = $3,749.20 KP = $1,222.00 K1P = 0.04 multiplied by TCP = 0.04 multiplied by $24,422 = 976.88 K2P = [(0.04 multiplied by (P multiplied by C, maximum $2,306.70)) + (0.04 multiplied by (P multiplied by EI, maximum $839.97))] = [(0.04 multiplied by $2,306.70) + (0.04 multiplied by $839.97)] = $92.27 + $33.60 = 125.87 K3P = $0.00 Basic territorial tax for the year (T4) ($3,749.20 minus $1,222.00 minus $976.88 minus $125.87 minus $0.00) = $1,424.45 Determine the annual territorial tax deduction using the following formula: T2 = T4 + V1 minus S minus LCP V1, S, and LCP = $0.00 Net territorial tax deduction for the year (T2) ($1,424.45 minus 0.00) = $1,424.45 Step 6 Total federal and territorial tax deductions for the year: T1 (see federal part of example) $3,625.39 + T2 $5,049.84 T = Tax prorated for the pay period $97.11 Example 9 - For Ontario For more details, see the section called "Example - Assumptions and federal calculation" on page 43. Step 5 Determine the basic provincial tax (T4) using the following formula: (V multiplied by A) minus KP minus K1P minus K2P minus K3P (V multiplied by A) = 0.0915 multiplied by $53,560 = $4,900.74 KP = $1,600.00 PAGE 50 K1P = 0.0505 multiplied by TCP = 0.0505 multiplied by $17,391 = 878.25 K2P = [(0.0505 multiplied by (P multiplied by C, maximum $2,306.70)) + (0.0505 multiplied by (P multiplied by EI, maximum $839.97))] = [(0.0505 multiplied by $2,306.70) + (0.0505 multiplied by $839.97)] = $116.49 + $42.42 = 158.91 K3P = $0.00 Basic provincial tax for the year (T4) $2,263.58 Determine the annual provincial tax deduction using the following formula: T2 = T4 + V1 + V2 minus S minus LCP Where T4 is less than or equal to $4,213 V1 = $0.00 Sub-total ($2,263.58 minus 0.00) = $2,263.58 V2 = Where A is greater than $48,000 is less than or equal to $72,000, V2 = the lesser of: = (i) $600; and 600.00 (ii) $450 + (0.25 multiplied by (A minus $48,000)) = $450 + (0.25 multiplied by ($53,560 minus $48,000)) = $450 + (0.25 multiplied by $5,560) = $1,840. S = The lesser of: (i) T4 + V1; = $2,263.58; and (ii) [2 multiplied by ($217 + Y)] minus [T4 + V1] = [2 multiplied by ($217 + $1,203)] minus [$2,263.58 + $0] = [2 multiplied by $1,420] minus $2,263.58 = $2,840 minus $2,263.58 = $576.42. If the result is negative, S = $0. 576.42 Net provincial tax deduction for the year before LCP ($2,263.58 + $600.00 minus 576.42) = $2,287.16 LCP = $0 00 Net provincial tax deduction for the year (T2) ($2.298.16 minus 0.00) = $2,287.16 Step 6 Total federal and provincial tax deductions for the year: T1 (see federal part of example) $3,625.39 + T2 $5,912.55 T = Tax prorated for the pay period $113.70 Example 10 - For Prince Edward Island For more details, see the section called "Example - Assumptions and federal calculation" on page 43. Step 5 Determine the basic provincial tax (T4) using the following formula: (V multiplied by A) minus KP minus K1P minus K2P minus K3P (V multiplied by A) = 0.138 multiplied by $53,560 = $7,391.28 KP = $1,279.00 K1P = 0.098 multiplied by TCP = 0.098 multiplied by$14,254 = 1,396.89 PAGE 51 K2P = [(0.098 multiplied by (P multiplied byC, maximum $2,306.70)) + (0.098 multiplied by(P multiplied by EI, maximum $839.97))] = [(0.098 multiplied by $2,306.70) + (0.098 multiplied by$839.97)] = $226.06 + $82.32 = 308.38 K3P = $0.00 Basic provincial tax for the year (T4) ($7,391.28 minus $1,279.00 minus $1,396.89 minus 308.39 minus 0.00) = $4,407.01 Determine the annual provincial tax deduction using the following formula: T2 = T4 + V1 minus S minus LCP Where T4 is less than or equal to $12,500, V1 = $0 00 S and LCP = $0.00 Net provincial tax deduction for the year (T2) ($4,407.01 minus 0.00 minus 0.00) = $4,407.01 Step 6 Total federal and provincial tax deductions for the year: T1 (see federal part of example) $3,625.39 + T2 $8,032.40 T = Tax prorated for the pay period $154.47 Example 11 - For Quebec For more details, see the section called "Example - Assumptions and federal calculation" on page 43. Step 5 Total federal tax deduction for the year using K2Q values (before the Quebec tax abatement) $3,596.98 Less Quebec tax abatement of 16.5% (0.165 multiplied by T3) 643.00 Net federal tax deduction for the year (T1) ($3,596.98 minus $643.00) = $2,953.98 T = Tax prorated for the pay period $56.81 Example 12 - For Saskatchewan For more details, see the section called "Example - Assumptions and federal calculation" on page 43. Step 5 Determine the basic provincial tax (T4) using the following formula: (V multiplied by A) minus KP minus K1P minus K2P minus K3P (V multiplied by A) = 0.13 multiplied by $53,560 = $6,962.80 KP = $841.00 K1P = 0.11 multiplied by TCP = 0.11 multiplied by $46,426 = 5,106.86 K2P = [(0.11 multiplied by (P multiplied by C, maximum $2,306.70)) + (0.11 multiplied by (P multiplied by EI, maximum $839.97))] = [(0.11 multiplied by $2,306.70) + (0.11 multiplied by $839.97)] = $253.74 + $92.40 = 346.14 K3P = $0.00 Basic provincial tax for the year (T4) ($6,962.80 minus 841.00 minus 5,106.86 minus 346.14 minus 0.00) = $668.80 Determine the annual provincial tax deduction using the following formula: T2 = T4 + V1 minus S minus LCP V1 and S = $0.00 Net provincial tax deduction for the year before LCP ($668.80 minus 0.00) = $668.80 PAGE 52 LCP = The lesser of: (1) $1,000; and (2) 20% of the purchase of approved shares. 0.20 multiplied by $2,000 = 400.00 Net provincial tax deduction for the year (T2) ($668.80 minus $400.00) = $268.80 Step 6 Total federal and provincial tax deductions for the year: T1 (see federal part of example) $3,625.39 + T2 = $3,894.19 T = Tax prorated for the pay period $74.89 Example 13 - For Yukon For more details, see the section called "Example - Assumptions and federal calculation" on page 43. Step 5 Determine the basic territorial tax (T4) using the following formula: (V multiplied by A) minus KP minus K1P minus K2P minus K3P minus K4P (V multiplied by A) = 0.0968 multiplied by $53,560 = $5,184.61 KP = $1,127.00 K1P = 0.0704 multiplied by TCP = 0.0704 multiplied by $28,217 = 1,986.48 K2P = [(0.0704 multiplied by (P multiplied by C, maximum $2,306.70)) + (0.0704 multiplied by (P multiplied by EI, maximum $839.97))] = [(0.0704 multiplied by $2,306.70) + (0.0704 multiplied by $839.97)] = $162.39 + $59.13 = 221.52 K3P = $0.00 K4P = The lesser of: (i) 0.0704 multiplied by A; and (ii) 0.0704 multiplied by $1,095. 0.0704 multiplied by $1,095 = 77.09 Basic territorial tax for the year (T4) ($5,184.61 minus $1,127.00 minus $1,986.48 minus $221.52 minus 0.00 minus $77.09) = $1,772.52 Determine the annual territorial tax deduction using the following formula: T2 = T4 + V1 minus S minus LCP Where T4 is less than or equal to $6,000, V1 = $0.00 S = $0.00 Net territorial tax deduction for the year before LCP $1,772.52 LCP = The lesser of: (i) $1,250; and (ii) 25% of the purchase of approved shares. 0.25 multiplied by $2,000 = 500.00 Net territorial tax deduction for the year (T2) ($1,772.52 minus $500.00) = $1,272.52 Step 6 Total federal and territorial tax deductions for the year: T1 (see federal part of example) $3,625.39 + T2 $4,897.91 T = Tax prorated for the pay period $94.19 PAGE 53 Example 14 - For outside Canada and in Canada beyond the limits of any province or territory For more details, see the section called "Example - Assumptions and federal calculation" on page 43. Step 5 Total federal tax deduction for the year before surtax for outside Canada or in Canada beyond the limits of any province or territory (see federal part of example) $3,625.39 Federal tax of 48% for employees working outside Canada or in Canada beyond the limits of any province or territory (0.48 multiplied by T3) 1,884.19 Total federal tax deduction for the year (T1) $5,509.58 T = Tax prorated for the pay period $105.95 Testing results - Example The following example provided below is for those of you that simply want to test your results against ours. Julie is a single employee with no deductions and only claims the basic personal amounts. Below are Julie's results for three different scenarios: \\\ Annual Income Alta. P = 12 I = $1,800 T= $130.12 P = 26 I = $2,300 T= $455.56 P = 52 I = $2,500 T = $694.07 B.C. P = 12 I = $1,800 T= $118.91 P = 26 I = $2,300 T= $415.44 P = 52 I = $2,500 T= $700.99 Man. P = 12 I = $1,800 T = $209.97 P = 26 I = $2,300 T = $525.18 P = 52 I = $2,500 T = $822.35 N.B. P = 12 I = $1,800 T = $189.12 P = 26 I = $2,300 T = $495.13 P = 52 I = $2,500 T = $747.44 N.L. P = 12 I = $1,800 T = $182.36 P = 26 I = $2,300 T = $497.19 P = 52 I = $2,500 T = $758.52 N.W.T. P = 12 I = $1,800 T = $139.46 P = 26 I = $2,300 T = $424.50 P = 52 I = $2,500 T = $697.58 N.S. P = 12 I = $1,800 T = $191.54 P = 26 I = $2,300 T = $538.96 P = 52 I = $2,500 T = $831.72 Nun. P = 12 I = $1,800 T = $131.89 P = 26 I = $2,300 T = $394.51 P = 52 I = $2,500 T = $641.73 Ont. P = 12 I = $1,800 T = $158.79 P = 26 I = $2,300 T = $451.74 P = 52 I = $2,500 T = $765.43 P.E.I. P = 12 I = $1,800 T = $207.80 P = 26 I = $2,300 T = $531.43 P = 52 I = $2,500 T = $829.77 Que. P = 12 I = $1,800 T = $87.00* P = 26 I = $2,300 T = $252.97* P = 52 I = $2,500 T = $403.03* * Note: Quebec calculates provincial tax separately, so only the federal part was calculated. Sask. P = 12 I = $1,800 T = $154.09 P = 26 I = $2,300 T = $494.26 P = 52 I = $2,500 T = $757.69 Yk. P = 12 I = $1,800 T = $154.13 P = 26 I = $2,300 T = $442.64 P = 52 I = $2,500 T = $703.35 Outside Canada P = 12 I = $1,800 T = $155.25 P = 26 I = $2,300 T = $450.12 P = 52 I = $2,500 T = $715.36 \\\ Example-only for employees remunerated by commission This example is for an employee remunerated by commission and working in the province of Saskatchewan. The total of personal tax credits amounts on Form TD1 is $10,822 and on Form TD1SK $14,942. On Form TD1X, the employee has indicated total remuneration (I1) of $60,000 and total expenses (E) of $4,000. Registered pension plan contributions are $2,000 for the year. The employee has bought, by payroll deductions, $2,000 of approved shares of the capital stock of prescribed labour-sponsored venture capital corporations. The employer has received authorization from a tax services office to reduce the amount subject to income tax withholdings by a $7,800 annual deduction. The current commission payment (G) is $1,500. PAGE 54 Step 1 Determine A using the following formula: A = I1 minus F minus F2 minus HD minus F1 minus E = $60,000 minus $2,000 minus $0 minus $0 minus $7,800 minus $4,000 = $46,200.00 Step 2 Determine K1, K2, K3, and K4 using the following formulas: K1 = 0.15 multiplied by TC = 0.15 multiplied by $10,822 = $1,623.30 K2 = [(0.15 multiplied by (0.0495 multiplied by (I1 minus $3,500)*, maximum $2,306.70)) + (0.15 multiplied by ((0.0183 multiplied by I1), maximum $839.97))] * If the result is negative, substitute $0. = [(0.15 multiplied by (0.0495 multiplied by ($60,000 minus $3,500)*, maximum $2,306.70)) + (0.15 multiplied by (0.0183 multiplied by $60,000, maximum $839.97))] = [(0.15 multiplied by (0.0495 multiplied by $56,500, maximum $2,306.70)) + (0.15 multiplied by($1,098, maximum $839.97))] = [(0.15 multiplied by ($2,796.75, maximum $2,306.70)) + (0.15 multiplied by $839.97)] = [(0.15 multiplied by$2,306.70) + $126.00] = $346.01 + $126.00 = $472.01 K3 = $0 K4 = The lesser of: (i) 0.15 multiplied by A; and (ii) 0.15 multiplied by $1,095 = 0.15 multiplied by $1,095 = $164.25. Step 3 Determine the annual basic federal tax, (R multiplied by A) minus K minus K1 minus K2 minus K3 minus K4. Locate the corresponding values of R and K based on A, from the "2012 federal tax rates and income thresholds" table on page 27 and calculate the basic federal tax: A = $46,200.00 Federal R 0.22 ($46,200.00 multiplied by 0.22) = $10,164.00 Less federal constant K 2,989.00 Federal tax ($10,164.00 minus $2,989.00) = $7,175.00 Less federal tax credits, K1 + K2 + K3 + K4 2,259.55 Basic federal tax (T3) ($7,175.00 minus $2,259.55) = $4,915.45 Step 4 Determine the federal labour-sponsored funds tax credit: LCF = the lesser of: (i) $750; and (ii) 15% of the purchase of approved shares. 0.15 multiplied by $2,000 = 300.00 Annual federal tax deduction, except for employees in Quebec, outside Canada, and in Canada beyond the limits of any province or territory (T1) ($4,915.45 minus $300.00) = $4,615.45 Step 5 Determine the basic provincial tax (T4) using the following formula: (V multiplied by A) minus KP minus K1P minus K2P minus K3P (V multiplied by A) = 0.13 multiplied by $46,200 = $6,006.00 KP = $841.00 PAGE 55 K1P = 0.11 multiplied by TCP = 0.11 multiplied by $14,942 = 1,643.62 K2P = [(0.11 multiplied by (0.0495 multiplied by(I1 minus $3,500)*, maximum $2,306.70)) + (0.11 multiplied by ((0.0183 multiplied by I1), maximum $839.97))] * If the result is negative, substitute $0. = [(0.11 multiplied by (0.0495 multiplied by ($60,000 minus $3,500)*, maximum $2,306.70)) + (0.11 multiplied by (0.0183 multiplied by $60,000, maximum $839.97))] = [(0.11 multiplied by (0.0495 multiplied by $56,500, maximum $2,306.70)) + (0.11 multiplied by ($1,098, maximum $839.97))] = [(0.11 multiplied by ($2,796.75, maximum $2,306.70)) + (0.11 multiplied by $839.97)] = [(0.11 multiplied by $2,306.70) + $92.40] = $253.74 + $92.40 = $346.14 K3P = $0.00 Basic provincial tax for the year (T4) ($6,006.00 minus $841.00 minus $1,643.62 minus $346.14 minus $0.00) = $3,175.24 Determine the annual provincial tax deduction using the following formula: T2 = T4 + V1 minus S minus LCP V1 and S = $0.00 Net provincial tax deduction for the year before LCP ($3,175.24 minus 0.00) = $3,175.24 Step 6 Determine the provincial labour-sponsored funds tax credit: LCP = The lesser of: (1) $1,000; and (2) 20% of the purchase of approved shares of the capital stock of a prescribed labour-sponsored venture capital corporation. 0.20 multiplied by $2,000 = 400.00 Net provincial tax deduction for the year (T2) ($3,175.24 minus $400.00) = $2,775.24 Step 7 Calculate the tax to be deducted on the commission payment of $1,500, factor G: T = [(T1 + T2) divided by (I1 divided by G)] + L = [($4,615.45 + $2,775.24 divided by ($60,000 divided by $1,500)] + $0 = $7,390.69 divided by 40 + $0 = $184.77 Step 8 For all later payments (such as commission, salary, and bonus) change the G value amount of $1,500 in Step 7 to calculate the appropriate amount of tax deduction at source. Example-only for employees in the hotel and restaurant business in Quebec As a result of legislation introduced in the province of Quebec, employees in the hotel and restaurant business who receive income from tips and gratuities have to declare this income to their employers. Since January 1, 1998, you have to include tips declared by these employees when you calculate insurable earnings for purposes of employment insurance (EI). You have to include these tips when you determine federal income tax deductions. Report the tips and deductions on the T4 slip. When you include the declared tips and gratuities in income, the deductions may be greater than the cash salary or wages paid. Payroll deductions cannot be more than the amount of salary and wages paid. To make sure that the deductions are not more than the salary or wages, you will have to reduce the deductions until the net pay is no longer negative. When you reduce the payroll deductions, you have to reduce them in a particular order, as specified in the Quebec legislation. First reduce Quebec provincial tax, and then reduce in the following order, union dues, Quebec parental insurance premiums, and Quebec Pension Plan contributions. If the net pay is still negative, reduce the federal tax withholding. Any shortfall of federal or provincial tax will be determined when the individuals file their income tax and benefit returns. PAGE 56 In some cases, when QPP and QPIP are reduced, you may have to increase federal tax to reflect the change in the federal tax credit for QPP and QPIP contributions (factor K2). The following will explain how to recalculate the federal tax to allow a credit more closely approximating the actual QPP and QPIP deduction for the pay period. After you have calculated the QPP, EI, and federal tax deductions based on the total income (tips plus salary) for the pay period, check whether there is enough net pay available to cover the full QPP contribution. Find: N = Net pay available for QPP deduction. If negative, N = $0. = This will be the cash net pay after all deductions including EI premiums and federal tax, but before QPP and QPIP contributions and Quebec provincial tax. If N is negative or $0, or if it is greater than the QPP contribution required, you will not need to adjust the K2 tax credit, since recalculation will not change the federal tax deduction. Next, find: CQ = The maximum QPP deduction based on available net pay. = The lesser of: (i) C, the QPP contribution for the pay period; and (ii) N, the net pay available for the QPP deduction. Next, recalculate the employee's federal tax by replacing C in the K2 tax credit calculation with factor CQ. For this calculation routine, you will need to recalculate K2, T3, and T1 based on the QPP deduction for the pay period, instead of the QPP contribution normally calculated. Use factors called K2Q, T3Q, and T1Q for these calculations. The formulas for these factors are shown in the example below. After you find T1Q, determine the federal tax deduction, as follows: T = The greater of: (i) (T1 divided by P) + L; and (ii) (T1Q divided by P) + L. Example This is an example of an employee in the hotel and restaurant business in Quebec. The employer uses 26 (biweekly) pay periods. The employee is paid $70 in wages and declares $700 in tips and gratuities. Other factors, such as F, F1, and U1 are $0. The employee claims the basic personal amount on Form TD1. This example uses the formulas in effect on January 1, 2012. Step 1 - Regular payroll deductions calculations For simplicity of presentation, only the results of the regular calculations are shown in this step. A = $20,020.00 EI = $11.32 K2 = $185.47 C = $31.93 K1 = $1,623.30 T1 = $860.03 K4 = $164.25 Step 2 - Extra calculations for employees in the hotel and restaurant business in Quebec N = Net pay available for QPP deduction. If negative, N = $0. = Cash income for the pay period minus EI premiums for the pay period minus federal tax for the pay period = $70 minus $11.32 minus ($860.03 divided by 26). If negative, N = $0. = $70 minus $11.32 minus $33.08 = $25.60 CQ = The maximum QPP deduction based on available net pay = The lesser of: (i) $31.93, the QPP contribution for the pay period; and (ii) $25.60, the net pay available for the QPP deduction = $25.60. PAGE 57 K2Q = Federal tax credit for the year based on the QPP deduction (CQ) = [(0.15 multiplied by (P multiplied by CQ, maximum $2,341.65)) + (0.15 multiplied by (P multiplied by EI, maximum $674.73)) = [(0.15 multiplied by (26 multiplied by $25.60, maximum $2,341.65)) + (0.15 multiplied by (26 multiplied by $11.32, maximum $674.73)) = (0.15 multiplied by $665.60) + (0.15 multiplied by $294.32) = $99.84 + $44.15 = $143.99 T3Q = Basic federal tax based on K2Q = (R multiplied by A) minus K minus K1 minus K2Q minus K3 minus K4, if the result is negative, T3Q = $0. = (0.15 multiplied by $20,020) minus $0 minus $1,623.30 minus $143.99 minus $0 minus $164.25 = $3,003.00 minus $1,623.30 minus $143.99 minus $164.25 = $1,071.46 T1Q = Annual federal tax for Quebec based on T3Q = (T3Q minus LCF)* minus (T3Q multiplied by 0.165) * If the result is negative, substitute $0. = ($1,071.46 minus $0) minus ($1,071.46 multiplied by 0.165) = $1,071.46 minus $176.79 = $894.67 Step 3 - Adjusted federal tax deduction for the pay period T = The greater of: (i) (T1 divided by P) + L = ($860.03 divided by 26) + $0 = $33.08; and (ii) (T1Q divided by P) + L = ($894.67 divided by 26) + $0 = $34.41. = $34.41 Step 4 - Adjusted QPP deduction for the pay period For purposes of the employee's pay statement, determine the actual QPP deduction based on the new available net pay. The new available net pay = $70 minus $11.32 (EI) minus $34.41 (revised tax) = $24.27 (available net pay). Therefore, the employee's QPP deduction is $24.27. Although this QPP deduction is less than the $25.60 QPP amount used in the revised tax calculation, a second or later recalculation of federal tax is not required. Include the $24.27 QPP deduction in your remittance to Revenu Québec. Include the $11.32 EI deduction and the $34.41 federal tax deduction in your remittance to the Canada Revenue Agency. Option 2 - Tax formula based on cumulative averaging Option 2 formulas are intended for employees whose remuneration varies considerably from one pay period to the next. In the Option 2 formulas, the amount of tax to be deducted is based on the projected annual taxable income (including bonuses) compared to the amount of tax already deducted in the year. Option 2 works well for employees who are employed for a full calendar year. If the employee's income is relatively stable for each pay period, there will not be a significant difference in the tax deductions with Option 2 compared to Option 1. The following sections will explain in detail how Option 2 works. The initialism YTD used in this option means year-to-date, and will include payments or deductions for the current year, but will not include the payment payable now and the deductions for the current pay period. Calculation of income In Option 2, the actual year-to-date income plus the current income is projected over the rest of the pay periods in the year. For example, an employee received $20,000 total in 20 previous pay periods and $500 in the current pay period, and there are 5 pay periods left. The projected income for the year using Option 2 will be $25,380.95 [($20,000 + $500) multiplied by 26 divided by 21]. When you determine year-to-date income, you have to use the year-to-date taxable income. Therefore, you will have to store and use the year-to-date values for each pay period factor, such as RPP (factor F) and union dues (U1). PAGE 58 Calculation of tax for the pay period For Option 2, you calculate the tax on the projected income for the year, and then find the tax amount that is proportional to the number of pay periods that have occurred (including the current pay period). Compare the result to the tax deducted in the year-to-date. The difference is the tax payable on the current income. Continuing the above example, if the total federal and provincial or territorial tax on $25,380.95 is $3,560.17, the proportional year-to-date tax is $2,875.52 ($3,560.17 divided by 26 multiplied by 21.). If the total tax deducted year-to-date is $2,736.40, the tax on the current income of $500 is $139.12 ($2,875.52 minus $2,736.40). The tax values used in this example are fictitious. Special situations When the employer changes tax options during the year, it is recommended that they reset the S1 factor to the first pay period. For example, if an employer's pay period is weekly and the tax option is changed for the first pay period after July 1, then S1 should be reset to 52 divided by 1 instead of 52 divided by 27. In this way, the tax deductions that have been made under the previous option are not considered when calculating the deductions under the new option. This modification could also apply when an employee starts employment with you during the year. When there are tax changes during the year, the first pay period after the change will show a significant adjustment to balance the new annual tax with the tax deducted at the old rates. We recommend that you reduce this impact by resetting the S1 factor or by averaging the tax increase or decrease over the rest of the pay periods. Note If an employee or a pensioner has income from another source from which no tax has been deducted (for example, investment income or rental income), a possible tax liability could exist when filing an income tax and benefit return for the year. The employee or pensioner can ask for more tax deductions, factor L, using Form TD1. Formula to calculate annual taxable income (A) A = Projected annual taxable income = [S1 multiplied by (I minus F minus F2 minus U1)] + B1 minus HD minus F1 If the result is negative, A = $0. S1 = Annualizing factor = This is a set of two numbers: the number of the employer's or payer's total pay periods (or, optionally, the employee's pay periods where the periods worked are less than the employer's or payer's total pay periods), divided by the applicable number of the current pay period. For examples, see the chart below. Also, see the information under "Special situations" on page 58. \\\ Examples First pay period, S1 = 52pp: 52 over 1 26pp: 26 over 1 24pp: 24 over 1 12pp: 12 over 1 Second pay period, S1 = 52pp: 52 over 2 26pp: 26 over 2 24pp: 24 over 2 12pp: 12 over 2 Third pay period, S1 = 52pp: 52 over 3 26pp: 26 over 3 24pp: 24 over 3 12pp: 12 over 3 Etc., last pay period, S1 = 52pp: 52 over 52 26pp: 26 over 26 24pp: 24 over 24 12pp: 12 over 12 \\\ I = Gross remuneration for the pay period. This includes overtime earned and paid in the same pay period, pension income, qualified pension income, and taxable benefits, plus IYTD, but does not include amounts in factor B. F = Payroll deductions for the pay period for employee contributions to a registered pension plan for current and past services, a registered retirement savings plan (RRSP), or a retirement compensation arrangement plus FYTD Note We have not repeated the entire explanation for this factor. For full details, see the description under Option 1. F2 = Alimony or maintenance payments required by a legal document dated before May 1, 1997, to be deducted at source from the employee's salary for the pay period plus F2YTD. The legal document could be a garnishment or a similar order of a court or competent tribunal. PAGE 59 Note We have not repeated the entire explanation for this factor. For full details, see the description under Option 1. U1 = Union dues for the pay period, plus U1YTD. B1 = Year-to-date (before this pay period) non-periodic payments such as bonuses, retroactive pay increases, vacation pay when vacation is not taken, and accumulated overtime. Since tax on a current non-periodic payment is calculated separately, do not include the current non-periodic payment in this calculation of A. For an illustration, see "Option 2 - Step-by-step example when calculating tax deductions separately on periodic and non- periodic payments" on page 62. Note For overtime earned and paid in the same pay period, the payment is included with the I factor. Also, when the employee receives vacation pay and takes vacation, the income is included in the I factor. If you want to make deductions such as RRSP contributions from the bonus payment, see the instructions in Option 1, page 30, regarding the use of factors F3 and F4. HD = Annual deduction for living in a prescribed zone as indicated on Form TD1 To determine whether or not he or she resided in a prescribed zone, an employee or pensioner should contact the local tax services office or tax centre. F1 = Annual deductions (such as child care expenses, as well as alimony and maintenance payments not deducted at source from the employee's salary) requested by an employee or pensioner and authorized by a tax services office or tax centre. The employer or payer will be informed by a tax services office or tax centre of the amount to be used with F1, when such an amount applies. Formula to calculate basic federal tax (T3) T3 = Annual basic federal tax. = (R multiplied by A) minus K minus K1 minus K2 minus K3 minus K4 If the result is negative, T3 = $0. Only for employees in Quebec: T3 = Annual basic federal tax = (R multiplied by A) minus K minus K1 minus K2Q minus K3 minus K4 If the result is negative, T3 = $0. R = Federal tax rate that applies to the annual taxable income A. See the "Federal tax rates and income thresholds for 2012" table below. \\\ \\ federal tax rates and income thresholds for 2012 Annual taxable income A: More than $0 - Not more than $42,707 Rate R: 0.15 Constant K: $0 More than 42,707 - Not more than 85,414 Rate R: 0.22 Constant K: 2,989 More than 85,414 - Not more than 132,406 Rate R: 0.26 Constant K: 6,406 More than 132,406 and over Rate R: 0.29 Constant K: 10,378 \\\ \\ A = Projected annual taxable income K = Federal constant to adjust application of the federal rate to the total annual taxable income A. See the "Federal tax rates and income thresholds for 2012" table above. K1 = Non-refundable personal tax credit = 0.15 multiplied by TC Note 0.15 = The appropriate percentage for the year. The appropriate percentage is the lowest percentage referred to in the "Federal tax rates and income thresholds for 2012" table above. PAGE 60 Where: \\ TC = The total personal tax credits amounts reported on Form TD1. If Form TD1 is not filed by the employee or pensioner, TC is $10,822, and for non- resident individuals, TC is $0. If the claim code is E, T = $0. If you have the federal tax credit amount for the employee or pensioner for 2011, see the section called "Indexing of personal amounts" on page 14. \\ Note If the province is Ontario, even if the claim code is E, the Ontario health premium is payable on annual income over $20,000. K2 = Canada Pension Plan contribution and employment insurance premium federal tax credits for the year \\ = [(0.15 multiplied by (0.0495 multiplied by ((S1 multiplied by PI) + B1 minus $3,500)*, maximum $2,306.70)) + (0.15 multiplied by (0.0183 multiplied by ((S1 multiplied by IE) + B1), maximum $839.97))] \\ Only for employees in Quebec: \\ K2Q = Quebec Pension Plan contributions, employment insurance premiums, and Quebec parental insurance plan premiums federal tax credits for the year. = [(0.15 multiplied by (0.05025 multiplied by ((S1 multiplied by PI) + B1 minus $3,500)*, maximum $2,341.65)) + (0.15 multiplied by (0.0147 multiplied by((S1 multiplied by IE) + B1), maximum $674.73)) + (0.15 multiplied by (0.00559 multiplied by S1 multiplied by IE) + B1), max $368.94))] \\ Note * If the result is negative, substitute $0. Where: PI = Pensionable income for the pay period, or the gross income plus any taxable benefits for the pay period, plus PIYTD IE = Insurable earnings for the pay period including insurable taxable benefits for the pay period, plus IEYTD The above is subject to the rules contained in Part B and Part C of this publication and instructions contained in the employers' guide called Payroll Deductions and Remittances. K3 = Other federal tax credits (such as medical expenses and charitable donations requested by an employee or pensioner and authorized by the tax services office or tax centre). The tax services office or tax centre will inform the employer or payer of the amount to be used with K3. If no amount has been authorized, K3 = $0. K4 = Canada employment credit = The lesser of: \\ (i) 0.15 multiplied by A; and (ii) 0.15 multiplied by $1,095. \\ Note For the Canada employment credit, A is the annual gross income from office or employment before deductions. This is the same amount you normally report in box 14 of the T4 slip(s). As administrative relief, you are authorized to use the regular factor A (annual taxable income) for this calculation, except when the total income is superannuation or pension benefits. Formula to calculate the federal tax payable (T1) T1 = Annual federal tax deduction except for Quebec, outside Canada, and in Canada beyond the limits of any province or territory = (T3 minus LCF)* * If the result is negative, substitute $0. Only for Quebec: T1 = (T3 minus LCF)* minus (0.165 multiplied by T3) * If the result is negative, substitute $0. Only for outside Canada or in Canada beyond the limits of any province or territory: T1 = [T3 + (0.48 multiplied by T3) minus LCF]* * If the result is negative, substitute $0. PAGE 61 T3 = Annual basic tax LCF = Labour-sponsored funds federal tax credit = The lesser of: (i) $750; and (ii) 15% of the amount deducted or withheld during the year for the acquisition by the employee of approved shares of the capital stock of a prescribed labour-sponsored venture capital corporation. Note If the shares are invested in an RRSP, then the amount invested can be used to determine the annual taxable income amount. Formula to calculate provincial and territorial tax payable (T2) We have not repeated the entire explanation for the provincial and territorial variables. Effective January 1, 2012, the variables for Option 2 are the same as Option 1, except for factor K2P, which is as follows: \\ K2P = [(Lowest provincial or territorial tax rate multiplied by (0.0495 multiplied by((S1 multiplied by PI) + B1 minus $3,500)*, maximum $2,306.70)) + (lowest provincial or territorial tax rate multiplied by (0.0183 multiplied by ((S1 multiplied by IE) + B1), maximum $839.97))] \\ * If the result is negative, substitute $0. Replace the lowest provincial or territorial tax rate with the appropriate rate for the province or territory that applies to the employee or pensioner. Only for Quebec: T2 = $0 Only for outside Canada or in Canada beyond the limits of any province or territory: T2 = $0 Formula to calculate tax deductions (T) for the pay period T = Estimated federal and provincial or territorial tax deduction for the pay period = [((T1 + T2 minus M1) divided by S1) minus M]* + L * If the result is negative, T = L. The resulting amount can be rounded to the nearest multiple of $0.05 or $0.01. Only for employees in Quebec, outside Canada, and in Canada beyond the limits of any province or territory: T = Estimated federal tax deduction for the pay period** = [((T1 minus M1) divided by S1) minus M]* + L * If the result is negative, T = L. The resulting amount can be rounded to the nearest multiple of $0.05 or $0.01. ** Note Quebec employers whose employees receive income from tips and gratuities should review the section called "Example-only for employees in the hotel and restaurant business in Quebec" on page 55. T1 = Annual federal tax deduction T2 = Annual provincial or territorial tax deduction S1 = Annualizing factor M = Accumulated federal and provincial (or territorial) tax deductions on periodic payments such as salary, wages, and taxable benefits, if any, to the last pay period. Do not include any year-to-date extra tax deductions requested by the employee, factor L. Tax previously deducted on non-periodic payments such as bonuses, is included in factor M1. PAGE 62 M1 = Accumulated federal and provincial (or territorial) tax deductions on non-periodic payments such as bonuses, if any, to the last pay period. Do not include any year-to-date extra tax deductions for the year requested by the employee, factor L, or any tax included in factor M. The T factor (tax deduction for the pay period) will not include the tax on the non-periodic payment. The tax to be deducted on a current non-periodic payment is kept in another field (TB). TB = Estimated federal and provincial or territorial tax deduction on a non- periodic payment for the pay period = Step 1 minus Step 2 below (if negative, TB = $0) $tep 1 Projected annual taxable income including B1 and B payable now = [S1 multiplied by (I minus F minus F2 minus U1)] + B1 + B minus HD minus F1 Step 2 Projected annual taxable income including B1, but not B payable now = [S1 multiplied by (I minus F minus F2 minus U1)] + B1 minus HD minus F1 L = Extra tax deductions for the pay period as reported on Form TD1 Note To cancel the election to have more tax deducted, the employee or pensioner must file a new Form TD1 and enter $0 at the item called "Additional tax to be deducted." Option 2 - Step-by-step example when calculating tax deductions separately on periodic and non-periodic payments This example is based on pay period 14 from the chart for the Province of Nova Scotia on page 67. In pay period 14, the employee receives current salary or wages of $740 and a bonus (B) of $500. The year-to-date income (I) from pay period 13 is $8,715 and the employee received two previous non- periodic payments (bonuses) amounting to $150 (B1). The F, F2, U1, HD, F1, and K3 are $0. The year-to-date tax deducted (M) from pay period 14 is $686.83. The year-to- date tax on previous bonuses (M1) is $33.26. In this example, the TD1 forms filed by the employee are for January 2012. They show total federal personal tax credits of $10,822 (TC) and provincial personal tax credits of $8,481 (TCP). All of the employee's income is subject to CPP and EI deductions. This example shows the following steps: Step 1 - Calculation of annual tax on year to date income including current periodic payment and previous and current bonuses Step 2 - Calculation of annual tax on year-to-date income including current periodic payment and previous bonuses only Step 3 - Calculation of tax deduction (T) on current periodic payment Step 4 - Calculation of tax deduction (TB) on current bonus payment Changes in this section are not shaded. Step 1 - Calculation of annual tax on year-to-date income including B1 and B Determine the projected annual taxable income A: A = [S1 multiplied by (I minus F minus F2 minus U1)] + B1 + B minus HD minus F1 = [26 divided by 14 multiplied by ($9,455 minus $0 minus $0 minus $0)] + $150 + $500 minus $0 minus $0 = $17,559.29 + $150 + $500 = $18,209.29 Determine the K1, K2, K3, and K4 credits: K1 = 0.15 multiplied by TC = 0.15 multiplied by $10,822 = $1,623.30 K2 = [(0.15 multiplied by (0.0495 multiplied by ((S1 multiplied by PI) + B1 + B minus $3,500)*, maximum $2,306.70)) + (0.15 multiplied by (0.0183 multiplied by ((S1 multiplied by IE) + B1 + B), maximum $839.97))] * If the result is negative, substitute $0. PAGE 63 = [(0.15 multiplied by (0.0495 multiplied by (($18,209.29 minus $3,500)*, maximum $2,306.70)) + (0.15 multiplied by (0.0183 multiplied by $18,209.29, maximum $839.97))] = [(0.15 multiplied by $728.11) + (0.15 multiplied by$333.23)] = $109.22 + $49.98 = $159.20 K3 = $0 K4 = The lesser of: (i) 0.15 multiplied by A; and (ii) 0.15 multiplied by$1,095 = 0.15 multiplied by$1,095 = $164.25. Determine T3, annual basic federal tax: T3 = (R multiplied by A) minus K minus K1 minus K2 minus K3 minus K4 = (0.15 multiplied by $18,209.29) minus $0 minus $1,623.30 minus $159.20 minus $0 minus $164.25 = $2,731.39 minus $0 minus $1,623.30 minus $159.20 minus $0 minus $164.25 = $784.64 Determine the total federal tax deduction for the year: T1 = (T3 minus- LCF)* * If the result is negative, substitute $0. = $784.64 minus $0 = $784.64 Determine the total provincial tax deduction for the year: T2 = T4 + V1 minus S minus LCP If the result is negative, T2 = $0. Where: T4 = (V multiplied by A) minus KP minus K1P minus K2P minus K3P Where V and KP are determined based on the value of A in the "2012 Nova Scotia tax rates and income thresholds" table. (V multiplied by A) = 0.0879 multiplied by $18,209.29 = $1,600.60 KP = $0 K1P = 0.0879 multiplied by TCP = 0.0879 multiplied by $8,481 = $745.48 K2P = [(0.0879 multiplied by (0.0495 multiplied by ((S1 multiplied by PI) + B1 + B minus $3,500)*, maximum $2,306.70)) + (0.0879 multiplied by (0.0183 multiplied by ((S1 multiplied by IE) + B1 + B), maximum $839.97))] * If the result is negative, substitute $0. = [(0.0879 multiplied by (0.0495 multiplied by $18,209.29 minus $3,500)*, maximum $2,306.70)) + (0.0879 multiplied by (0.0183 multiplied by $18,209.29, maximum $839.97))] = [(0.0879 multiplied by $728.11) + (0.0879 multiplied by $333.23)] = $64.00 + $29.29 = $93.29 K3P = $0 T4 = (V multiplied by A) minus KP minus K1P minus K2P minus K3P = $1,600.60 minus $0 minus $745.48 minus $93.29 minus $0 = $761.83 T2 = T4 + V1 minus S minus LCP If the result is negative, T2 = $0. = $761.83 + $0 minus $0 minus $0 = $761.83 PAGE 64 Step 2 - Calculation of annual tax on year-to-date income including B1 only A = [S1 multiplied by (I minus F minus F2 minus U1)] + B1 minus HD minus F1 = $17,709.29 K1 = 0.15 multiplied by TC = $1,623.30 K2 = [(0.15 multiplied by (0.0495 multiplied by ((S1 multiplied by PI) + B1 minus $3,500)*, maximum $2,306.70)) + (0.15 multiplied by (0.0183 multiplied by ((S1 multiplied by IE) + B1), maximum $839.97))] * If the result is negative, substitute $0. = [(0.15 multiplied by $703.36) + (0.15 multiplied by $324.08)] = $154.11 K3 = $0 K4 = 0.15 multiplied by $1,095 = $164.25 T3 = (R multiplied by A) minus K minus K1 minus K2 minus K3 minus K4 = (0.15 multiplied by $17,709.29) minus $0 minus $1,623.30 minus $154.11 minus $0 minus $164.25 = $714.73 T1 = T3 minus LCF = $714.73 minus $0 $714.73 T2 = T4 + V1 minus S minus LCP If the result is negative, T2 = $0. Where: T4 = (V multiplied by A) minus KP minus K1P minus K2P minus K3P Where V and KP are determined based on the value of A in the "2012 Nova Scotia tax rates and income thresholds" table (V multiplied by A) = 0.0879 multiplied by $17,709.29 = $1,556.65 KP = $0 K1P = 0.0879 multiplied by TCP = $745.48 K2P = [(0.0879 multiplied by (0.0495 multiplied by ((S1 multiplied by PI) + B1 minus $3,500)*, maximum $2,306.70)) + (0.0879 multiplied by (0.0183 multiplied by((S1 multiplied by IE) + B1), maximum $839.97))] * If the result is negative, substitute $0. = [(0.0879 multiplied by $703.36) + (0.0879 multiplied by $324.08)] = $90.32 K3P = $0 T4 = (V multiplied by A) minus KP minus K1P minus K2P minus K3P = $1,556.65 minus $0 minus $745.48 minus $90.32 minus $0 = $720.85 T2 = T4 + V1 minus S minus LCP If the result is negative, T2 = $0. = $720.85 Step 3 - Calculation of tax deduction on current periodic payment (T) T = [((T1 + T2 minus M1) divided by S1) minus M] + L If the result is negative, T = $0. = [(($714.73 + 720.85 minus $33.26) multiplied by 14 divided by 26) minus $686.83] + $0 = [($1,402.32 multiplied by 14 divided by 26) minus $686.83] + $0 = [$755.10 minus $686.83] + $0 = $68.27 PAGE 65 Step 4 - Calculation of tax deduction on current bonus payment (TB) TB = (T1 + T2 in Step 1) minus (T1 + T2 in Step 2) = ($784.64 + $761.83) minus ($714.73 + $720.85) = $1,546.47 minus $1,435.58 = $110.89 Option 2 - Examples when calculating the tax deductions on salary and non- periodic payments separately On the following pages you will find examples for all provinces and territories of the results expected when using Option 2 to calculate separately the tax on regular salary and on non-periodic payments. A biweekly (26) pay period and the optional non-periodic payment formula are used in these examples. PAGE 66 Option 2 - Examples when calculating the tax deductions on salary and non- periodic payments separately (continued) Alberta PP 1 Salary: 740 I YTD: 740 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 1,841.32 T2: 82.68 (T1 + T2 minus M1) divided by S1: 38.90 T: 38.90 PP 2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 1,841.32 T2: 82.68 (T1 + T2 minus M1) divided by S1: 77.80 M: minus 38.90 T: 38.90 PP 3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 1,841.32 T2: 82.68 (T1 + T2 minus M1) divided by S1: 116.71 M: minus 77.80 T: 38.91 PP 4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 1,841.32 T2: 82.68 (T1 + T2 minus M1) divided by S1: 155.61 M: minus 116.71 T: 38.90 PP 4B I YTD: 2,960 B Current: 100 B1: 100 A: 19,340.00 K1 + K2 + K4: 1,958.25 T1: 942.75 K1P + K2P: 1,842.00 T2: 92.00 (T1 + T2 minus M1) divided by S1: see* M: minus 155.61 TB: 23.30 PP 5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 + K2 + K4: 1,955.08 T1: 899.12 K1P + K2P: 1,839.88 T2: 62.92 M1: minus 23.30 (T1 + T2 minus M1) divided by S1: 180.53 M: minus 155.61 T: 24.92 PP 6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 + K2 + K4: 1,945.47 T1: 767.03 K1P + K2P: 1,833.48 T2: 0.00 M1: minus 23.30 (T1 + T2 minus M1) divided by S1: 171.63 M: minus 180.53 T: 0.00 PP 7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 + K2 + K4: 1,945.03 T1: 760.97 K1P + K2P: 1,833.18 T2: 0.00 M1: minus 23.30 (T1 + T2 minus M1) divided by S1: 198.60 M: minus 180.53 T: 18.07 PP 7B I YTD: 4,830 B Current: 50 B1: 150 A: 18,090.00 K1 + K2 + K4: 1,945.54 T1: 767.96 K1P + K2P: 1,833.53 T2: 0.00 M1: minus 23.30 (T1 + T2 minus M1) divided by S1: see* M: minus 198.60 TB: 6.99 PP 8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 + K2 + K4: 1,945.21 T1: 763.42 K1P + K2P: 1,833.31 T2: 0.00 M1: minus 30.29 (T1 + T2 minus M1) divided by S1: 225.58 M: minus 198.60 T: 26.98 PP 9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 + K2 + K4: 1,944.95 T1: 759.88 K1P + K2P: 1,833.13 T2: 0.00 M1: minus 30.29 (T1 + T2 minus M1) divided by S1: 252.55 M: minus 225.58 T: 26.97 PP 10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 + K2 + K4: 1,944.74 T1: 757.06 K1P + K2P: 1,832.99 T2: 0.00 M1: minus 30.29 (T1 + T2 minus M1) divided by S1: 279.53 M: minus 252.55 T: 26.98 PP 11 Salary: 680 I YTD: 7,550 B: 150 A: 17,995.45 K1 + K2 + K4: 1,944.58 T1: 754.74 K1P + K2P: 1,832.88 T2: 0.00 M1: minus 30.29 (T1 + T2 minus M1) divided by S1: 306.50 M: minus 279.53 T: 26.97 PP 12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 + K2 + K4: 1,940.14 T1: 693.74 K1P + K2P: 1,829.92 T2: 0.00 M1: minus 30.29 (T1 + T2 minus M1) divided by S1: 306.21 M: minus 306.50 T: 0.00 PP 13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 + K2 + K4: 1,940.35 T1: 696.65 K1P + K2P: 1,830.07 T2: 0.00 M1: minus 30.29 (T1 + T2 minus M1) divided by S1: 333.18 M: minus 306.50 T: 26.68 PP 14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 + K2 + K4: 1,941.66 T1: 714.73 K1P + K2P: 1,830.95 T2: 0.00 M1: minus 30.29 (T1 + T2 minus M1) divided by S1: 368.54 M: minus 333.18 T: 35.56 PP 14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1 + K2 + K4: 1,946.75 T1: 784.64 K1P + K2P: 1,834.33 T2: 0.00 M1: minus 30.29 (T1 + T2 minus M1) divided by S1: see* M: minus 368.54 TB: 69.91 PP 15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 + K2 + K4: 1,946.84 T1: 785.76 K1P + K2P: 1,834.39 T2: 0.00 M1: minus 100.20 (T1 + T2 minus M1) divided by S1: 395.52 M: minus 368.54 T: 26.98 PP 16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 + K2 + K4: 1,946.91 T1: 786.75 K1P + K2P: 1,834.44 T2: 0.00 M1: minus 100.20 (T1 + T2 minus M1) divided by S1: 422.49 M: minus 395.52 T: 26.97 PP 17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 + K2 + K4: 1,946.96 T1: 787.63 K1P + K2P: 1,834.48 T2: 0.00 M1: minus 100.20 (T1 + T2 minus M1) divided by S1: 449.47 M: minus 422.49 T: 26.98 PP 18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 + K2 + K4: 1,947.03 T1: 788.39 K1P + K2P: 1,834.51 T2: 0.00 M1: minus 100.20 (T1 + T2 minus M1) divided by S1: 476.44 M: minus 449.47 T: 26.97 PP 19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 + K2 + K4: 1,947.07 T1: 789.09 K1P + K2P: 1,834.55 T2: 0.00 M1: minus 100.20 (T1 + T2 minus M1) divided by S1: 503.42 M: minus 476.44 T: 26.98 PP 20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 + K2 + K4: 1,947.12 T1: 789.71 K1P + K2P: 1,834.58 T2: 0.00 M1: minus 100.20 (T1 + T2 minus M1) divided by S1: 530.39 M: minus 503.42 T: 26.97 PP 21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 + K2 + K4: 1,947.17 T1: 790.26 K1P + K2P: 1,834.61 T2: 0.00 M1: minus 100.20 (T1 + T2 minus M1) divided by S1: 557.36 M: minus 530.39 T: 26.97 PP 22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 + K2 + K4: 1,947.19 T1: 790.79 K1P + K2P: 1,834.63 T2: 0.00 M1: minus 100.20 (T1 + T2 minus M1) divided by S1: 584.35 M: minus 557.36 T: 26.99 PP 23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 + K2 + K4: 1,947.23 T1: 791.25 K1P + K2P: 1,834.66 T2: 0.00 M1: minus 100.20 (T1 + T2 minus M1) divided by S1: 611.31 M: minus 584.35 T: 26.96 PP 24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 + K2 + K4: 1,947.26 T1: 791.68 K1P + K2P: 1,834.68 T2: 0.00 M1: minus 100.20 (T1 + T2 minus M1) divided by S1: 638.29 M: minus 611.31 T: 26.98 PP 25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 + K2 + K4: 1,947.29 T1: 792.07 K1P + K2P: 1,834.69 T2: 0.00 M1: minus 100.20 (T1 + T2 minus M1) divided by S1: 665.26 M: minus 638.29 T: 26.97 PP 26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 + K2 + K4: 1,947.32 T1: 792.43 K1P + K2P: 1,834.72 T2: 0.00 M1: minus 100.20 (T1 + T2 minus M1) divided by S1: 692.23 M: minus 665.26 T: 26.97 Total tax deducted for the year on regular salary $692.23 Total tax deducted for the year on non-periodic payments 100.20 Total tax deducted for the year on salary and non-periodic payments $792.43 * Note Tax on the non-periodic payment is T1 + T2 amounts determined at line 4B, less T1 + T2 amounts determined at line 4. For other similar payments, such as lump-sum payments, the same principle will apply. The non-periodic payment tax calculation for pay period 14 has been used to determine the steps to follow. For more details, see the example that begins on page 62. YTD = year-to-date PAGE 67 Option 2 - Examples when calculating the tax deductions on salary and non- periodic payments separately (continued) British Columbia PP: 1 Salary: 740 I YTD: 740 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 631.75 T2: 0.00 (T1 + T2 minus M1) divided by S1: 35.72 T: 35.72 PP: 2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 631.75 T2: 00.0 (T1 + T2 minus M1) divided by S1: 71.44 M: minus 35.72 T: 35.72 PP: 3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 631.75 T2: 0.00 (T1 + T2 minus M1) divided by S1: 107.17 M: minus 71.44 T: 35.73 PP: 4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 631.75 T2: 0.00 (T1 + T2 minus M1) divided by S1: 142.89 M: minus 107.17 T: 35.72 PP: 4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1 + K2 + K4: 1,958.25 T1: 942.75 K1P + K2P: 632.09 T2: 0.00 (T1 + T2 minus M1) divided by S1: see* M: minus 142.89 TB: 13.98 PP: 5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 + K2 + K4: 1,955.08 T1: 899.12 K1P + K2P: 631.02 T2: 0.00 M1: minus 13.98 (T1 + T2 minus M1) divided by S1: 170.22 M: minus 142.89 T: 27.33 PP: 6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 + K2 + K4: 1,945.47 T1:767.03 K1P + K2P: 627.78 T2: 0.00 M1: minus 13.98 (T1 + T2 minus M1) divided by S1: 173.78 M: minus 170.22 T: 3.56 PP: 7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 + K2 + K4: 1,945.03 T1: 760.97 K1P + K2P: 627.63 T2: 0.00 M1: minus 13.98 (T1 + T2 minus M1) divided by S1: 201.11 M: minus 173.78 T: 27.33 PP: 7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1 + K2 + K4: 1,945.54 T1: 767.96 K1P + K2P: 627.80 T2: 0.00 M1: minus 13.98 (T1 + T2 minus M1) divided by S1: see* M: minus 201.11 TB: 6.99 PP: 8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 + K2 + K4: 1,945.21 T1: 763.42 K1P + K2P: 627.69 T2: 0.00 M1: minus 20.97 (T1 + T2 minus M1) divided by S1: 228.45 M: minus 201.11 T: 27.34 PP: 9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 + K2 + K4: 1,944.95 T1: 759.88 K1P + K2P: 627.61 T2: 0.00 M1: minus 20.97 (T1 + T2 minus M1) divided by S1: 255.78 M: minus 228.45 T: 27.33 PP: 10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 + K2 + K4: 1,944.74 T1: 757.06 K1P + K2P: 627.54 T2: 0.00 M1: minus 20.97 (T1 + T2 minus M1) divided by S1: 283.11 M: minus 255.78 T: 27.33 PP: 11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1 + K2 + K4: 1,944.58 T1: 754.74 K1P + K2P: 627.48 T2: 0.00 M1: minus 20.97 (T1 + T2 minus M1) divided by S1: 310.44 M: minus 283.11 T: 27.33 PP: 12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 + K2 + K4: 1,940.14 T1: 693.74 K1P + K2P: 625.98 T2: 0.00 M1: minus 20.97 (T1 + T2 minus M1) divided by S1: 310.51 M: minus 310.44 T: 0.07 PP: 13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 + K2 + K4: 1,940.35 T1: 696.65 K1P + K2P: 626.06 T2: 0.00 M1: minus 20.97 (T1 + T2 minus M1) divided by S1: 337.84 M: minus 310.51 T: 27.33 PP: 14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 + K2 + K4: 1,941.66 T1: 714.73 K1P + K2P: 626.50 T2: 0.00 M1: minus 20.97 (T1 + T2 minus M1) divided by S1: 373.56 M: minus 337.84 T: 35.72 PP: 14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1 + K2 + K4: 1,946.75 T1: 784.64 K1P + K2P: 628.21 T2: 0.00 M1: minus 20.97 (T1 + T2 minus M1) divided by S1: see* M: minus 373.56 TB: 69.91 PP: 15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 + K2 + K4: 1,946.84 T1: 785.76 K1P + K2P: 628.24 T2: 0.00 M1: minus 90.88 (T1 + T2 minus M1) divided by S1: 400.89 M: minus 373.56 T: 27.33 PP: 16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 + K2 + K4: 1,946.91 T1: 786.75 K1P + K2P: 628.27 T2: 0.00 M1: minus 90.88 (T1 + T2 minus M1) divided by S1: 428.23 M: minus 400.89 T: 27.34 PP: 17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 + K2 + K4: 1,946.96 T1: 787.63 K1P + K2P: 628.29 T2: 0.00 M1: minus 90.88 (T1 + T2 minus M1) divided by S1: 455.57 M: minus 428.23 T: 27.34 PP: 18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 + K2 + K4: 1,947.03 T1: 788.39 K1P + K2P: 628.31 T2: 0.00 M1: minus 90.88 (T1 + T2 minus M1) divided by S1: 482.89 M: minus 455.57 T: 27.32 PP: 19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 + K2 + K4: 1,947.07 T1: 789.09 K1P + K2P: 628.32 T2: 0.00 M1: minus 90.88 (T1 + T2 minus M1) divided by S1: 510.23 M: minus 482.89 T: 27.34 PP: 20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 + K2 + K4: 1,947.12 T1: 789.71 K1P + K2P: 628.33 T2: 0.00 M1: minus 90.88 (T1 + T2 minus M1) divided by S1: 537.56 M: minus 510.23 T: 27.33 PP: 21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 + K2 + K4: 1,947.17 T1: 790.26 K1P + K2P: 628.35 T2: 0.00 M1: minus 90.88 (T1 + T2 minus M1) divided by S1: 564.88 M: minus 537.56 T: 27.32 PP: 22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 + K2 + K4: 1,947.19 T1: 790.79 K1P + K2P: 628.36 T2: 0.00 M1: minus 90.88 (T1 + T2 minus M1) divided by S1: 592.23 M: minus 564.88 T: 27.35 PP: 23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 + K2 + K4: 1,947.23 T1: 791.25 K1P + K2P: 628.37 T2: 0.00 M1: minus 90.88 (T1 + T2 minus M1) divided by S1: 619.56 M: minus 592.23 T: 27.33 PP: 24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 + K2 + K4: 1,947.26 T1: 791.68 K1P + K2P: 628.39 T2: 0.00 M1: minus 90.88 (T1 + T2 minus M1) divided by S1: 646.89 M: minus 619.56 T: 27.33 PP: 25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 + K2 + K4: 1,947.29 T1: 792.07 K1P + K2P: 628.40 T2: 0.00 M1: minus 90.88 (T1 + T2 minus M1) divided by S1: 674.22 M: minus 646.89 T: 27.33 PP: 26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 + K2 + K4: 1,947.32 T1: 792.43 K1P + K2P: 628.40 T2: 0.00 M1: minus 90.88 (T1 + T2 minus M1) divided by S1: 701.55 M: minus 674.22 T: 27.33 Total tax deducted for the year on regular salary $701.55 Total tax deducted for the year on non-periodic payments 90.88 Total tax deducted for the year on salary and non-periodic payments $792.43 * Note Tax on the non-periodic payment is T1 + T2 amounts determined at line 4B, less T1 + T2 amounts determined at line 4. For other similar payments, such as lump-sum payments, the same principle will apply. The non-periodic payment tax calculation for pay period 14 has been used to determine the steps to follow. For more details, see the example that begins on page 62. YTD = year-to-date PAGE 68 Option 2 - Examples when calculating the tax deductions on salary and non- periodic payments separately (continued) Manitoba PP: 1 Salary: 740 I YTD: 740 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P+ K2P: 1,054.65 T2: 1,023.27 (T1 + T2 minus M1) divided by S1: 75.08 T: 75.08 PP: 2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P+ K2P: 1,054.65 T2: 1,023.27 (T1 + T2 minus M1) divided by S1: 150.16 M: minus 75.08 T: 75.08 PP: 3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P+ K2P: 1,054.65 T2: 1,023.27 (T1 + T2 minus M1) divided by S1: 225.24 M: minus 150.16 T: 75.08 PP: 4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P+ K2P: 1,054.65 T2: 1,023.27 (T1 + T2 minus M1) divided by S1: 300.31 M: minus 225.24 T: 75.07 PP: 4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1 + K2 + K4: 1,958.25 T1: 942.75 K1P+ K2P: 1,055.37 T2: 1,033.35 (T1 + T2 minus M1) divided by S1: see* M: minus 300.31 TB: 24.06 PP: 5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 + K2 + K4: 1,955.08 T1: 899.12 K1P+ K2P: 1,053.09 T2: 1,001.93 M1: minus 24.06 (T1 + T2 minus M1) divided by S1: 360.96 M: minus 300.31 T: 60.65 PP: 6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 + K2 + K4: 1,945.47 T1: 767.03 K1P+ K2P: 1,046.17 T2: 906.83 M1: minus 24.06 (T1 + T2 minus M1) divided by S1: 380.72 M: minus 360.96 T: 19.76 PP: 7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 + K2 + K4: 1,945.03 T1: 760.97 K1P+ K2P: 1,045.85 T2: 902.47 M1: minus 24.06 (T1 + T2 minus M1) divided by S1: 441.37 M: minus 380.72 T: 60.65 PP: 7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1 + K2 + K4: 1,945.54 T1: 767.96 K1P+ K2P: 1,046.22 T2: 907.50 M1: minus 24.06 (T1 + T2 minus M1) divided by S1: see* M: minus 441.37 TB: 12.02 PP: 8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 + K2 + K4: 1,945.21 T1: 763.42 K1P+ K2P: 1,045.98 T2: 904.23 M1: minus 36.08 (T1 + T2 minus M1) divided by S1: 502.02 M: minus 441.37 T: 60.65 PP: 9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 + K2 + K4: 1,944.95 T1: 759.88 K1P+ K2P: 1,045.80 T2: 901.68 M1: minus 36.08 (T1 + T2 minus M1) divided by S1: 562.67 M: minus 502.02 T: 60.65 PP: 10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 + K2 + K4: 1,944.74 T1: 757.06 K1P+ K2P: 1,045.65 T2: 899.65 M1: minus 36.08 (T1 + T2 minus M1) divided by S1: 623.32 M: minus 562.67 T: 60.65 PP: 11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1 + K2 + K4: 1,944.58 T1: 754.74 K1P+ K2P: 1,045.53 T2: 897.98 M1: minus 36.08 (T1 + T2 minus M1) divided by S1: 683.96 M: minus 623.32 T: 60.64 PP: 12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 + K2 + K4: 1,940.14 T1: 693.74 K1P+ K2P: 1,042.33 T2: 854.06 M1: minus 36.08 (T1 + T2 minus M1) divided by S1: 697.72 M: minus 683.96 T: 13.76 PP: 13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 + K2 + K4: 1,940.35 T1: 696.65 K1P+ K2P: 1,042.48 T2: 856.16 M1: minus 36.08 (T1 + T2 minus M1) divided by S1: 758.37 M: minus 697.72 T: 60.65 PP: 14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 + K2 + K4: 1,941.66 T1: 714.73 K1P+ K2P: 1,043.43 T2: 869.17 M1: minus 36.08 (T1 + T2 minus M1) divided by S1: 833.44 M: minus 758.37 T: 75.07 PP: 14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1 + K2 + K4: 1,946.75 T1: 784.64 K1P+ K2P: 1,047.10 T2: 919.50 M1: minus 36.08 (T1 + T2 minus M1) divided by S1: see* M: minus 833.44 TB: 120.24 PP: 15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 + K2 + K4: 1,946.84 T1: 785.76 K1P+ K2P: 1,047.16 T2: 920.31 M1: minus 156.32 (T1 + T2 minus M1) divided by S1: 894.09 M: minus 833.44 T: 60.65 PP: 16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 + K2 + K4: 1,946.91 T1: 786.75 K1P+ K2P: 1,047.21 T2: 921.02 M1: minus 156.32 (T1 + T2 minus M1) divided by S1: 954.74 M: minus 894.09 T: 60.65 PP: 17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 + K2 + K4: 1,946.96 T1: 787.63 K1P+ K2P: 1,047.25 T2: 921.65 M1: minus 156.32 (T1 + T2 minus M1) divided by S1: 1,015.40 M: minus 954.74 T: 60.66 PP: 18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 + K2 + K4: 1,947.03 T1: 788.39 K1P+ K2P: 1,047.29 T2: 922.21 M1: minus 156.32 (T1 + T2 minus M1) divided by S1: 1,076.04 M: minus 1,015.40 T: 60.64 PP: 19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 + K2 + K4: 1,947.07 T1: 789.09 K1P+ K2P: 1,047.33 T2: 922.70 M1: minus 156.32 (T1 + T2 minus M1) divided by S1: 1,136.69 M: minus 1,076.04 T: 60.65 PP: 20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 + K2 + K4: 1,947.12 T1: 789.71 K1P+ K2P: 1,047.36 T2: 923.15 M1: minus 156.32 (T1 + T2 minus M1) divided by S1: 1,197.34 M: minus 1,136.69 T: 60.65 PP: 21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 + K2 + K4: 1,947.17 T1: 790.26 K1P+ K2P: 1,047.39 T2: 923.56 M1: minus 156.32 (T1 + T2 minus M1) divided by S1: 1,257.98 M: minus 1,197.34 T: 60.64 PP: 22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 + K2 + K4: 1,947.19 T1: 790.79 K1P+ K2P: 1,047.42 T2: 923.92 M1: minus 156.32 (T1 + T2 minus M1) divided by S1: 1,318.64 M: minus 1,257.98 T: 60.66 PP: 23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 + K2 + K4: 1,947.23 T1: 791.25 K1P+ K2P: 1,047.44 T2: 924.26 M1: minus 156.32 (T1 + T2 minus M1) divided by S1: 1,379.28 M: minus 1,318.64 T: 60.64 PP: 24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 + K2 + K4: 1,947.26 T1: 791.68 K1P+ K2P: 1,047.46 T2: 924.57 M1: minus 156.32 (T1 + T2 minus M1) divided by S1: 1,439.94 M: minus 1,379.28 T: 60.66 PP: 25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 + K2 + K4: 1,947.29 T1: 792.07 K1P+ K2P: 1,047.48 T2: 924.86 M1: minus 156.32 (T1 + T2 minus M1) divided by S1: 1,500.59 M: minus 1,439.94 T: 60.65 PP: 26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 + K2 + K4: 1,947.32 T1: 792.43 K1P+ K2P: 1,047.50 T2: 925.12 M1: minus 156.32 (T1 + T2 minus M1) divided by S1: 1,561.23 M: minus 1,500.59 T: 60.64 Total tax deducted for the year on regular salary $1,561.23 Total tax deducted for the year on non-periodic payments 156.32 Total tax deducted for the year on salary and non-periodic payments $1,717.55 * Note Tax on the non-periodic payment is T1 + T2 amounts determined at line 4B, less T1 + T2 amounts determined at line 4. For other similar payments, such as lump-sum payments, the same principle will apply. The non-periodic payment tax calculation for pay period 14 has been used to determine the steps to follow. For more details, see the example that begins on page 62. YTD = year-to-date PAGE 69 Option 2 - Examples when calculating the tax deductions on salary and non- periodic payments separately (continued) New Brunswick PP:1 Salary: 740 I YTD: 740 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 940.41 T2: 810.43 (T1 + T2 minus M1) divided by S1: 66.89 T: 66.89 PP:2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 940.41 T2: 810.43 (T1 + T2 minus M1) divided by S1: 133.78 M: minus 66.89 T: 66.89 PP:3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 940.41 T2: 810.43 (T1 + T2 minus M1) divided by S1: 200.68 M: minus 133.78 T: 66.90 PP:4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 940.41 T2: 810.43 (T1 + T2 minus M1) divided by S1: 267.57 M: minus 200.68 T: 66.89 PP:4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1 + K2 + K4: 1,958.25 T1: 942.75 K1P + K2P: 941.03 T2: 818.91 (T1 + T2 minus M1) divided by S1: see* M: minus 267.57 TB: 22.46 PP:5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 + K2 + K4: 1,955.08 T1: 899.12 K1P + K2P: 939.11 T2: 792.44 M1: minus 22.46 (T1 + T2 minus M1) divided by S1: 320.98 M: minus 267.57 T: 53.41 PP:6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 + K2 + K4: 1,945.47 T1: 767.03 K1P + K2P: 933.27 T2: 712.31 M1: minus 22.46 (T1 + T2 minus M1) divided by S1: 336.20 M: minus 320.98 T: 15.22 PP:7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 + K2 + K4: 1,945.03 T1: 760.97 K1P + K2P: 933.01 T2: 708.63 M1: minus 22.46 (T1 + T2 minus M1) divided by S1: 389.61 M: minus 336.20 T: 53.41 PP:7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1 + K2 + K4: 1,945.54 T1: 767.96 K1P + K2P: 933.32 T2: 712.87 M1: minus 22.46 (T1 + T2 minus M1) divided by S1: see* M: minus 389.61 TB: 11.23 PP:8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 + K2 + K4: 1,945.21 T1: 763.42 K1P + K2P: 933.11 T2: 710.12 M1: minus 33.69 (T1 + T2 minus M1) divided by S1: 443.03 M: minus 389.61 T: 53.42 PP:9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 + K2 + K4: 1,944.95 T1: 759.88 K1P + K2P: 932.96 T2: 707.97 M1: minus 33.69 (T1 + T2 minus M1) divided by S1: 496.44 M: minus 443.03 T: 53.41 PP:10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 + K2 + K4: 1,944.74 T1: 757.06 K1P + K2P: 932.84 T2: 706.25 M1: minus 33.69 (T1 + T2 minus M1) divided by S1: 549.85 M: minus 496.44 T: 53.41 PP:11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1 + K2 + K4: 1,944.58 T1: 754.74 K1P + K2P: 932.73 T2: 704.86 M1: minus 33.69 (T1 + T2 minus M1) divided by S1: 603.27 M: minus 549.85 T: 53.42 PP:12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 + K2 + K4: 1,940.14 T1: 693.74 K1P + K2P: 930.04 T2: 667.84 M1: minus 33.69 (T1 + T2 minus M1) divided by S1: 612.87 M: minus 603.27 T: 9.60 PP:13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 + K2 + K4: 1,940.35 T1: 696.65 K1P + K2P: 930.17 T2: 669.61 M1: minus 33.69 (T1 + T2 minus M1) divided by S1: 666.29 M: minus 612.87 T: 53.42 PP:14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 + K2 + K4: 1,941.66 T1: 714.73 K1P + K2P: 930.97 T2: 680.58 M1: minus 33.69 (T1 + T2 minus M1) divided by S1: 733.18 M: minus 666.29 T: 66.89 PP:14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1 + K2 + K4: 1,946.75 T1: 784.64 K1P + K2P: 934.05 T2: 723.00 M1: minus 33.69 (T1 + T2 minus M1) divided by S1: see* M: minus 733.18 TB 112.33 PP:15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 + K2 + K4: 1,946.84 T1: 785.76 K1P + K2P: 934.10 T2: 723.68 M1: minus 146.02 (T1 + T2 minus M1) divided by S1: 786.59 M: minus 733.18 T: 53.41 PP:16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 + K2 + K4: 1,946.91 T1: 786.75 K1P + K2P: 934.15 T2: 724.27 M1: minus 146.02 (T1 + T2 minus M1) divided by S1: 840.00 M: minus 786.59 T: 53.41 PP:17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 + K2 + K4: 1,946.96 T1: 787.63 K1P + K2P: 934.18 T2: 724.80 M1: minus 146.02 (T1 + T2 minus M1) divided by S1: 893.42 M: minus 840.00 T: 53.42 PP:18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 + K2 + K4: 1,947.03 T1: 788.39 K1P + K2P: 934.22 T2: 725.27 M1: minus 146.02 (T1 + T2 minus M1) divided by S1: 946.83 M: minus 893.42 T: 53.41 PP:19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 + K2 + K4: 1,947.07 T1: 789.09 K1P + K2P: 934.25 T2: 725.69 M1: minus 146.02 (T1 + T2 minus M1) divided by S1: 1,000.25 M: minus 946.83 T: 53.42 PP:20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 + K2 + K4: 1,947.12 T1: 789.71 K1P + K2P: 934.27 T2: 726.07 M1: minus 146.02 (T1 + T2 minus M1) divided by S1: 1,053.66 M: minus 1,000.25 T: 53.41 PP:21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 + K2 + K4: 1,947.17 T1: 790.26 K1P + K2P: 934.30 T2: 726.41 M1: minus 146.02 (T1 + T2 minus M1) divided by S1: 1,107.06 M: minus 1,053.66 T: 53.40 PP:22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 + K2 + K4: 1,947.19 T1: 790.79 K1P + K2P: 934.33 T2: 726.71 M1: minus 146.02 (T1 + T2 minus M1) divided by S1: 1,160.48 M: minus 1,107.06 T: 53.42 PP:23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 + K2 + K4: 1,947.23 T1: 791.25 K1P + K2P: 934.34 T2: 727.00 M1: minus 146.02 (T1 + T2 minus M1) divided by S1: 1,213.90 M: minus 1,160.48 T: 53.42 PP:24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 + K2 + K4: 1,947.26 T1: 791.68 K1P + K2P: 934.36 T2: 727.26 M1: minus 146.02 (T1 + T2 minus M1) divided by S1: 1,267.31 M: minus 1,213.90 T: 53.41 PP:25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 + K2 + K4: 1,947.29 T1: 792.07 K1P + K2P: 934.38 T2: 727.50 M1: minus 146.02 (T1 + T2 minus M1) divided by S1: 1,320.72 M: minus 1,267.31 T: 53.41 PP:26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 + K2 + K4: 1,947.32 T1: 792.43 K1P + K2P: 934.40 T2: 727.72 M1: minus 146.02 (T1 + T2 minus M1) divided by S1: 1,374.13 M: minus 1,320.72 T: 53.41 Total tax deducted for the year on regular salary $1,374.13 Total tax deducted for the year on non-periodic payments 146.02 Total tax deducted for the year on salary and non-periodic payments $1,520.15 * Note Tax on the non-periodic payment is T1 + T2 amounts determined at line 4B, less T1 + T2 amounts determined at line 4. For other similar payments, such as lump-sum payments, the same principle will apply. The non-periodic payment tax calculation for pay period 14 has been used to determine the steps to follow. For more details, see the example that begins on page 62. YTD = year-to-date PAGE 70 Option 2 minus Examples when calculating the tax deductions on salary and non-periodic payments separately (continued) Newfoundland and Labrador PP:1 Salary: 740 I YTD: 740 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 721.35 T2: 760.13 (T1 + T2 minus M1) divided by S1: 64.96 T: 64.96 PP:2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 721.35 T2: 760.13 (T1 + T2 minus M1) divided by S1: 129.92 M: minus 64.96 T: 64.96 PP:3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 721.35 T2: 760.13 (T1 + T2 minus M1) divided by S1: 194.87 M: minus 129.92 T: 64.95 PP:4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 721.35 T2: 760.13 (T1 + T2 minus M1) divided by S1: 259.83 M: minus 194.87 T: 64.96 PP:4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1 + K2 + K4: 1,958.25 T1: 942.75 K1P + K2P: 721.87 T2: 767.31 (T1 + T2 - M1) divided by S1: see* M: minus 259.83 TB: 21.16 PP:5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 + K2 + K4: 1,955.08 T1: 899.12 K1P + K2P: 720.25 T2: 744.91 M1: minus 21.16 (T1 + T2 minus M1) divided by S1: 312.09 M: minus 259.83 T: 52.26 PP:6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 + K2 + K4: 1,945.47 T1: 767.03 K1P + K2P: 715.31 T2: 677.11 M1: minus 21.16 (T1 + T2 minus M1) divided by S1: 328.38 M: minus 312.19 T: 16.29 PP:7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 + K2 + K4: 1,945.03 T1: 760.97 K1P + K2P: 715.09 T2: 673.99 M1: minus 21.16 (T1 + T2 minus M1) divided by S1: 380.64 M: minus 328.38 T: 52.26 PP:7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1 + K2 + K4: 1,945.54 T1: 767.96 K1P + K2P: 715.35 T2: 677.58 M1: minus 21.16 (T1 + T2 minus M1) divided by S1: see* M: minus 380.64 TB: 10.58 PP:8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 + K2 + K4: 1,945.21 T1: 763.42 K1P + K2P: 715.18 T2: 675.25 M1: minus 31.74 (T1 + T2 minus M1) divided by S1: 432.90 M: minus 380.64 T: 56.26 PP:9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 + K2 + K4: 1,944.95 T1: 759.88 K1P + K2P: 715.05 T2: 673.43 M1: minus 31.74 (T1 + T2 minus M1) divided by S1: 485.16 M: minus 432.90 T: 52.26 PP:10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 + K2 + K4: 1,944.74 T1: 757.06 K1P + K2P: 714.94 T2: 671.98 M1: minus 31.74 (T1 + T2 minus M1) divided by S1: 537.42 M: minus 485.16 T: 52.26 PP:11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1 + K2 + K4: 1,944.58 T1: 754.74 K1P + K2P: 714.86 T2: 670.79 M1: minus 31.74 (T1 + T2 minus M1) divided by S1: 589.68 M: minus 537.42 T: 52.26 PP:12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 + K2 + K4: 1,940.14 T1: 693.74 K1P + K2P: 712.58 T2: 639.48 M1: minus 31.74 (T1 + T2 minus M1) divided by S1: 600.68 M: minus 589.68 T: 11.00 PP:13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 + K2 + K4: 1,940.35 T1: 696.65 K1P + K2P: 712.69 T2: 640.97 M1: minus 31.74 (T1 + T2 minus M1) divided by S1: 652.94 M: minus 600.68 T: 52.26 PP:14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 + K2 + K4: 1,941.66 T1: 714.73 K1P + K2P: 713.36 T2: 650.26 M1: minus 31.74 (T1 + T2 minus M1) divided by S1: 717.90 M: minus 652.94 T: 64.96 PP:14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1 + K2 + K4: 1,946.75 T1: 784.64 K1P + K2P: 784.64 T2: 686.15 M1: minus 31.74 (T1 + T2 minus M1) divided by S1: see* M: minus 717.90 TB: 105.80 PP:15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 + K2 + K4: 1,946.84 T1: 785.76 K1P + K2P: 716.02 T2: 686.71 M1: minus: 137.54 (T1 + T2 minus M1) divided by S1: 770.15 M: minus 717.90 T: 52.25 PP:16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 + K2 + K4: 1,946.91 T1: 786.75 K1P + K2P: 716.05 T2: 687.23 M1: minus 137.54 (T1 + T2 minus M1) divided by S1: 822.42 M: minus 770.15 T: 52.27 PP:17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 + K2 + K4: 1,946.96 T1: 787.63 K1P + K2P: 716.09 T2: 687.67 M1: minus 137.54 (T1 + T2 minus M1) divided by S1: 874.69 M: minus 822.42 T: 52.27 PP:18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 + K2 + K4: 1,947.03 T1: 788.39 K1P + K2P: 716.12 T2: 688.06 M1: minus 137.54 (T1 + T2 minus M1) divided by S1: 926.94 M: minus 874.69 T: 52.25 PP:19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 + K2 + K4: 1,947.07 T1: 789.09 K1P + K2P: 716.14 T2: 688.42 M1: minus 137.54 (T1 + T2 minus M1) divided by S1: 979.21 M: minus 926.94 T: 52.27 PP:20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 + K2 + K4: 1,947.12 T1: 789.71 K1P + K2P: 716.16 T2: 688.74 M1: minus 137.54 (T1 + T2 minus M1) divided by S1: 1,031.47 M: minus 979.21 T: 52.26 PP:21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 + K2 + K4: 1,947.17 T1: 790.26 K1P + K2P: 716.19 T2: 689.02 M1: minus 137.54 (T1 + T2 minus M1) divided by S1: 1,083.71 M: minus 1,1031.47 T: 52.24 PP:22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 + K2 + K4: 1,947.19 T1: 790.79 K1P + K2P: 716.20 T2: 689.29 M1: minus 137.54 (T1 + T2 minus M1) divided by S1: 1,136.00 M: minus 1,083.71 T: 52.29 PP:23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 + K2 + K4: 1,947.23 T1: 791.25 K1P + K2P: 716.21 T2: 689.54 M1: minus 137.54 (T1 + T2 minus M1) divided by S1: 1,188.26 M: minus 1,136.00 T: 52.26 PP:24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 + K2 + K4: 1,947.26 T1: 791.68 K1P + K2P: 716.24 T2: 689.75 M1: minus 137.54 (T1 + T2 minus M1) divided by S1: 1,240.51 M: minus 1,188.26 T: 52.25 PP:25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 + K2 + K4: 1,947.29 T1: 792.07 K1P + K2P: 716.25 T2: 689.95 M1: minus 137.54 (T1 + T2 minus M1) divided by S1: 1,292.77 M: minus 1,240.51 T: 52.26 PP:26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 + K2 + K4: 1,947.32 T1: 792.43 K1P + K2P: 716.27 T2: 690.14 M1: minus 137.54 (T1 + T2 minus M1) divided by S1: 1,345.03 M: minus 1,292.77 T: 52.26 Total tax deducted for the year on regular salary $1,345.03 Total tax deducted for the year on non-periodic payments 137.54 Total tax deducted for the year on salary and non-periodic payments $1,482.57 * Note Tax on the non-periodic payment is T1 + T2 amounts determined at line 4B, less T1 + T2 amounts determined at line 4. For other similar payments, such as lump-sum payments, the same principle will apply. The non-periodic payment tax calculation for pay period 14 has been used to determine the steps to follow. For more details, see the example that begins on page 62. YTD = year-to-date PAGE 71 Option 2 - Examples when calculating the tax deductions on salary and non- periodic payments separately (continued) Northwest Territories PP:1 Salary: 740 I YTD: 740 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 850.26 T2: 284.90 (T1 + T2 minus M1) divided by S1: 46.68 T: 46.68 PP:2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 850.26 T2: 284.90 (T1 + T2 minus M1) divided by S1: 93.36 M: minus 46.68 T: 46.68 PP:3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 850.26 T2: 284.90 (T1 + T2 minus M1) divided by S1: 140.04 M: minus 93.36 T: 46.68 PP:4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 850.26 T2: 284.90 (T1 + T2 minus M1) divided by S1: 186.72 M: minus 140.04 T: 46.68 PP:4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1 + K2 + K4: 1,958.25 T1: 942.75 K1P + K2P: 850.66 T2: 290.40 (T1 + T2 minus M1) divided by S1: see* M: minus 166.72 TB: 19.48 PP:5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 + K2 + K4: 1,955.08 T1: 899.12 K1P + K2P: 849.4 T2: 273.24 M1: minus 19.48 (T1 + T2 minus M1) divided by S1: 221.71 M: minus 186.72 T: 34.99 PP:6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 + K2 + K4: 1,945.47 T1: 767.03 K1P + K2P: 845.63 T2: 221.29 M1: minus 19.48 (T1 + T2 minus M1) divided by S1: 223.58 M: minus 221.71 T: 1.87 PP:7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 + K2 + K4: 1,945.03 T1: 760.97 K1P + K2P: 845.46 T2: 218.90 M1: minus 19.48 (T1 + T2 minus M1) divided by S1: 258.57 M: minus 223.58 T: 34.99 PP:7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1 + K2 + K4: 1,945.54 T1: 767.96 K1P + K2P: 845.66 T2: 221.65 M1: minus 19.48 (T1 + T2 minus M1) divided by S1: see* M: minus 258.57 TB: 9.74 PP:8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 + K2 + K4: 1,945.21 T1: 763.42 K1P + K2P: 845.54 T2: 219.85 M1: minus 29.22 (T1 + T2 minus M1) divided by S1: 293.55 M: minus 258.57 T: 34.98 PP:9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 + K2 + K4: 1,944.95 T1: 759.88 K1P + K2P: 845.43 T2: 218.47 M1: minus 29.22 (T1 + T2 minus M1) divided by S1: 328.55 M: minus 293.55 T: 35.00 PP:10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 + K2 + K4: 1,944.74 T1: 757.06 K1P + K2P: 845.35 T2: 217.36 M1: minus 29.22 (T1 + T2 minus M1) divided by S1: 363.54 M: minus 328.55 T: 34.99 PP:11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1 + K2 + K4: 1,944.58 T1: 754.74 K1P + K2P: 845.28 T2: 216.45 M1: minus 29.22 (T1 + T2 minus M1) divided by S1: 398.53 M: minus 363.54 T: 34.99 PP:12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 + K2 + K4: 1,940.14 T1: 693.74 K1P + K2P: 843.54 T2: 192.45 M1: minus 29.22 (T1 + T2 minus M1) divided by S1: 395.52 M: minus 398.53 T: 0.00 PP:13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 + K2 + K4: 1,940.35 T1: 696.65 K1P + K2P: 843.62 T2: 193.60 M1: minus 29.22 (T1 + T2 minus M1) divided by S1: 430.52 M: minus 398.53 T: 31.99 PP:14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 + K2 + K4: 1,941.66 T1: 714.73 K1P + K2P: 844.14 T2: 200.71 M1: minus 29.22 (T1 + T2 minus M1) divided by S1: 477.20 M: minus 430.52 T: 46.68 PP:14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1 + K2 + K4: 1,946.75 T1: 784.64 K1P + K2P: 846.14 T2: 228.21 M1: minus 29.22 (T1 + T2 minus M1) divided by S1: see* M: minus 477.20 TM: 97.41 PP:15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 + K2 + K4: 1,946.84 T1: 785.76 K1P + K2P: 846.17 T2: 228.65 M1: minus 126.63 (T1 + T2 minus M1) divided by S1: 512.18 M: minus 477.20 T: 34.98 PP:16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 + K2 + K4: 1,946.91 T1: 786.75 K1P + K2P: 846.20 T2: 229.04 M1: minus 126.63 (T1 + T2 minus M1) divided by S1: 547.18 M: minus 512.18 T: 35.00 PP:17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 + K2 + K4: 1,946.96 T1: 787.63 K1P + K2P: 846.22 T2: 229.38 M1: minus 126.63 (T1 + T2 minus M1) divided by S1: 582.17 M: minus 547.18 T: 34.99 PP:18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 + K2 + K4: 1,947.03 T1: 788.39 K1P + K2P: 846.25 T2: 229.68 M1: minus 126.63 (T1 + T2 minus M1) divided by S1: 617.15 M: minus 582.17 T: 34.98 PP:19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 + K2 + K4: 1,947.07 T1: 789.09 K1P + K2P: 846.26 T2: 229.96 M1: minus 126.63 (T1 + T2 minus M1) divided by S1: 652.15 M: minus 617.15 T: 35.00 PP:20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 + K2 + K4: 1,947.12 T1: 789.71 K1P + K2P: 846.28 T2: 230.20 M1: minus 126.63 (T1 + T2 minus M1) divided by S1: 687.14 M: minus 652.15 T: 34.99 PP:21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 + K2 + K4: 1,947.17 T1: 790.26 K1P + K2P: 846.30 T2: 230.42 M1: minus 126.63 (T1 + T2 minus M1) divided by S1: 722.12 M: minus 687.14 T: 34.98 PP:22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 + K2 + K4: 1,947.19 T1: 790.79 K1P + K2P: 846.32 T2: 230.62 M1: minus 126.63 (T1 + T2 minus M1) divided by S1: 757.12 M: minus 722.12 T: 35.00 PP:23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 + K2 + K4: 1,947.23 T1: 791.25 K1P + K2P: 8846.33 T2: 230.80 M1: minus 126.63 (T1 + T2 minus M1) divided by S1: 792.10 M: minus 757.12 T: 34.98 PP:24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 + K2 + K4: 1,947.26 T1: 791.68 K1P + K2P: 846.34 T2: 230.98 M1: minus 126.63 (T1 + T2 minus M1) divided by S1: 827.10 M: minus 792.10 T: 35.00 PP:25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 + K2 + K4: 1,947.29 T1: 792.07 K1P + K2P: 846.35 T2: 231.13 M1: minus 126.63 (T1 + T2 minus M1) divided by S1: 862.09 M: minus 827.10 T: 34.99 PP:26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 + K2 + K4: 1,947.32 T1: 792.43 K1P + K2P: 846.36 T2: 231.28 M1: minus 126.63 (T1 + T2 minus M1) divided by S1: 897.08 M: minus 862.09 T: 34.99 Total tax deducted for the year on regular salary $897.08 Total tax deducted for the year on non-periodic payments 126.63 Total tax deducted for the year on salary and non-periodic payments $1,023.71 * Note Tax on the non-periodic payment is T1 + T2 amounts determined at line 4B, less T1 + T2 amounts determined at line 4. For other similar payments, such as lump-sum payments, the same principle will apply. The non-periodic payment tax calculation for pay period 14 has been used to determine the steps to follow. For more details, see the example that begins on page 62. YTD = year-to-date PAGE 72 Option 2 - Examples when calculating the tax deductions on salary and non- periodic payments separately (continued) Nova Scotia PP: 1 Salary: 740 I YTD: 740 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 844.92 T2: 846.28 (T1 + T2 minus M1) divided by S1: 68.27 T: 68.27 PP: 2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 844.92 T2: 846.28 (T1 + T2 minus M1) divided by S1: 136.54 M: minus 58.27 T: 68.27 PP: 3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 844.92 T2: 846.28 (T1 + T2 minus M1) divided by S1: 204.81 M: minus 136.54 T: 68.27 PP: 4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 844.92 T2: 846.28 (T1 + T2 minus M1) divided by S1: 273.08 M: minus 204.81 T: 68.27 PP: 4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1 + K2 + K4: 1,958.25 T1: 942.75 K1P + K2P: 845.51 T2: 854.48 (T1 + T2 minus M1) divided by S1: see* M: minus 273.08 TB: 22.18 PP: 5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 + K2 + K4: 1,955.08 T1: 899.12 K1P + K2P: 843.65 T2: 828.91 M1: minus 22.18 (T1 + T2 minus M1) divided by S1: 328.05 M: minus 273.08 T: 54.97 PP: 6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 + K2 + K4: 1,945.47 T1: 767.03 K1P + K2P: 838.02 T2: 751.50 M1: minus 22.18 (T1 + T2 minus M1) divided by S1: 345.31 M: minus 328.05 T: 17.26 PP: 7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 + K2 + K4: 1,945.03 T1: 760.07 K1P + K2P: 837.76 T2: 747.96 M1: minus 22.18 (T1 + T2 minus M1) divided by S1: 400.28 M: minus 345.31 T: 54.97 PP: 7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1 + K2 + K4: 1,945.54 T1: 767.96 K1P + K2P: 838.06 T2: 752.05 M1: minus 22.18 (T1 + T2 minus M1) divided by S1: see* M: minus 400.28 TB: 11.08 PP: 8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 + K2 + K4: 1,945.21 T1: 763.42 K1P + K2P: 837.87 T2: 749.38 M1: minus 33.26 (T1 + T2 minus M1) divided by S1: 455.24 M: minus 400.28 T: 54.96 PP: 9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 + K2 + K4: 1,944.95 T1: 759.88 K1P + K2P: 837.72 T2: 747.31 M1: minus 33.26 (T1 + T2 minus M1) divided by S1: 510.21 M: minus 455.24 T: 54.97 PP: 10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 + K2 + K4: 1,944.74 T1: 757.06 K1P + K2P: 837.59 T2: 745.66 M1: minus 33.26 (T1 + T2 minus M1) divided by S1: 565.18 M: minus 510.21 T: 54.97 PP: 11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1 + K2 + K4: 1,944.58 T1: 754.74 K1P + K2P: 837.50 T2: 744.30 M1: minus 33.26 (T1 + T2 minus M1) divided by S1: 620.14 M: minus 565.18 T: 54.96 PP: 12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 + K2 + K4: 1,940.14 T1: 693.74 K1P + K2P: 834.89 T2: 708.56 M1: minus 33.26 (T1 + T2 minus M1) divided by S1: 631.86 M: minus 620.14 T: 11.72 PP: 13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 + K2 + K4: 1,940.35 T1: 696.65 K1P + K2P: 835.02 T2: 710.26 M1: minus 33.26 (T1 + T2 minus M1) divided by S1: 686.83 M: minus 631.86 T: 54.97 PP: 14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 + K2 + K4: 1,941.66 T1: 714.73 K1P + K2P: 835.80 T2: 720.85 M1: minus 33.26 (T1 + T2 minus M1) divided by S1: 755.10 M: minus 686.83 T: 68.27 PP: 14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1 + K2 + K4: 1,946.75 T1: 784.64 K1P + K2P: 838.77 T2: 761.83 M1: minus 33.26 (T1 + T2 minus M1) divided by S1: see* M: minus 755.10 TB: 110.89 PP: 15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 + K2 + K4: 1,946.84 T1: 785.76 K1P + K2P: 838.82 T2: 762.48 M1: minus 144.15 (T1 + T2 minus M1) divided by S1: 810.05 M: minus 755.10 T: 54.95 PP: 16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 + K2 + K4: 1,946.91 T1: 786.75 K1P + K2P: 838.87 T2: 763.05 M1: minus 144.15 (T1 + T2 minus M1) divided by S1: 865.02 M: minus 810.05 T: 54.97 PP: 17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 + K2 + K4: 1,946.96 T1: 787.63 K1P + K2P: 838.90 T2: 763.57 M1: minus 144.15 (T1 + T2 minus M1) divided by S1: 919.99 M: minus 865.02 T: 54.97 PP: 18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 + K2 + K4: 1,947.03 T1: 788.39 K1P + K2P: 838.93 T2: 765.02 M1: minus 144.15 (T1 + T2 minus M1) divided by S1: 974.95 M: minus 919.99 T: 54.96 PP: 19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 + K2 + K4: 1,947.07 T1: 789.09 K1P + K2P: 838.96 T2: 764.43 M1: minus 144.15 (T1 + T2 minus M1) divided by S1: 1,029.92 M: minus 974.95 T: 54.97 PP: 20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 + K2 + K4: 1,947.12 T1: 789.71 K1P + K2P: 838.99 T2: 764.79 M1: minus 144.15 (T1 + T2 minus M1) divided by S1: 1,084.88 M: minus 1,029.92 T: 54.96 PP: 21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 + K2 + K4: 1,947.17 T1: 790.26 K1P + K2P: 839.02 T2: 765.11 M1: minus 144.15 (T1 + T2 minus M1) divided by S1: 1,139.83 M: minus 1,084.88 T: 54.95 PP: 22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 + K2 + K4: 1,947.19 T1: 790.79 K1P + K2P: 839.03 T2: 765.42 M1: minus 144.15 (T1 + T2 minus M1) divided by S1: 1,194.82 M: minus 1,139.83 T: 54.99 PP: 23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 + K2 + K4: 1,947.23 T1: 791.25 K1P + K2P: 839.06 T2: 765.69 M1: minus 144.15 (T1 + T2 minus M1) divided by S1: 1,249.78 M: minus 1,194.82 T: 54.96 PP: 24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 + K2 + K4: 1,947.26 T1: 791.68 K1P + K2P: 839.07 T2: 765.95 M1: minus 144.15 (T1 + T2 minus M1) divided by S1: 1,304.75 M: minus 1,249.78 T: 54.97 PP: 25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 + K2 + K4: 1,947.29 T1: 792.07 K1P + K2P: 839.09 T2: 766.17 M1: minus 144.15 (T1 + T2 minus M1) divided by S1: 1,359.70 M: minus 1,304.75 T: 54.95 PP: 26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 + K2 + K4: 1,947.32 T1: 792.43 K1P + K2P: 839.10 T2: 766.39 M1: minus 144.15 (T1 + T2 minus M1) divided by S1: 1,414.67 M: minus 1,359.70 T: 54.97 Total tax deducted for the year on regular salary $1,414.67 Total tax deducted for the year on non-periodic payments 144.15 Total tax deducted for the year on salary and non-periodic payments $1,558.82 * Note Tax on the non-periodic payment is T1 + T2 amounts determined at line 4B, less T1 + T2 amounts determined at line 4. For other similar payments, such as lump-sum payments, the same principle will apply. The non-periodic payment tax calculation for pay period 14 has been used to determine the steps to follow. For more details, see the example that begins on page 62. YTD = year-to-date PAGE 73 Option 2 - Examples when calculating the tax deductions on salary and non- periodic payments separately (continued) Nunavut PP: 1 Salary: 740 I YTD: 740 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 533.69 T2: 235.91 (T1 + T2 minus M1) divided by S1: 44.80 T: 44.80 PP: 2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 533.69 T2: 235.91 (T1 + T2 minus M1) divided by S1: 89.59 M: minus 44.80 T: 44.79 PP: 3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 533.69 T2: 235.91 (T1 + T2 minus M1) divided by S1: 134.39 M: minus 89.59 T: 44.80 PP: 4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 533.69 T2: 235.91 (T1 + T2 minus M1) divided by S1: 179.18 M: minus 134.39 T: 44.79 PP: 4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1 + K2 + K4: 1,958.25 T1: 942.75 K1P + K2P: 533.96 T2: 239.64 (T1 + T2 minus M1) divided by S1: see* M: minus 179.18 TB: 17.71 PP: 5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 + K2 + K4: 1,955.08 T1: 899.12 K1P + K2P: 533.12 T2: 228.00 M1: minus 17.71 (T1 + T2 minus M1) divided by S1: 213.35 M: minus 179.18 T: 34.17 PP: 6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 + K2 + K4: 1,945.47 T1: 767.03 K1P + K2P: 530.55 T2: 192.78 M1: minus 17.71 (T1 + T2 minus M1) divided by S1: 217.41 M: minus 213.35 T: 4.06 PP: 7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 + K2 + K4: 1,945.03 T1: 760.97 K1P + K2P: 530.44 T2: 191.16 M1: minus 17.71 (T1 + T2 minus M1) divided by S1: 251.57 M: minus 217.41 T: 34.16 PP: 7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1 + K2 + K4: 1,945.54 T1: 767.96 K1P + K2P: 530.57 T2: 193.03 M1: minus 17.71 (T1 + T2 minus M1) divided by S1: see* M: minus 251.57 TB: 8.86 PP: 8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 + K2 + K4: 1,945.21 T1: 763.42 K1P + K2P: 530.48 T2: 191.82 M1: minus 26.57 (T1 + T2 minus M1) divided by S1: 285.74 M: minus 251.57 T: 34.17 PP: 9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 + K2 + K4: 1,944.95 T1: 759.88 K1P + K2P: 530.41 T2: 190.88 M1: minus 26.57 (T1 + T2 minus M1) divided by S1: 319.91 M: minus 285.74 T: 34.17 PP: 10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 + K2 + K4: 1,944.74 T1: 757.06 K1P + K2P: 530.35 T2: 190.13 M1: minus 26.57 (T1 + T2 minus M1) divided by S1: 354.08 M: minus 319.91 T: 34.17 PP: 11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1 + K2 + K4: 1,944.58 T1: 754.74 K1P + K2P: 530.31 T2: 189.51 M1: minus 26.57 (T1 + T2 minus M1) divided by S1: 388.25 M: minus 354.08 T: 34.17 PP: 12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 + K2 + K4: 1,940.14 T1: 693.74 K1P + K2P: 529.13 T2: 173.24 M1: minus 26.57 (T1 + T2 minus M1) divided by S1: 387.88 M: minus 388.25 T: 0.00 PP: 13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 + K2 + K4: 1,940.35 T1: 696.65 K1P + K2P: 529.19 T2: 174.01 M1: minus 26.57 (T1 + T2 minus M1) divided by S1: 422.05 M: minus 388.25 T: 33.80 PP: 14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 + K2 + K4: 1,941.66 T1: 714.73 K1P + K2P: 529.53 T2: 178.84 M1: minus 26.57 (T1 + T2 minus M1) divided by S1: 466.85 M: minus 422.05 T: 44.80 PP: 14B I YTD: 9,455 B: 500 B1:650 A: 18,209.29 K1 + K2 + K4: 1,946.75 T1: 784.64 K1P + K2P: 530.89 T2: 197.48 M1: minus 26.57 (T1 + T2 minus M1) divided by S1: see* M: minus 466.85 TB: 88.55 PP: 15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 + K2 + K4: 1,946.84 T1: 785.76 K1P + K2P: 530.92 T2: 197.77 M1: minus 115.12 (T1 + T2 minus M1) divided by S1: 501.01 M: minus 466.85 T: 34.16 PP: 16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 + K2 + K4: 1,946.91 T1: 786.75 K1P + K2P: 530.93 T2: 198.05 M1: minus 115.12 (T1 + T2 minus M1) divided by S1: 535.19 M: minus 501.01 T: 34.18 PP: 17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 + K2 + K4: 1,946.96 T1: 787.63 K1P + K2P: 530.95 T2: 198.27 M1: minus 115.12 (T1 + T2 minus M1) divided by S1: 569.36 M: minus 535.19 T: 34.17 PP: 18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 + K2 + K4: 1,947.03 T1: 788.39 K1P + K2P: 530.97 T2: 198.47 M1: minus 115.12 (T1 + T2 minus M1) divided by S1: 603.51 M: minus 569.36 T: 34.15 PP: 19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 + K2 + K4: 1,947.07 T1: 789.09 K1P + K2P: 530.98 T2: 198.66 M1: minus 115.12 (T1 + T2 minus M1) divided by S1: 637.69 M: minus 603.51 T: 34.18 PP: 20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 + K2 + K4: 1,947.12 T1: 789.71 K1P + K2P: 531.00 T2: 198.82 M1: minus 115.12 (T1 + T2 minus M1) divided by S1: 671.85 M: minus 637.69 T: 34.16 PP: 21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 + K2 + K4: 1,947.17 T1: 790.26 K1P + K2P: 531.00 T2: 198.98 M1: minus 115.12 (T1 + T2 minus M1) divided by S1: 706.02 M: minus 671.85 T: 34.17 PP: 22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 + K2 + K4: 1,947.19 T1: 790.79 K1P + K2P: 531.01 T2: 199.12 M1: minus 115.12 (T1 + T2 minus M1) divided by S1: 740.21 M: minus 706.02 T: 34.19 PP: 23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 + K2 + K4: 1,947.23 T1: 791.25 K1P + K2P: 531.02 T2: 199.24 M1: minus 115.12 (T1 + T2 minus M1) divided by S1: 774.37 M: minus 740.21 T: 34.16 PP: 24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 + K2 + K4: 1,947.26 T1: 791.68 K1P + K2P: 531.03 T2: 199.35 M1: minus 115.12 (T1 + T2 minus M1) divided by S1: 808.53 M: minus 774.37 T: 34.16 PP: 25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 + K2 + K4: 1,947.29 T1: 792.07 K1P + K2P: 531.04 T2: 199.46 M1: minus 115.12 (T1 + T2 minus M1) divided by S1: 842.70 M: minus 808.53 T: 34.17 PP: 26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 + K2 + K4: 1,947.32 T1: 792.43 K1P + K2P: 531.04 T2: 199.56 M1: minus 115.12 (T1 + T2 minus M1) divided by S1: 876.87 M: minus 842.70 T: 34.17 Total tax deducted for the year on regular salary $876.87 Total tax deducted for the year on non-periodic payments 115.12 Total tax deducted for the year on salary and non-periodic payments $991.99 * Note Tax on the non-periodic payment is T1 + T2 amounts determined at line 4B, less T1 + T2 amounts determined at line 4. For other similar payments, such as lump-sum payments, the same principle will apply. The non-periodic payment tax calculation for pay period 14 has been used to determine the steps to follow. For more details, see the example that begins on page 62. YTD = year-to-date PAGE 74 Option 2 - Examples when calculating the tax deductions on salary and non- periodic payments separately (continued) Ontario PP: 1 Salary: 740 I YTD: 740 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 532.08 T2: 439.54 (T1 + T2 minus M1) divided by S1: 52.63 T: 52.63 PP: 2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 532.08 T2: 439.54 (T1 + T2 minus M1) divided by S1: 105.25 M: minus 52.63 T: 52.62 PP: 3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 532.08 T2: 439.54 (T1 + T2 minus M1) divided by S1: 157.88 M: minus 105.25 T: 52.63 PP: 4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 532.08 T2: 439.54 (T1 + T2 minus M1) divided by S1: 210.51 M: minus 157.88 T: 52.63 PP: 4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1 + K2 + K4: 1,958.25 T1: 942.75 K1P + K2P: 532.42 T2: 444.25 (T1 + T2 minus M1) divided by S1: see* M: minus 210.51 TB: 18.69 PP: 5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 + K2 + K4: 1,955.08 T1: 899.12 K1P + K2P: 531.35 T2: 425.12 M1: minus 18.69 (T1 + T2 minus M1) divided by S1: 251.07 M: minus 210.51 T: 40.56 PP: 6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 + K2 + K4: 1,945.47 T1: 767.03 K1P + K2P: 528.11 T2: 336.20 M1: minus 18.69 (T1 + T2 minus M1) divided by S1: 250.28 M: minus 251.07 T: 0.00 PP: 7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 + K2 + K4: 1,945.03 T1: 760.97 K1P + K2P: 527.97 T2: 332.10 M1: minus 18.69 (T1 + T2 minus M1) divided by S1: 289.26 M: minus 251.07 T: 38.19 PP: 7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1 + K2 + K4: 1,945.54 T1: 767.96 K1P + K2P: 528.14 T2: 336.82 M1: minus 18.69 (T1 + T2 minus M1) divided by S1: see* M: minus 289.26 TB: 11.71 PP: 8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 + K2 + K4: 1,945.21 T1: 763.42 K1P + K2P: 528.03 T2: 333.74 M1: minus 30.40 (T1 + T2 minus M1) divided by S1: 328.23 M: minus 289.26 T: 38.97 PP: 9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 + K2 + K4: 1,944.95 T1: 759.88 K1P + K2P: 527.94 T2: 331.38 M1: minus 30.40 (T1 + T2 minus M1) divided by S1: 367.22 M: minus 328.23 T: 38.99 PP: 10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 + K2 + K4: 1,944.74 T1: 757.06 K1P + K2P: 527.88 T2: 329.46 M1: minus 30.40 (T1 + T2 minus M1) divided by S1: 406.20 M: minus 367.22 T: 38.98 PP: 11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1 + K2 + K4: 1,944.58 T1: 754.74 K1P + K2P: 527.81 T2: 327.92 M1: minus 30.40 (T1 + T2 minus M1) divided by S1: 445.19 M: minus 406.20 T: 38.99 PP: 12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 + K2 + K4: 1,940.14 T1: 693.74 K1P + K2P: 526.32 T2: 286.84 M1: minus 30.40 (T1 + T2 minus M1) divided by S1: 438.54 M: minus 445.19 T: 0.00 PP: 13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 + K2 + K4: 1,940.35 T1: 696.65 K1P + K2P: 526.40 T2: 288.78 M1: minus 30.40 (T1 + T2 minus M1) divided by S1: 477.52 M: minus 445.19 T: 32.33 PP: 14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 + K2 + K4: 1,941.66 T1: 714.73 K1P + K2P: 526.84 T2: 300.96 M1: minus 30.40 (T1 + T2 minus M1) divided by S1: 530.54 M: minus 477.52 T: 53.02 PP: 14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1 + K2 + K4: 1,946.75 T1: 784.64 K1P + K2P: 528.55 T2: 348.04 M1: minus 30.40 (T1 + T2 minus M1) divided by S1: see* M: minus 530.54 TB: 116.99 PP: 15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 + K2 + K4: 1,946.84 T1: 785.76 K1P + K2P: 528.58 T2: 348.80 M1: minus 147.39 (T1 + T2 minus M1) divided by S1: 569.52 M: minus 530.54 T: 38.98 PP: 16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 + K2 + K4: 1,946.91 T1: 786.75 K1P + K2P: 528.60 T2: 349.46 M1: minus 147.39 (T1 + T2 minus M1) divided by S1: 608.50 M: minus 569.52 T: 38.98 PP: 17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 + K2 + K4: 1,946.96 T1: 787.63 K1P + K2P: 528.62 T2: 350.04 M1: minus 147.39 (T1 + T2 minus M1) divided by S1: 647.49 M: minus 608.50 T: 38.99 PP: 18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 + K2 + K4: 1,947.03 T1: 788.39 K1P + K2P: 528.64 T2: 350.56 M1: minus 147.39 (T1 + T2 minus M1) divided by S1: 686.46 M: minus 647.49 T: 38.97 PP: 19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 + K2 + K4: 1,947.07 T1: 789.09 K1P + K2P: 528.66 T2: 351.02 M1: minus 147.39 (T1 + T2 minus M1) divided by S1: 725.45 M: minus 686.46 T: 38.99 PP: 20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 + K2 + K4: 1,947.12 T1: 789.71 K1P + K2P: 528.67 T2: 351.46 M1: minus 147.39 (T1 + T2 minus M1) divided by S1: 764.45 M: minus 725.45 T: 39.00 PP: 21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 + K2 + K4: 1,947.17 T1: 790.26 K1P + K2P: 528.69 T2: 351.82 M1: minus 147.39 (T1 + T2 minus M1) divided by S1: 803.40 M: minus 764.45 T: 38.95 PP: 22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 + K2 + K4: 1,947.19 T1: 790.79 K1P + K2P: 528.70 T2: 352.18 M1: minus 147.39 (T1 + T2 minus M1) divided by S1: 842.41 M: minus 803.40 T: 39.01 PP: 23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 + K2 + K4: 1,947.23 T1: 791.25 K1P + K2P: 528.71 T2: 352.48 M1: minus 147.39 (T1 + T2 minus M1) divided by S1: 881.38 M: minus 842.41 T: 38.97 PP: 24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 + K2 + K4: 1,947.26 T1: 791.68 K1P + K2P: 528.72 T2: 352.78 M1: minus 147.39 (T1 + T2 minus M1) divided by S1: 920.37 M: minus 881.38 T: 38.99 PP: 25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 + K2 + K4: 1,947.29 T1: 792.07 K1P + K2P: 528.73 T2: 353.04 M1: minus 147.39 (T1 + T2 minus M1) divided by S1: 959.35 M: minus 920.37 T: 38.98 PP: 26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 + K2 + K4: 1,947.32 T1: 792.43 K1P + K2P: 528.74 T2: 353.28 M1: minus 147.39 (T1 + T2 minus M1) divided by S1: 998.32 M: minus 959.35 T: 38.97 Total tax deducted for the year on regular salary $998.32 Total tax deducted for the year on non-periodic payments 147.39 Total tax deducted for the year on salary and non-periodic payments $1,145.71 * Note Tax on the non-periodic payment is T1 + T2 amounts determined at line 4B, less T1 + T2 amounts determined at line 4. For other similar payments, such as lump-sum payments, the same principle will apply. The non-periodic payment tax calculation for pay period 14 has been used to determine the steps to follow. For more details, see the example that begins on page 62. YTD = year-to-date PAGE 75 Option 2 - Examples when calculating the tax deductions on salary and non- periodic payments separately (continued) Prince Edward Island PP: 1 Salary: 740 I YTD: 740 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 866.23 T2: 1,1,019.29 (T1 + T2 minus M1) divided by S1: 74.93 T: 74.93 PP: 2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 866.23 T2: 1,019.29 (T1 + T2 minus M1) divided by S1: 149.85 M: minus 74.93 T: 74.92 PP: 3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 866.23 T2: 1,019.29 (T1 + T2 minus M1) divided by S1: 224.78 M: minus 149.85 T: 74.93 PP: 4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 866.23 T2: 1,019.29 (T1 + T2 minus M1) divided by S1: 299.70 M: minus 224.78 T: 74.92 PP: 4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1 + K2 + K4: 1,958.25 T1: 942.75 K1P + K2P: 866.90 T2: 1,028.42 (T1 + T2 minus M1) divided by S1: see* M: minus 299.70 TB: 23.11 PP: 5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 + K2 + K4: 1,955.08 T1: 899.12 K1P + K2P: 864.83 T2: 999.91 M1: minus 23.11 (T1 + T2 minus M1) divided by S1: 360.75 M: minus 299.70 T: 61.05 PP: 6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 + K2 + K4: 1,945.47 T1: 767.03 K1P + K2P: 858.55 T2: 913.62 M1: minus 23.11 (T1 + T2 minus M1) divided by S1: 382.51 M: minus 360.75 T: 21.76 PP: 7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 + K2 + K4: 1,945.03 T1: 760.97 K1P + K2P: 858.26 T2: 909.66 M1: minus 23.11 (T1 + T2 minus M1) divided by S1: 443.56 M: minus 382.51 T: 61.05 PP: 7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1 + K2 + K4: 1,945.54 T1: 767.96 K1P + K2P: 858.60 T2: 914.22 M1: minus 23.11 (T1 + T2 minus M1) divided by S1: see* M: minus 443.56 TB: 11.55 PP: 8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 + K2 + K4: 1,945.21 T1: 763.42 K1P + K2P: 858.38 T2: 911.26 M1: minus 34.66 (T1 + T2 minus M1) divided by S1: 504.62 M: minus 443.56 T: 61.06 PP: 9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 + K2 + K4: 1,944.95 T1: 759.88 K1P + K2P: 858.22 T2: 908.94 M1: minus 34.66 (T1 + T2 minus M1) divided by S1: 565.67 M: minus 504.62 T: 61.05 PP: 10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 + K2 + K4: 1,944.74 T1: 757.06 K1P + K2P: 858.08 T2: 907.10 M1: minus 34.66 (T1 + T2 minus M1) divided by S1: 626.73 M: minus 565.67 T: 61.06 PP: 11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1 + K2 + K4: 1,944.58 T1: 754.74 K1P + K2P: 857.97 T2: 905.58 M1: minus 34.66 (T1 + T2 minus M1) divided by S1: 687.78 M: minus 626.73 T: 61.05 PP: 12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 + K2 + K4: 1,940.14 T1: 693.74 K1P + K2P: 855.07 T2: 865.73 M1: minus 34.66 (T1 + T2 minus M1) divided by S1: 703.76 M: minus 687.78 T: 15.98 PP: 13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 + K2 + K4: 1,940.35 T1: 696.65 K1P + K2P: 855.21 T2: 867.63 M1: minus 34.66 (T1 + T2 minus M1) divided by S1: 764.81 M: minus 703.76 T: 61.05 PP: 14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 + K2 + K4: 1,941.66 T1: 714.73 K1P + K2P: 856.07 T2: 879.44 M1: minus 34.66 (T1 + T2 minus M1) divided by S1: 839.74 M: minus 764.81 T: 74.93 PP: 14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1 + K2 + K4: 1,946.75 T1: 784.64 K1P + K2P: 859.39 T2: 925.12 M1: minus 34.66 (T1 + T2 minus M1) divided by S1: see* M: minus 839.74 TB: 115.59 PP: 15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 + K2 + K4: 1,946.84 T1: 785.76 K1P + K2P: 859.44 T2: 925.86 M1: minus 150.25 (T1 + T2 minus M1) divided by S1: 900.79 M: minus 839.74 T: 61.05 PP: 16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 + K2 + K4: 1,946.91 T1: 786.75 K1P + K2P: 859.49 T2: 926.50 M1: minus 150.25 (T1 + T2 minus M1) divided by S1: 961.85 M: minus 900.79 T: 61.06 PP: 17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 + K2 + K4: 1,946.96 T1: 787.63 K1P + K2P: 859.53 T2: 927.07 M1: minus 150.25 (T1 + T2 minus M1) divided by S1: 1,022.91 M: minus 961.85 T: 61.06 PP: 18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 + K2 + K4: 1,947.03 T1: 788.39 K1P + K2P: 859.57 T2: 927.57 M1: minus 150.25 (T1 + T2 minus M1) divided by S1: 1,083.95 M: minus 1,022.91 T: 61.04 PP: 19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 + K2 + K4: 1,947.07 T1: 789.09 K1P + K2P: 859.60 T2: 928.02 M1: minus 150.25 (T1 + T2 minus M1) divided by S1: 1,145.01 M: minus 1,083.95 T: 61.06 PP: 20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 + K2 + K4: 1,947.12 T1: 789.71 K1P + K2P: 859.63 T2: 928.43 M1: minus 150.25 (T1 + T2 minus M1) divided by S1: 1,206.07 M: minus 1,145.01 T: 61.06 PP: 21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 + K2 + K4: 1,947.17 T1: 790.26 K1P + K2P: 859.66 T2: 928.79 M1: minus 150.25 (T1 + T2 minus M1) divided by S1: 1,267.11 M: minus 1,206.07 T: 61.04 PP: 22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 + K2 + K4: 1,947.19 T1: 790.79 K1P + K2P: 859.68 T2: 929.13 M1: minus 150.25 (T1 + T2 minus M1) divided by S1: 1,328.18 M: minus 1,267.11 T: 61.07 PP: 23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 + K2 + K4: 1,947.23 T1: 791.25 K1P + K2P: 859.70 T2: 929.44 M1: minus 150.25 (T1 + T2 minus M1) divided by S1: 1,389.24 M: minus 1,328.18 T: 61.06 PP: 24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 + K2 + K4: 1,947.26 T1: 791.68 K1P + K2P: 859.73 T2: 929.71 M1: minus 150.25 (T1 + T2 minus M1) divided by S1: 1,450.28 M: minus 1,389.24 T: 61.04 PP: 25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 + K2 + K4: 1,1,947.29 T1: 792.07 K1P + K2P: 859.74 T2: 929.98 M1: minus 150.25 (T1 + T2 minus M1) divided by S1: 1,511.35 M: minus 1,450.28 T: 61.07 PP: 26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 + K2 + K4: 1,947.32 T1: 792.43 K1P + K2P: 859.77 T2: 930.20 M1: minus 150.25 (T1 + T2 minus M1) divided by S1: 1,572.38 M: minus 1,511.35 T: 61.03 Total tax deducted for the year on regular salary $1,572.38 Total tax deducted for the year on non-periodic payments 150.25 Total tax deducted for the year on salary and non-periodic payments $1,722.63 * Note Tax on the non-periodic payment is T1 + T2 amounts determined at line 4B, less T1 + T2 amounts determined at line 4. For other similar payments, such as lump-sum payments, the same principle will apply. The non-periodic payment tax calculation for pay period 14 has been used to determine the steps to follow. For more details, see the example that begins on page 62. YTD = year-to-date PAGE 76 Option 2 - Examples when calculating the tax deductions on salary and non- periodic payments separately (continued) Quebec PP: 1 Salary: 740 I YTD: 740 A: 19,240.00 K1 +K2 + K4: 1,964.74 T3: 921.26 Abatement: 152.01 T1: 769.25 (T1 minus M1) divided S1: 29.59 T: 29.59 PP: 2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 +K2 + K4: 1,964.74 T3: 921.26 Abatement: 152.01 T1: 769.25 (T1 minus M1) divided S1: 59.17 M: minus 29.59 T: 29.58 PP: 3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 +K2 + K4: 1,964.74 T3: 921.26 Abatement: 152.01 T1: 769.25 (T1 minus M1) divided S1: 88.76 M: minus 59.17 T: 29.59 PP: 4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 +K2 + K4: 1,964.74 T3: 921.26 Abatement: 152.01 T1: 769.25 (T1 minus M1) divided S1: 118.35 M: minus 88.76 T: 29.59 PP: 4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1 +K2 + K4: 1,965.81 T3: 935.19 Abatement: 154.31 T1: 780.88 (T1 minus M1) divided S1: see* M: minus 118.35 TB: 11.63 PP: 5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 +K2 + K4: 1,962.51 T3: 891.69 Abatement: 147.13 T1: 744.56 M1: minus 11.63 (T1 minus M1) divided S1: 140.95 M: minus 118.35 T: 22.60 PP: 6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 +K2 + K4: 1,952.50 T3: 760.00 Abatement: 125.40 T1: 634.60 M1: minus 11.63 (T1 minus M1) divided S1: 143.76 M: minus 140.95 T: 2.81 PP: 7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 +K2 + K4: 1,952.06 T3: 753.94 Abatement: 124.40 T1: 629.54 M1: minus 11.63 (T1 minus M1) divided S1: 166.36 M: minus 143.76 T: 22.60 PP: 7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1 +K2 + K4: 1,952.58 T3: 760.92 Abatement: 125.55 T1: 635.37 M1: minus 11.63 (T1 minus M1) divided S1: see* M: minus 166.36 TB: 5.83 PP: 8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 +K2 + K4: 1,952.24 T3: 756.39 Abatement: 124.80 T1: 631.59 M1: minus 17.46 (T1 minus M1) divided S1: 188.96 M: minus 166.36 T: 22.60 PP: 9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 +K2 + K4: 1,951.97 T3: 752.86 Abatement: 124.22 T1: 628.64 M1: minus 17.46 (T1 minus M1) divided S1: 211.56 M: minus 188.96 T: 22.60 PP: 10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 +K2 + K4: 1,951.75 T3: 750.05 Abatement: 123.76 T1: 626.29 M1: minus 17.46 (T1 minus M1) divided S1: 234.17 M: minus 211.56 T: 22.61 PP: 11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1 +K2 + K4: 1,951.58 T3: 747.74 Abatement: 123.38 T1: 624.36 M1: minus 17.46 (T1 minus M1) divided S1: 256.77 M: minus 234.17 T: 22.60 PP: 12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 +K2 + K4: 1,946.96 T3: 688.92 Abatement: 113.34 T1: 573.58 M1: minus 17.46 (T1 minus M1) divided S1: 256.67 M: minus 256.77 T: 0.00 PP: 13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 +K2 + K4: 1,947.18 T3: 689.82 Abatement: 113.82 T1: 576.00 M1: minus 17.46 (T1 minus M1) divided S1: 279.27 M: minus 256.77 T: 22.50 PP: 14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 +K2 + K4: 1,948.55 T3: 707.84 Abatement: 116.79 T1: 591.05 M1: minus 17.46 (T1 minus M1) divided S1: 308.86 M: minus 279.27 T: 29.59 PP: 14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1 +K2 + K4: 1,953.84 T3: 777.55 Abatement: 128.30 T1: 649.25 M1: minus 17.46 (T1 minus M1) divided S1: see* M: minus 308.86 TB: 58.20 PP: 15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 +K2 + K4: 1,953.92 T3: 778.68 Abatement: 128.48 T1: 650.20 M1: minus 75.66 (T1 minus M1) divided S1: 331.47 M: minus 308.86 T: 22.61 PP: 16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 +K2 + K4: 1,954.01 T3: 779.65 Abatement: 128.64 T1: 651.01 M1: minus 75.66 (T1 minus M1) divided S1: 354.06 M: minus 331.47 T: 22.59 PP: 17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 +K2 + K4: 1,954.07 T3: 780.52 Abatement: 128.79 T1: 651.73 M1: minus 75.66 (T1 minus M1) divided S1: 376.66 M: minus 354.06 T: 22.60 PP: 18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 +K2 + K4: 1,954.12 T3: 781.30 Abatement: 128.91 T1: 652.39 M1: minus 75.66 (T1 minus M1) divided S1: 399.27 M: minus 376.66 T: 22.61 PP: 19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 +K2 + K4: 1,954.18 T3: 781.98 Abatement: 129.03 T1: 652.95 M1: minus 75.66 (T1 minus M1) divided S1: 421.87 M: minus 399.27 T: 22.60 PP: 20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 +K2 + K4: 1,954.22 T3: 782.61 Abatement: 129.13 T1: 653.48 M1: minus 75.66 (T1 minus M1) divided S1: 444.48 M: minus 421.87 T: 22.61 PP: 21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 +K2 + K4: 1,954.26 T3: 783.17 Abatement: 129.22 T1: 653.95 M1: minus 75.66 (T1 minus M1) divided S1: 467.08 M: minus 444.48 T: 22.60 PP: 22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 +K2 + K4: 1,954.31 T3: 783.67 Abatement: 129.31 T1: 654.36 M1: minus 75.66 (T1 minus M1) divided S1: 489.67 M: minus 467.08 T: 22.59 PP: 23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 +K2 + K4: 1,954.35 T3: 784.13 Abatement: 129.38 T1: 654.75 M1: minus 75.66 (T1 minus M1) divided S1: 512.27 M: minus 489.67 T: 22.60 PP: 24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 +K2 + K4: 1,954.37 T3: 784.57 Abatement: 129.45 T1: 655.12 M1: minus 75.66 (T1 minus M1) divided S1: 534.89 M: minus 512.27 T: 22.62 PP: 25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 +K2 + K4: 1,954.40 T3: 784.96 Abatement: 129.52 T1: 655.44 M1: minus 75.66 (T1 minus M1) divided S1: 557.48 M: minus 534.89 T: 22.59 PP: 26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 +K2 + K4: 1,954.44 T3: 785.31 Abatement: 129.58 T1: 655.73 M1: minus 75.66 (T1 minus M1) divided S1: 580.07 M: minus 557.48 T: 22.59 Total tax deducted for the year on regular salary $580.07 Total tax deducted for the year on non-periodic payments 75.66 Total tax deducted for the year on salary and non-periodic payments $655.73 * Note Tax on the non-periodic payment is T1 + T2 amounts determined at line 4B, less T1 + T2 amounts determined at line 4. For other similar payments, such as lump-sum payments, the same principle will apply. The non-periodic payment tax calculation for pay period 14 has been used to determine the steps to follow. For more details, see the example that begins on page 62. YTD = year-to-date PAGE 77 Option 2 - Examples when calculating the tax deductions on salary and non- periodic payments separately (continued) Saskatchewan PP: 1 Salary: 740 I YTD: 740 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 1,768.05 T2: 348.35 (T1 + T2 minus M1) divided by S1: 49.12 T: 49.12 PP: 2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 1,768.05 T2: 348.35 (T1 + T2 minus M1) divided by S1: 98.24 M: minus 49.12 T: 49.12 PP: 3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 1,768.05 T2: 348.35 (T1 + T2 minus M1) divided by S1: 147.36 M: minus 98.24 T: 49.12 PP: 4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P: 1,768.05 T2: 348.35 (T1 + T2 minus M1) divided by S1: 196.48 M: minus 147.36 T: 49.12 PP: 4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1 + K2 + K4: 1,958.25 T1: 942.75 K1P + K2P: 1,768.80 T2: 358.60 (T1 + T2 minus M1) divided by S1: see* M: minus 196.48 TB: 24.23 PP: 5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 + K2 + K4: 1,955.08 T1: 899.12 K1P + K2P: 1,766.47 T2: 326.61 M1: minus 24.23 (T1 + T2 minus M1) divided by S1: 231.06 M: minus 196.48 T: 34.58 PP: 6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 + K2 + K4: 1,945.47 T1: 767.03 K1P + K2P: 1,759.43 T2: 229.74 M1: minus 24.23 (T1 + T2 minus M1) divided by S1: 224.43 M: minus 231.06 T: 0.00 PP: 7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 + K2 + K4: 1,945.03 T1: 760.97 K1P + K2P: 1,759.10 T2: 225.30 M1: minus 24.23 (T1 + T2 minus M1) divided by S1: 259.01 M: minus 231.06 T: 27.95 PP: 7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1 + K2 + K4: 1,945.54 T1: 767.96 K1P + K2P: 1,759.48 T2: 230.42 M1: minus 24.23 (T1 + T2 minus M1) divided by S1: see* M: minus 259.01 TB: 12.11 PP: 8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 + K2 + K4: 1,945.21 T1: 763.42 K1P + K2P: 1,759.24 T2: 227.09 M1: minus 36.34 (T1 + T2 minus M1) divided by S1: 293.59 M: minus 259.01 T: 34.58 PP: 9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 + K2 + K4: 1,944.95 T1: 759.88 K1P + K2P: 1,759.05 T2: 224.49 M1: minus 36.34 (T1 + T2 minus M1) divided by S1: 328.16 M: minus 293.59 T: 34.57 PP: 10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 + K2 + K4: 1,944.74 T1: 757.06 K1P + K2P: 1,758.90 T2: 222.42 M1: minus 36.34 (T1 + T2 minus M1) divided by S1: 362.75 M: minus 328.16 T: 34.59 PP: 11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1 + K2 + K4: 1,944.58 T1: 754.74 K1P + K2P: 1,758.78 T2: 220.72 M1: minus 36.34 (T1 + T2 minus M1) divided by S1: 397.32 M: minus 362.75 T: 34.57 PP: 12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 + K2 + K4: 1,940.14 T1: 693.74 K1P + K2P: 1,755.52 T2: 175.99 M1: minus 36.34 (T1 + T2 minus M1) divided by S1: 384.64 M: minus 397.32 T: 0.00 PP: 13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 + K2 + K4: 1,940.35 T1: 696.65 K1P + K2P: 1,755.68 T2: 178.12 M1: minus 36.34 (T1 + T2 minus M1) divided by S1: 419.22 M: minus 397.32 T: 21.90 PP: 14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 + K2 + K4: 1,941.66 T1: 714.73 K1P + K2P: 1,756.64 T2: 191.38 M1: minus 36.34 (T1 + T2 minus M1) divided by S1: 468.34 M: minus 419.22 T: 49.12 PP: 14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1 + K2 + K4: 1,946.75 T1: 784.64 K1P + K2P: 1,760.37 T2: 242.65 M1: minus 36.34 (T1 + T2 minus M1) divided by S1: see* M: minus 468.34 TB: 121.18 PP: 15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 + K2 + K4: 1,946.84 T1: 785.76 K1P + K2P: 1,760.43 T2: 243.48 M1: minus 157.52 (T1 + T2 minus M1) divided by S1: 502.92 M: minus 468.34 T: 34.58 PP: 16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 + K2 + K4: 1,946.91 T1: 786.75 K1P + K2P: 1,760.48 T2: 244.20 M1: minus 157.52 (T1 + T2 minus M1) divided by S1: 537.50 M: minus 502.92 T: 34.58 PP: 17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 + K2 + K4: 1,946.96 T1: 787.63 K1P + K2P: 1,760.53 T2: 244.83 M1: minus 157.52 (T1 + T2 minus M1) divided by S1: 572.08 M: minus 537.50 T: 34.58 PP: 18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 + K2 + K4: 1,947.03 T1: 788.39 K1P + K2P: 1,760.57 T2: 245.40 M1: minus 157.52 (T1 + T2 minus M1) divided by S1: 606.65 M: minus 572.08 T: 34.57 PP: 19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 + K2 + K4: 1,947.07 T1: 789.09 K1P + K2P: 1,760.60 T2: 245.92 M1: minus 157.52 (T1 + T2 minus M1) divided by S1: 641.24 M: minus 606.65 T: 34.59 PP: 20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 + K2 + K4: 1,947.12 T1: 789.71 K1P + K2P: 1,760.64 T2: 246.37 M1: minus 157.52 (T1 + T2 minus M1) divided by S1: 675.82 M: minus 641.24 T: 34.58 PP: 21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 + K2 + K4: 1,947.17 T1: 790.26 K1P + K2P: 1,760.67 T2: 246.78 M1: minus 157.52 (T1 + T2 minus M1) divided by S1: 710.38 M: minus 675.82 T: 34.56 PP: 22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 + K2 + K4: 1,947.19 T1: 790.79 K1P + K2P: 1,760.69 T2: 247.16 M1: minus 157.52 (T1 + T2 minus M1) divided by S1: 744.98 M: minus 710.38 T: 34.60 PP: 23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 + K2 + K4: 1,947.23 T1: 791.25 K1P + K2P: 1,760.72 T2: 247.50 M1: minus 157.52 (T1 + T2 minus M1) divided by S1: 779.55 M: minus 744.98 T: 34.57 PP: 24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 + K2 + K4: 1,947.26 T1: 791.68 K1P + K2P: 1,760.75 T2: 247.80 M1: minus 157.52 (T1 + T2 minus M1) divided by S1: 814.12 M: minus 779.55 T: 34.57 PP: 25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 + K2 + K4: 1,947.29 T1: 792.07 K1P + K2P: 1,760.76 T2: 248.10 M1: minus 157.52 (T1 + T2 minus M1) divided by S1: 848.70 M: minus 814.12 T: 34.58 PP: 26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 + K2 + K4: 1,947.32 T1: 792.43 K1P + K2P: 1,760.79 T2: 248.36 M1: minus 157.52 (T1 + T2 minus M1) divided by S1: 883.27 M: minus 848.70 T: 34.57 Total tax deducted for the year on regular salary $883.27 Total tax deducted for the year on non-periodic payments 157.52 Total tax deducted for the year on salary and non-periodic payments $1,040.79 * Note Tax on the non-periodic payment is T1 + T2 amounts determined at line 4B, less T1 + T2 amounts determined at line 4. For other similar payments, such as lump-sum payments, the same principle will apply. The non-periodic payment tax calculation for pay period 14 has been used to determine the steps to follow. For more details, see the example that begins on page 62. YTD = year-to-date PAGE 78 Option 2 - Examples when calculating the tax deductions on salary and non- periodic payments separately (continued) Yukon PP: 1 Salary: 740 I YTD: 740 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P + K4P: 918.60 T2: 435.90 (T1 + T2 minus M1) divided by S1: 52.49 T: 52.49 PP: 2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 918.60 K1P + K2P + K4P: 435.90 T2: 435.90 (T1 + T2 minus M1) divided by S1: 104.97 M: minus 52.49 T: 52.48 PP: 3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P + K4P: 918.60 T2: 435.90 (T1 + T2 minus M1) divided by S1: 157.46 M: minus 104.97 T: 52.49 PP: 4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 + K2 + K4: 1,957.23 T1: 928.77 K1P + K2P + K4P: 918.60 T2: 435.90 (T1 + T2 minus M1) divided by S1: 209.95 M: minus 157.46 T: 52.49 PP: 4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1 + K2 + K4: 1,958.25 T1: 942.75 K1P + K2P + K4P: 919.08 T2: 442.46 (T1 + T2 minus M1) divided by S1: see* M: minus 209.95 TB: 20.54 PP: 5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 + K2 + K4: 1,955.08 T1: 899.12 K1P + K2P + K4P: 917.58 T2: 421.99 M1: minus 20.54 (T1 + T2 minus M1) divided by S1: 250.11 M: minus 209.95 T: 40.16 PP: 6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 + K2 + K4: 1,945.47 T1: 767.03 K1P + K2P + K4P: 913.08 T2: 359.99 M1: minus 20.54 (T1 + T2 minus M1) divided by S1: 255.34 M: minus 250.11 T: 5.23 PP: 7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 + K2 + K4: 1,945.03 T1: 760.97 K1P + K2P + K4P: 912.87 T2: 357.15 M1: minus 20.54 (T1 + T2 minus M1) divided by S1: 295.50 M: minus 255.34 T: 40.16 PP: 7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1 + K2 + K4: 1,945.54 T1: 767.96 K1P + K2P + K4P: 913.11 T2: 360.43 M1: minus 20.54 (T1 + T2 minus M1) divided by S1: see* M: minus 295.50 TB: 10.27 PP: 8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 + K2 + K4: 1,945.21 T1: 763.42 K1P + K2P + K4P: 912.95 T2: 358.30 M1: minus 30.81 (T1 + T2 minus M1) divided by S1: 335.66 M: minus 295.50 T: 40.16 PP: 9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 + K2 + K4: 1,944.95 T1: 759.88 K1P + K2P + K4P: 912.83 T2: 356.64 M1: minus 30.81 (T1 + T2 minus M1) divided by S1: 375.82 M: minus 335.66 T: 40.16 PP: 10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 + K2 + K4: 1,944.74 T1: 757.06 K1P + K2P + K4P: 912.74 T2: 355.30 M1: minus 30.81 (T1 + T2 minus M1) divided by S1: 415.98 M: minus 375.82 T: 40.16 PP: 11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1 + K2 + K4: 1,944.58 T1: 754.74 K1P + K2P + K4P: 912.65 T2: 354.23 M1: minus 30.81 (T1 + T2 minus M1) divided by S1: 456.14 M: minus 415.98 T: 40.16 PP: 12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 + K2 + K4: 1,940.14 T1: 693.74 K1P + K2P + K4P: 910.57 T2: 325.60 M1: minus 30.81 (T1 + T2 minus M1) divided by S1: 456.24 M: minus 456.14 T: 0.10 PP: 13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 + K2 + K4: 1,940.35 T1: 696.65 K1P + K2P + K4P: 910.68 T2: 326.95 M1: minus 30.81 (T1 + T2 minus M1) divided by S1: 496.40 M: minus 456.24 T: 40.16 PP: 14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 + K2 + K4: 1,941.66 T1: 714.73 K1P + K2P + K4P: 911.30 T2: 335.43 M1: minus 30.81 (T1 + T2 minus M1) divided by S1: 548.88 M: minus 496.40 T: 52.48 PP: 14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1 + K2 + K4: 1,946.75 T1: 784.64 K1P + K2P + K4P: 913.68 T2: 368.25 M1: minus 30.81 (T1 + T2 minus M1) divided by S1: see* M: minus 548.88 TB: 102.73 PP: 15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 + K2 + K4: 1,946.84 T1: 785.76 K1P + K2P + K4P: 913.72 T2: 368.78 M1: minus 133.54 (T1 + T2 minus M1) divided by S1: 589.04 M: minus 548.88 T: 40.16 PP: 16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 + K2 + K4: 1,946.91 T1: 786.75 K1P + K2P + K4P: 913.75 T2: 369.25 M1: minus 133.54 (T1 + T2 minus M1) divided by S1: 629.21 M: minus 589.04 T: 40.17 PP: 17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 + K2 + K4: 1,946.96 T1: 787.63 K1P + K2P + K4P: 913.78 T2: 369.65 M1: minus 133.54 (T1 + T2 minus M1) divided by S1: 669.37 M: minus 629.21 T: 40.16 PP: 18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 + K2 + K4: 1,947.03 T1: 788.39 K1P + K2P + K4P: 913.80 T2: 370.02 M1: minus 133.54 (T1 + T2 minus M1) divided by S1: 709.53 M: minus 669.37 T: 40.16 PP: 19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 + K2 + K4: 1,947.07 T1: 789.09 K1P + K2P + K4P: 913.83 T2: 370.34 M1: minus 133.54 (T1 + T2 minus M1) divided by S1: 749.69 M: minus 709.53 T: 40.16 PP: 20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 + K2 + K4: 1,947.12 T1: 789.71 K1P + K2P + K4P: 913.85 T2: 370.63 M1: minus 133.54 (T1 + T2 minus M1) divided by S1: 789.85 M: minus 749.69 T: 40.16 PP: 21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 + K2 + K4: 1,947.17 T1: 790.26 K1P + K2P + K4P: 913.87 T2: 370.90 M1: minus 133.54 (T1 + T2 minus M1) divided by S1: 830.00 M: minus 789.85 T: 40.15 PP: 22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 + K2 + K4: 1,947.19 T1: 790.79 K1P + K2P + K4P: 913.89 T2: 371.13 M1: minus 133.54 (T1 + T2 minus M1) divided by S1: 870.17 M: minus 830.00 T: 40.17 PP: 23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 + K2 + K4: 1,947.23 T1: 791.25 K1P + K2P + K4P: 913.90 T2: 371.36 M1: minus 133.54 (T1 + T2 minus M1) divided by S1: 910.33 M: minus 870.17 T: 40.16 PP: 24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 + K2 + K4: 1,947.26 T1: 791.68 K1P + K2P + K4P: 913.91 T2: 371.56 M1: minus 133.54 (T1 + T2 minus M1) divided by S1: 950.49 M: minus 910.33 T: 40.16 PP: 25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 + K2 + K4: 1,947.29 T1: 792.07 K1P + K2P + K4P: 913.93 T2: 371.74 M1: minus 133.74 (T1 + T2 minus M1) divided by S1: 990.64 M: minus 950.49 T: 40.15 PP: 26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 + K2 + K4: 1,947.32 T1: 792.43 K1P + K2P + K4P: 913.94 T2: 371.92 M1: minus 133.54 (T1 + T2 minus M1) divided by S1: 1,030.81 M: minus 990.64 T: 40.17 Total tax deducted for the year on regular salary $1,030.81 Total tax deducted for the year on non-periodic payments 133.54 Total tax deducted for the year on salary and non-periodic payments $1,164.35 * Note Tax on the non-periodic payment is T1 + T2 amounts determined at line 4B, less T1 + T2 amounts determined at line 4. For other similar payments, such as lump-sum payments, the same principle will apply. The non-periodic payment tax calculation for pay period 14 has been used to determine the steps to follow. For more details, see the example that begins on page 62. YTD = year-to-date PAGE 79 Option 2 - Examples when calculating the tax deductions on salary and non- periodic payments separately (continued) Outside Canada or in Canada beyond the limits of any province PP: 1 Salary: 740 I YTD: 740 A: 19,240.00 K1 + K2 + K4: 1,957.23 T3: 928.77 Add'l Tax: 445.81 T1: 1,374.58 (T1 minus M1) divided by S1: 52.87 T: 52.87 PP: 2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 + K2 + K4: 1,957.23 T3: 928.77 Add'l Tax: 445.81 T1: 1,374.58 (T1 minus M1) divided by S1: 105.74 M: minus 52.87 T: 52.87 PP: 3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 + K2 + K4: 1,957.23 T3: 928.77 Add'l Tax: 445.81 T1: 1,374.58 (T1 minus M1) divided by S1: 158.61 M: minus 105.74 T: 52.87 PP: 4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 + K2 + K4: 1,957.23 T3: 928.77 Add'l Tax: 445.81 T1: 1,374.58 (T1 minus M1) divided by S1: 211.47 M: minus 158.61 T: 52.86 PP: 4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1 + K2 + K4: 1,958.25 T3: 942.75 Add'l Tax: 452.52 T1: 1,395.27 (T1 minus M1) divided by S1: see* M: minus 211.47 TB: 20.69 PP: 5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 + K2 + K4: 1,955.08 T3: 899.12 Add'l Tax: 431.58 T1: 1,330.70 M1: minus 20.69 (T1 minus M1) divided by S1: 251.93 M: minus 211.47 T: 40.46 PP: 6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 + K2 + K4: 1,945.47 T3: 767.03 Add'l Tax: 368.17 T1: 1,135.20 M1: minus 20.69 (T1 minus M1) divided by S1: 257.19 M: minus 251.93 T: 5.26 PP: 7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 + K2 + K4: 1,945.03 T3: 760.97 Add'l Tax: 365.27 T1: 1,126.24 M1: minus 20.69 (T1 minus M1) divided by S1: 297.65 M: minus 257.19 T: 40.46 PP: 7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1 + K2 + K4: 1,945.54 T3: 767.96 Add'l Tax: 368.62 T1: 1,136.58 M1: minus 20.69 (T1 minus M1) divided by S1: see* M: minus 297.65 TB: 10.34 PP: 8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 + K2 + K4: 1,945.21 T3: 763.42 Add'l Tax: 366.44 T1: 1,129.86 M1: minus 31.03 (T1 minus M1) divided by S1: 338.10 M: minus 297.65 T: 40.45 PP: 9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 + K2 + K4: 1,944.95 T3: 759.88 Add'l Tax: 364.74 T1: 1,124.62 M1: minus 31.03 (T1 minus M1) divided by S1: 378.55 M: minus 338.10 T: 40.45 PP: 10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 + K2 + K4: 1,944.74 T3: 757.06 Add'l Tax: 363.39 T1: 1,120.45 M1: minus 31.03 (T1 minus M1) divided by S1: 419.01 M: minus 378.55 T: 40.46 PP: 11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1 + K2 + K4: 1,944.58 T3: 754.74 Add'l Tax: 362.28 T1: 1,117.02 M1: minus 31.03 (T1 minus M1) divided by S1: 459.46 M: minus 419.01 T: 40.45 PP: 12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 + K2 + K4: 1,940.14 T3: 693.74 Add'l Tax: 333.00 T1: 1,026.74 M1: minus 31.03 (T1 minus M1) divided by S1: 459.56 M: minus 459.46 T: 0.10 PP: 13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 + K2 + K4: 1,940.35 T3: 696.65 Add'l Tax: 334.39 T1: 1,031.04 M1: minus 31.03 (T1 minus M1) divided by S1: 500.01 M: minus 459.56 T: 40.45 PP: 14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 + K2 + K4: 1,941.66 T3: 714.73 Add'l Tax: 343.07 T1: 1,057.80 M1: minus 31.03 (T1 minus M1) divided by S1: 552.88 M: minus 500.01 T: 52.87 PP: 14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1 + K2 + K4: 1,1,946.75 T3: 784.64 Add'l Tax: 376.63 T1: 1,161.27 M1: minus 31.03 (T1 minus M1) divided by S1: see* M: minus 552.88 TB: 103.47 PP: 15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 + K2 + K4: 1,946.84 T3: 785.76 Add'l Tax: 377.16 T1: 1,162.92 M1: minus 134.50 (T1 minus M1) divided by S1: 593.32 M: minus 552.88 T: 40.44 PP: 16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 + K2 + K4: 1,946.91 T3: 786.75 Add'l Tax: 377.64 T1: 1,164.39 M1: minus 134.50 (T1 minus M1) divided by S1: 633.78 M: minus 593.32 T: 40.46 PP: 17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 + K2 + K4: 1,946.96 T3: 787.63 Add'l Tax: 378.06 T1: 1,165.69 M1: minus 134.50 (T1 minus M1) divided by S1: 674.24 M: minus 633.78 T: 40.46 PP: 18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 + K2 + K4: 1,947.03 T3: 788.39 Add'l Tax: 378.43 T1: 1,166.82 M1: minus 134.50 (T1 minus M1) divided by S1: 714.68 M: minus 674.24 T: 40.44 PP: 19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 + K2 + K4: 1,947.07 T3: 789.09 Add'l Tax: 378.76 T1: 1,167.85 M1: minus 134.50 (T1 minus M1) divided by S1: 755.14 M: minus 714.68 T: 40.46 PP: 20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 + K2 + K4: 1,947.12 T3: 789.71 Add'l Tax: 379.06 T1: 1,168.77 M1: minus 134.50 (T1 minus M1) divided by S1: 795.59 M: minus 755.14 T: 40.45 PP: 21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 + K2 + K4: 1,947.17 T3: 790.26 Add'l Tax: 379.32 T1: 1,169.58 M1: minus 134.50 (T1 minus M1) divided by S1: 836.03 M: minus 795.59 T: 40.44 PP: 22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 + K2 + K4: 1,947.19 T3: 790.79 Add'l Tax: 379.58 T1: 1,170.37 M1: minus 134.50 (T1 minus M1) divided by S1: 876.51 M: minus 836.03 T: 40.48 PP: 23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 + K2 + K4: 1,947.23 T3: 791.25 Add'l Tax: 379.80 T1: 1,171.05 M1: minus 134.50 (T1 minus M1) divided by S1: 916.95 M: minus 876.51 T: 40.44 PP: 24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 + K2 + K4: 1,947.26 T3: 791.68 Add'l Tax: 380.01 T1: 1,171.69 M1: minus 134.50 (T1 minus M1) divided by S1: 957.41 M: minus 916.95 T: 40.46 PP: 25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 + K2 + K4: 1,947.29 T3: 792.07 Add'l Tax: 380.19 T1: 1,172.26 M1: minus 134.50 (T1 minus M1) divided by S1: 997.85 M: minus 957.41 T: 40.44 PP: 26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 + K2 + K4: 1,947.32 T3: 792.43 Add'l Tax: 380.37 T1: 1,172.80 M1: minus 134.50 (T1 minus M1) divided by S1: 1,038.30 M: minus 997.85 T: 40.45 Total tax deducted for the year on regular salary $1,038.30 Total tax deducted for the year on non-periodic payments 134.50 Total tax deducted for the year on salary and non-periodic payments $1,172.80 * Note Tax on the non-periodic payment is T1 + T2 amounts determined at line 4B, less T1 + T2 amounts determined at line 4. For other similar payments, such as lump-sum payments, the same principle will apply. The non-periodic payment tax calculation for pay period 14 has been used to determine the steps to follow. For more details, see the example that begins on page 62. YTD = year-to-date PAGE 80 Part B - Canada Pension Plan (CPP) Employee and employer CPP contributions for 2012 For 2012, the Canada Pension Plan (CPP) maximum pensionable earnings are $50,100, and the basic exemption for the year is $3,500. The contribution rate for employees is 4.95%. In Quebec, the contribution rate is 5.025%, for the Quebec Pension Plan (QPP). An employee's maximum contribution for the year is $2,306.70 and in Quebec it is $2,341.65. The employer's contribution is an amount equal to the total of the employee's contribution. For insurance companies that need the year's maximum pensionable earnings before rounding, the amount for 2012 is $50,168.60. Each employer needs to deduct CPP contributions based on the employee's pensionable income, without regard to any other earnings the employee may have had with another employer in the same year. Accordingly, you must use the maximums above even if the employee works for you less than 12 months. Similarly, you are not entitled to a refund of the employer's share of CPP if the employee works for you less than 12 months. For payments where the employee receives a bonus, retroactive pay increase, accumulated overtime pay, or a director's fee, and the payment is not included with the remuneration for the current pay period, you should introduce a code with the record. You do this to avoid allowing the basic exemption for the pay period ($3,500/P) in