Employees paid by commission
If an employee is paid on commission or receives a salary plus commission, you can deduct tax in one of the following ways:
Employees who earn commissions without expenses
If you pay commissions at the same time you pay salary, add this amount to the salary, then use the Payroll Deductions Online Calculator, the computer formulas (T4127), or the manual calculation method.
If you pay commissions periodically or the amounts fluctuate, you may want to use the bonus method to determine the tax to deduct from the commission payment.
Employees who earn commissions with expenses
Employees who are paid in whole or in part by commission and who claim expenses may choose to fill out a Form TD1X, Statement of Commission Income and Expenses for Payroll Tax Deductions in addition to Form TD1. To calculate the amount of tax to deduct, you can use the Payroll Deductions Online Calculator, the computer formulas (T4127), or the manual calculation method.
Employees who claim employment expenses on their income tax and benefit return must have their employer complete Form T2200, Declaration of Conditions of Employment.
An employee may choose, at any time during the year, to revoke in writing the election he or she made. Use the total claim amount from the employee's Form TD1 instead.
Forms and publications
- Form TD1X, Statement of Commission Income and Expenses for Payroll Tax Déductions
- Form T2200, Declaration of Conditions of Employment
If you are unable to find the information you were looking for about this specific topic, please select the Contact us button.
- Date modified: