*** 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 Eighty-Seventh Edition Ninety-first Edition Effective January 1, 2010 T4127(E) Revision 10 PAGE 2 Distribution of this publication The printing of this guide has been discontinued. This decision reflected minimal requests in recent years for a printed guide in favour of the electronic version. It also has resulted in cost savings and benefits to the environment. The T4127 will still be available on our website at which time you may print the document or download it to your personal computer. Payroll deductions information is available on the Canada Revenue Agency (CRA) Web site at www.cra.gc.ca/payroll. Electronic mailing lists - More ways to serve you! If your business has access to the Internet, the CRA can now notify you immediately of any changes. To get quick and easy access to the CRA's latest information and new publications including changes to payroll deductions, you can subscribe free of charge to any of the electronic mailing lists. The CRA will add more electronic mailing lists to its Web site in the future. To subscribe, visit the CRA web site at www.cra.gc.ca/lists. The CRA will send a reply asking you to confirm the enrolment of your business. Once you have subscribed, 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. 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's new for January 1, 2010?, page 5 Tax measures for 2010, page 5 Federal changes included in this edition, page 5 Indexing for 2010, page 5 Federal tax rates and income thresholds, page 6 Federal personal amounts for 2010, page 6 Canada Employment Credit for 2010, page 6 Federal labour-sponsored funds tax credit for 2010, page 7 Federal surtax for income not earned in a province or territory, page 7 Tax relief for Canadian Forces and police, page 7 Canada Pension Plan (CPP) for 2010, page 7 Employment Insurance (EI) for 2010, page 7 Provincial and territorial tax changes effective January 1, 2010, 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 10 6. Northwest Territories, page 10 7. Nova Scotia, page 11 8. Nunavut, page 11 9. Ontario, page 11 10. Prince Edward Island, page 13 11. Quebec, page 13 12. Saskatchewan, page 13 13. Yukon, page 14 Personal tax credits return (TD1 forms), page 15 Federal Form TD1, 2010 Personal Tax Credits Return, page 15 Indexing of personal amounts, page 15 Provincial and territorial TD1 forms, page 15 Claim codes, page 16 Basic personal amounts and employment income from all sources, page 16 Federal, provincial, and territorial claim codes, page 16 Tax deductions from commission income, page 21 Form TD1X, Statement of Commission Income and Expenses for Payroll Tax Deductions, page 21 Remitting and reporting federal and provincial or territorial tax deductions, page 21 Payroll remittances (Form PD7A, Statement of Account for Current Source Deductions), page 21 Pay statements and T4 slips, Statement of Remuneration Paid, page 21 Letters of authority, page 21 General information, page 22 Rounding procedures, page 22 Mathematical symbol definition, page 22 Tax deductions comparison, page 22 Validating the Business Number (BN), page 25 Part A - Formulas to determine tax deductions on salary, wages, taxable benefits, pension income, commissions, and other non-periodic payments, page 25 Option 1 - General tax formula, page 25 Outline of Option 1, page 25 Glossary, page 26 PAGE 4 Formula to calculate annual taxable income (A), page 27 Formula to calculate basic federal tax (T3), page 29 Formula to calculate the annual federal tax payable (T1), page 31 Tax calculation formula for bonuses, retroactive pay increases, or other non- periodic payments, page 32 Formula to calculate annual basic provincial or territorial tax (T4), page 34 Formulas to calculate annual provincial or territorial tax deduction (T2), page 34 Formula to calculate the tax deductions (T) for the pay period, page 45 Option 1 - Tax calculation examples for periodic payments, page 46 - Example - Assumptions and federal calculation, page 46 - Testing Results - Example, page 56 - Example for employees remunerated by commission only, page 57 - Example for employees in the hotel and restaurant business in Quebec, page 59 Option 2 - Tax formula based on cumulative averaging, page 61 - Calculation of income, page 61 - Calculation of tax for the pay period, page 61 - Special situations, page 61 - Formula to calculate annual taxable income (A), page 62 - Formula to calculate basic federal tax (T3), page 63 - Formula to calculate the federal tax payable (T1), page 64 - Formula to calculate provincial and territorial tax payable (T2), page 65 - Formula to calculate tax deductions (T) for the pay period, page 65 Option 2 - Step-by-step example when calculating tax deductions separately on periodic and non-periodic payments, page 66 - Step 1 - Calculation of annual tax on year to date income including B1 and B, page 66 - Step 2 - Calculation of annual tax on year to date income including B1 only, page 67 - Step 3 - Calculation of tax deduction on current periodic payment (T), page 68 - Step 4 - Calculation of tax deduction on current bonus, payment (TB), page 68 Option 2 - Examples when calculating the tax deductions on salary and non- periodic payments separately, page 