Which provincial or territorial tax tables should you use?

Employment income

When you pay employment income such as salaries, wages, or commissions, you have to determine your employee’s province or territory of employment so you can withhold the proper deductions. This depends on whether your employee physically reports for work at your establishment or "place of business".

For income tax, CPP and EI withholding purposes, an "establishment of the employer" is any place or premises in Canada that is owned, leased or rented by you and where one or more employees report to work or from which one or more employees are paid.

This does not have to be a permanent physical location. For example, the place of business for a construction company can be one or more construction sites or the place of business for a carnival can include a shopping mall parking lot. In these examples, the employee’s province or territory of employment would be the one in which the field office or shopping mall is located.

Employee reports to your establishment

If your employee reports to your establishment in person, the employee’s province or territory of employment is the one in which it is located. There is no minimum amount of time the employee has to report to that place.

Example 1

Your head office is in Ontario, but you require your employee to report to your place of business in Manitoba. In this case, use the Manitoba Payroll Deductions Tables.

Example 2

Your employee lives in Quebec, but you require your employee to report to your place of business in New Brunswick. In this case, use the New Brunswick Payroll Deductions Tables.

Example 3

Your employee works from a home office in Alberta, but occasionally has to report to your Alberta office. You pay your employee from your head office in Ontario. Use the Alberta Payroll Deductions Tables since the employee sometimes reports to your Alberta office.

Employee does not report to your establishment

If your employee does not have to report to your establishment in person (for example, the employment contract says the employee works from a home office), the employee’s province or territory of employment is the one from where your employee’s salary and wages are paid. This will normally be the location of your payroll department or payroll records.

Example 4

Your employee does not have to report to any of your places of business, but you pay the employee from your office in Quebec. In this case, use the Quebec Payroll Deductions Tables. The employee does not have to pay CPP contributions, but may have to pay Quebec Pension Plan (QPP) contributions.

No establishment in Canada

If your employees working in Canada but you do not have a place of business or an employer’s establishment in Canada, use the Payroll Deductions Tables for In Canada beyond the limits of any province/territory or outside Canada when deducting income tax at source.

Example 5

Your Canadian resident employees work as salespeople in Ontario and British Columbia. They work from their home offices and report directly to your business located outside Canada. In this case, use the Payroll Deductions Tables for In Canada beyond the limits of any province/territory or outside Canada.

Special situations

a) If an employee reports to your place of business for part of a pay period in one province or territory and part in another, use the tables for where the employee spent the most time.

b) An employee who lives in one province or territory but reports to your place of business in another might have too much tax deducted. If so, he or she can ask you to reduce tax deductions by getting a letter of authority from any tax services office. For more information, go to Letter of authority.

The opposite could also occur: an employee may not have enough tax deducted. In these situations, the employee should request additional tax deductions at source. Go to Increasing income tax deductions.

Non-employment income

If you pay amounts other than employment income, such as pension income, retiring allowance, or RRSP, use the provincial or territorial table of the recipient's province or territory of residence.

For more information on which tax table to use, see Appendix 1 of Guide T4001 - Employers' Guide - Payroll Deductions and Remittances.

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