the formula described below. The basic exemption has already been allowed with the regular pay. You can determine how much to deduct for the required contribution "C" by referring to the amount of contributions for the year-to-date and the maximum contribution required for the year, based on the following formula: Formula to determine CPP contributions for employees receiving salary or wages C = The lesser of: \\ (i) $2,306.70* minus D; and (ii) 0.0495** multiplied by [PI minus ($3,500 divided by P)] If the result is negative, C = $0. * Use $2,341.65 for employees employed in Quebec. ** Use 0.05025 for employees in Quebec. \\ Formula to determine CPP contributions-only for employees remunerated by commission C = The lesser of: \\ (i) $2,306.70* minus D; and (ii) 0.0495** multiplied by [G minus ($3,500 multiplied by N divided by 365, minimum $67.30)]. If the result is negative, C = $0. * Use $2,341.65 for employees in Quebec. ** Use 0.05025 for employees in Quebec. \\ Note For both formulas, round the resulting amount to the nearest $0.01. The maximum amount for the year [amount (i) above] will vary subject to the rules in the section called "Special CPP Situations" on page 81. Where: C = Canada Pension Plan contribution (deduction) for the pay period D = Year-to-date CPP contribution (deduction) with the employer. This amount cannot be greater than the annual maximum. PI = Pensionable income for the pay period, or the gross income plus any taxable benefits for the pay period, including bonuses and retroactive pay increases that apply. For more information about income subject to Canada Pension Plan contributions, see the employers' guide called Payroll Deductions and Remittances. PAGE 81 P = The number of pay periods in the year G = Gross commission amount including gross salary at the time of payment, plus any taxable benefits for commission-remunerated employees. Commission payments are the commissions included in the estimated annual amount reported by the employee on Form TD1X. N = The number of days since the last commission payment. The minimum basic exemption amount of $67.30 is included in the formula to conform with CPP legislation. Notes For pay periods other than weekly pay periods, the basic exemption amount ($3,500/P) used to determine the employee's contributions for the pay period has to stay the same throughout the year, regardless of whether or not an employee has worked in each week of your pay period. Also, the employer should determine the number of pay periods at the start of the year (for example, for weekly, 52 or 53 pay periods may apply, and, for biweekly, 26 or 27 pay periods may apply.) This is to make sure that you have deducted employee contributions properly. Special CPP situations You will have to either start or stop deducting CPP contributions under the following circumstances: Your employee turns 18 - Start deducting CPP contributions for the first pay dated in the month after the employee turns 18. Your employee turns 70 - Deduct CPP contributions up to and including the last pay dated in the month in which the employee turns 70. Your employee has received a CPP retirement pension award letter from Human Resources and Skills Development Canada - For details, see the employers' guide called Payroll Deductions and Remittances. Your employee is considered to be disabled under the CPP - Deduct CPP contributions up to and including the last pay dated in the month in which the employee is considered to be disabled. Note If the employee is no longer considered disabled under the CPP, start deducting CPP contributions in the first pay dated in the month after the employee stops being considered disabled. Your employee dies in the year - Deduct CPP contributions up to and including the last pay dated in the month in which the employee dies. In some cases, the requirements are different for the Quebec Pension Plan (QPP). For information, see Publication TP-1015.G-V, Guide for Employers: Source Deductions and Contributions, which you can get from Revenu Québec. Note If any of these special situations apply to your employees, you may need to prorate their contributions for the year. For more information, go to www.cra-arc.gc.ca/payroll, and select "General information" under the Canada Pension Plan listing in the Payroll Alphabetical Index. \\ Changes to the rules for deducting Canada Pension Plan (CPP) contributions On January 1, 2012, changes to the rules for deducting CPP contributions will come into effect. Go to: http://www.cra- arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/cpp-rpc/cppchng-eng.html \\ PAGE 82 Year-end calculation of deductions for an employee's CPP contributions \\\ The following year-end calculation will help you verify an employee's CPP contributions before you complete and file a T4 slip for the employee. This optional calculation is the only one we authorize. However, it does not apply to employees who have earnings listed in section B below and who earned more than the annual maximum pensionable earnings. For these employees, prorate the maximum contribution for the year. We based the calculation on information contained in the employers' guide called Payroll Deductions and Remittances and in Part B of this publication. You can get the information you need to complete this calculation from each employee's payroll master file. Using this calculation will help you avoid the possibility of receiving a pensionable and insurable earnings review (PIER) statement. To verify the CPP deduction, follow these steps: Line 1: A. Enter the salary and wages from the employee's payroll master file that you will include in box 14 of the T4 slip, "Employment income" $^ B From line 1, subtract the following earnings of the employee: - the amount the employee received before, and including the month, the employee reached age 18 $^ - the amount the employee received after the month the employee reached age 70 $^ - the amount the employee received during and after the month the employee began to receive CPP payments $^ - the amount the employee received during the months the employee was considered to be disabled under the CPP or QPP $^ - the amount received after the month the employee died $^ - any excluded income, benefits, or payments as identified in Chapter 3 of the employers' guide called Payroll Deductions and Remittances $^ Line 2: Total earnings not subject to CPP contributions $^ Line 3: C. Pensionable earnings for the period of employment, line 1 minus line 2 $^ Note If you have entered an amount on line 2, enter the amount on line 3 in box 26, "Pensionable earnings," on the T4 slip. D. Enter the basic exemption for the pay period (see the table on the next page). $^ Multiply by the number of pay periods of pensionable earnings (related to the amount on line 3). Make sure not to include pay periods that apply to the earnings listed in section B above, ^ Line 4: Prorated basic exemption that applies to the period of pensionable employment (the amount cannot be more than the maximum basic yearly exemption amount shown in the table on the next page) $^ Line 5: E. CPP contributory earnings for the period of pensionable employment, line 3 minus line 4 $^ Line 6: F. Enter the CPP contribution rate for the year ^ Line 7: G. Employee's required CPP contribution for the period of pensionable employment, (line 5 multiplied by the rate on line 6) $^ Line 8: H. Enter the CPP contributions that you have deducted for the period of pensionable employment shown in the employee's payroll master file $^ Line 9: I. Line 7 minus line 8. The result should be zero $^ If there is an amount on line 9 and it is positive, you have under-deducted. If this is the case, add lines 8 and 9 and include the total in box 16, "Employee's CPP contributions," on the T4 slip. If the amount on line 9 is negative, you have over-deducted. If this is the case, verify the employee's master file to make sure that the amounts on lines 1 and 3 are correct. For information on refunding CPP overpayments, see chapter 2 of the employers' guide called Payroll Deductions and Remittances. \\\ PAGE 83 Employee's CPP basic exemption for various pay periods for 2012 \\\ Pay period and Basic exemption: Annually (1) $3,500.00 Semi-annually (2) 1,750.00 Quarterly (4) 875.00 Monthly (12) 291.66 Semi-monthly (24) 145.83 Bi-weekly (26) 134.61 Bi-weekly (27) 129.62 Weekly (52) 67.30 Weekly (53) 66.03 22 pay periods 159.09 13 pay periods 269.23 10 pay periods 350.00 Daily (240) 14.58 Hourly (2000) 1.75 \\\ Part C - Employment insurance (EI) Employee and employer EI premiums for 2012 \\ For 2012, the maximum annual insurable earnings are $45,900 and the premium rate is 1.83%, for a maximum annual premium of $839.97 for all of Canada, except Quebec. In Quebec the premium rate is 1.47%, for a maximum annual premium of $674.73. \\ As an employer, your contribution is 1.4 times the amount of the employee's premiums for the pay period. However, if you have a wage-loss replacement plan, you can ask to have your contribution rate reduced. If you need more information about the employer's reduced EI premiums, contact: Premium Reduction Program Service Canada 120 Harbourview Boulevard Postal Office Box 11000 Bathurst NB E2A 4T5 Telephone: 1-800-561-7923 Fax: 1-506-548-7473 We no longer use the concept of minimum or maximum insurable earnings or hours for a pay period. You withhold EI premiums from each dollar of insurable earnings up to the yearly maximum. After you have deducted the maximum for the year, do not deduct any more premiums. You need to deduct EI premiums based on the employee's insurable earnings, without regard to any other insurable earnings that the employee may have had with another employer in the same year. Similarly, you are not entitled to a refund of premiums if the employee leaves your employment during the year. Employees who earn $2,000 or less in a year can claim a refund on their income tax and benefit returns for all the EI premiums they paid. However, you cannot reduce or refund premiums on this basis, nor are you entitled to a refund for such employees. To complete Service Canada's Record of Employment (ROE) form, you need to determine hours of employment. If the income is not directly related to hours, the earnings are insurable and subject to withholding, while the hours are not considered to be insurable hours. For help and instructions on completing a record of employment form, consult Service Canada. PAGE 84 There is no age limit for contributing to employment insurance. For more information on employment insurance withholding, see the employers' guide called Payroll Deductions and Remittances. Formula to calculate EI premiums for 2012 The formula below will allow computer users to determine, in their payroll calculations, the premium payable by an insured person under the Employment Insurance Act. The formula is: \\ EI = the lesser of: (i) $839.97 minus D1; and (ii) 0.0183 multiplied by IE. \\ Only for employees in Quebec: \\ EI = the lesser of (i) $674.73 minus D1; and (ii) 0.0147 multiplied by IE.* * Round the resulting amount(s) in (ii) to the nearest $0.01. Note When an employee changes province of employment with the same employer during the year, the maximum premium for the year is based on the province where the first $45,900 of insurable earnings is paid. Example: An employee makes $30,000 of insurable earnings in Ontario, changes his province of employment to Quebec, and makes an extra $40,000 with the same employer. The employee's maximum premium is calculated as follows: In Ontario: $30,000 multiplied by 1.83% = $549.00 In Quebec: $15,900 multiplied by 1.47% = $233.73 Total: ($30,000 +15,900) = $45,900 Total: ($549.00 + 233.73) = $782.73 The Canada Revenue Agency and Revenu Québec will reconcile adjustments to EI and QPIP premiums for transborder employees. Adjustments between EI and QPIP deductions will be resolved through the filing of the income tax and benefit return and an annual year-end adjustment process. \\ Where: EI = Employee's employment insurance premium deduction for the pay period D1 = Employee's year-to-date employment insurance premium with the employer (D1 cannot be more than the maximum annual premium) IE = Insurable earnings for the pay period including insurable taxable benefits, bonuses, and retroactive pay increases PAGE 85 Year-end calculation of deductions for employee's employment insurance premiums \\\ The following year-end calculation will help you verify an employee's employment insurance (EI) premiums before you complete and file the T4 slips. This optional calculation is the only one we authorize. We have based the calculation on information contained in the employers' guide called Payroll Deductions and Remittances and in Part C of this publication. You can get the information you need to complete this calculation from each employee's payroll master file. The purpose of this calculation is to help you avoid the possibility of receiving a pensionable and insurable earnings review (PIER) statement. To verify the EI deduction, follow these steps: Line 1: A. Enter the insurable earnings for the year as indicated in each employee's payroll master file for the period of insurable employment. If the insurable earnings are less than the maximum and different from the gross income (box 14) reported on the T4 slip, report the amount on the T4 slip in box 24, "EI insurable earnings." The amount should not be more than the annual maximum insurable earnings for the year $ ^ Line 2: B. Enter the employee's EI premium rate for the year ^ Line 3: C. Multiply line 1 by line 2 to calculate the employee's EI premiums payable for the year. The amount should not be more than the maximum EI premium for the year $^ Line 4: D. Enter the employee's EI premium deduction for the period of insurable employment as indicated in the employee's payroll master file ^ Line 5: E. Subtract line 4 from line 3. The result should be zero $^ If the amount on line 5 results in a difference, and it is positive, you have to make an adjustment. Add lines 4 and 5, and include the total in box 18, "Employee's EI premiums," on the T4 slip. If the amount on line 5 is negative, you have over-deducted. If this is the case, verify the employee's master file to make sure that the amount on line 1 is correct. For information on refunding EI overpayments, see the employers' guide called Payroll Deductions and Remittances. \\\ PAGE 86 Part D - Summary sheet You can use this sheet as a quick summary for inputting the new figures into your programs. There is nothing new presented here. If you have questions about the amounts below, please consult the appropriate sections in this guide for detailed explanations. *** Transcriber's Note: In print the following table is set-up as 11 columns, labelled as: Column 1: Provinces; Tax Bracket Rates: column 2: Fist; Column 3 Second; Column 4: Third; Column 5: Fourth; Column 6: fifth; Column 7: Basic Amount; Column: 8: Spouse Amount; column 9: Child Amount; Column 10: Index Rate; Column 11: CEC. Columns without information will not be indicated. Please read as: *** \\\ Federal Tax Bracket Rates First: 0.15 Second: 0.22 Third: 0.26 Fourth: 0.29 Basic amount: 10,822 Spouse amount: 10,822 Child amount: 2,191 Index Rate: 2.8% CEC: 1,095 Alta. Tax Bracket Rates First: 0.10 Basic amount: 17,282 Spouse amount: 17,282 Index Rate: 1.8% B.C. Tax Bracket Rates First: 0.0506 Second: 0.077 Third: 0.105 Fourth: 0.1229 Fifth: 0.147 Basic amount: 11,354 Spouse amount: 9,964 Index Rate: 2.4% Man. Tax Bracket Rates First: 0.108 Second: 0.1275 Third: 0.174 Basic amount: 8,634 Spouse amount: 8,634 N.B. Tax Bracket Rates First: 0.091 Second: 0.121 Third: 0.124 Fourth: 0.143 Basic amount: 9,203 Spouse amount: 7,815 Index Rate: 2.8% Nfld. Tax Bracket Rates First: 0.077 Second: 0.125 Third: 0.133 Basic amount: 8,237 Spouse amount: 6,731 Index Rate: 3.1% N.W.T. Tax Bracket Rates First: 0.059 Second: 0.086 Third: 0.122 Fourth: 0.1405 Basic amount: 13,280 Spouse amount: 13,280 Index Rate: 2.8% N.S. Tax Bracket Rates First: 0.0879 Second: 0.1495 Third: 0.1667 Fourth: 0.175 Fifth: 0.21 Basic amount: 8,481 Spouse amount: 7,201 Nun. Tax Bracket Rates First: 0.04 Second: 0.07 Third: 0.09 Fourth: 0.115 Basic amount: 12,211 Spouse amount: 12,211 Index Rate: 2.8% Ont. Tax Bracket Rates First: 0.0505 Second: 0.0915 Third: 0.1116 Basic amount: 9,405 Spouse amount: 7,986 Index Rate: 3.3% P.E.I. Tax Bracket Rates First: 0.098 Second: 0.138 Third: 0.167 Basic amount: 7,708 Spouse amount: 6,546 *Que. Quebec Abatement is 16.5% Sask. Tax Bracket Rates First: 0.11 Second: 0.13 Third: 0.15 Basic amount: 14,942 Spouse amount: 14,942 Child amount: 5,668 Index Rate: 2.8% Yk. Tax Bracket Rates First: 0.0704 Second: 0.0968 Third: 0.1144 Fourth: 0.1276 Basic amount: 10,822 Spouse amount: 10,822 Child amount: 2,191 Index Rate: 2.8% CEC: 1,095 Outside Canada: Outside Canada surtax rate is 48% \\\ *** Transcriber's Note: In print the following table is set-up as 11 columns, labelled as: Column 1: Provinces; Tax Bracket Income Thresholds: column 2: Fist; Column 3 Second; Column 4: Third; Column 5: Fourth; Column 6: fifth; Column 7: V1 Rate; Column: 8: V1 Amount; column 9: LCP Rate; Column 10: LCP Amount; Column 11: S. Columns without information will not be indicated. Please read as: *** \\\ Federal Tax Bracket Income Thresholds First: 0 Second: 42,707 Third: 85,414 Fourth: 132,406 LCP Rate: 0.15 LCP amount: 750 Alta.: Columns without information BC Tax Bracket Income Thresholds First: 0 Second: 37,013 Third: 74,028 Fourth: 84,993 Fifth: 103,205 LCP Rate: 0.15 LCP amount: 2,000 S: 403 Man. Tax Bracket Income Thresholds First: 0 Second: 31,000 Third: 67,000 LCP Rate: 0.15 LCP amount: 1,800 N.B. Tax Bracket Income Thresholds First: 0 Second: 38,190 Third: 76,380 Fourth: 124,178 LCP Rate: 0.20 LCP amount: 2,000 N.L. Tax Bracket Income Thresholds First: 0 Second: 32,893 Third: 65,785 LCP Rate: 0.20 LCP amount: 2,000 N.W.T. Tax Bracket Income Thresholds First: 0 Second: 38,679 Third: 77,360 Fourth: 125,771 N.S. Tax Bracket Income Thresholds First: 0 Second: 29,590 Third: 59,180 Fourth: 93,000 Fifth: 150,000 LCP Rate: 0.20 LCP amount: 2,000 Nun. Tax Bracket Income Thresholds First: 0 Second: 40,721 Third: 81,442 Fourth: 132,406 Ont. Tax Bracket Income Thresholds First: 0 Second: 39,020 Third: 78,043 V1 Rate: 0.2 & 0.36 V1 amount: 4,213 & 5,392 S: 217 P.E.I. Tax Bracket Income Thresholds First: 0 Second: 31,984 Third: 63,969 V1 Rate: 0.1 V1 amount: 12,500 *Que. Quebec Abatement is 16.5% Sask. Tax Bracket Income Thresholds First: 0 Second: 42,065 Third: 120,185 LCP Rate: 0.20 LCP amount: 1,000 Yk. Tax Bracket Income Thresholds First: 0 Second: 42,707 Third: 85,414 Fourth: 132,406 V1 Rate: 0.05 V1 Amt: 6,000 LCP Rate: 0.25 LCP amount: 1,250 Outside Canada: Outside Canada surtax rate is 48% \\\ * Note: Quebec calculates its own amounts, so that province is not included here.