69 Part B - Canada Pension Plan (CPP), page 84 Employee and employer CPP contributions for 2010, page 84 Formula to determine CPP contributions for employees receiving salary or wages, page 84 Formula to determine CPP contributions for employees remunerated by commission only, page 84 Year-end calculation of deductions for employee's Canada Pension Plan (CPP) contributions, page 86 Employee's CPP basic exemption for various pay periods for 2010, page 87 Part C - Employment Insurance (EI), page 88 Employee and employer EI premiums for 2010, page 88 Formula to calculate the EI premiums for 2010, page 88 Year-end calculation of deductions for employee's Employment Insurance premiums, page 89 Part D - Summary Sheet, page 90 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 allow you to 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 required because of changes to income tax rates, personal tax credits, Canada Pension Plan pensionable earnings, contributions, or rate, or to Employment Insurance 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 any questions about the formulas contained 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. Employers who have an establishment in the province of Quebec When we refer to the annual provincial or territorial tax deduction, factor (T2) in this publication, this item does not apply to the province of Quebec. Quebec administers its own provincial income tax and Quebec Pension Plan contributions. If you have any questions about the formulas for Quebec, contact the Ministère du Revenu du Québec, at the following address: Ministère du Revenu du Québec 3800 Marly Street Ste-Foy QC G1X 4A5 Telephone: 1-800-567-4692 Outside Canada: 1-418-659-4692 What's new for January 1, 2010? \\ The information contained in this ninety first edition publication is effective January 1, 2010. It replaces the ninetieth edition of the Payroll Deductions Formulas for Computer Programs. Significant changes to the formulas and text in this publication appear with a shaded background. \\ Tax measures for 2010 This publication reflects some income tax changes recently announced which, if enacted by the applicable legislature as proposed, would be effective January 1, 2010. 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, commencing with your first payroll in 2010. Federal changes included in this edition Indexing for 2010 \\ The income tax thresholds and many of the personal amounts on the federal Form TD1, Personal Tax Credits Return, are indexed for 2010. Indexing means that these values are adjusted based on changes to the Consumer Price Index (CPI) factor. The federal indexing factor for 2010 is 0.6%. To calculate the indexed income thresholds and personal amounts for 2010, multiply the appropriate federal amounts by 1.006. For more information on indexing, see page 15. \\ PAGE 6 Federal tax rates and income thresholds Effective January 1, 2010, the federal tax rates are not changed. The income thresholds are revised as follows: \\ - 15% on income less than or equal to $40,970 (formerly $41,200); - 22% on income greater than $40,970, but less than or equal to $81,941 (formerly $82,399); - 26% on income greater than $81,941, but less than or equal to $127,021 (formerly $126,264); and - 29% on income greater than $127,021 (formerly $126,264). \\ The lowest tax rate used to calculate the federal non-refundable tax credits (factors K1, K2 and K4) remains unchanged at 15%. \\\ \\ 2010 federal tax rates and income thresholds Annual taxable income A: More than $0 - Not more than $40,970 Rate R: 0.15 Constant K: $0 More than 40,970 - Not more than 81,941 Rate R: 0.22 Constant K: 2,868 More than 81,941 - Not more than 127,021 Rate R: 0.26 Constant K: 6,146 More than 127,021 and over Rate R: 0.29 Constant K: 9,956 \\\ \\ Federal personal amounts for 2010 \\ For 2010, some federal personal amounts are increased due to federal indexing. The 2010 federal indexing factor is 0.6%. Review the federal Form TD1 for complete information on all personal amounts for 2010. Basic personal amount $10,382 Child Amount 2,101 Age amount 6,446 \\ 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 7,239 Spouse or common-law partner amount 10,382 Amount for an eligible dependant 10,382 Caregiver amount 4,223 Amount for an infirm dependant age 18 or older 4,223 \\ For additional information, see the section called "Personal tax credits return (TD1 forms)" on page 15. Canada Employment Credit for 2010 The Canada Employment Credit (factor K4) is revised to the lesser of: \\ (i) 0.15 multiplied by A; and (ii) 0.15 multiplied by $1,051 \\ Note For purposes of 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 PAGE 7 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. Federal labour-sponsored funds tax credit for 2010 The federal labour-sponsored funds tax credit (factor LCF) for 2010 remains 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, remains at 48%. This federal surtax applies to deemed residents of Canada such as members of the Canadian Armed 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. Tax relief for Canadian Forces and police There is tax relief in the calculation of taxable income for certain members of the Canadian Forces and police serving in high- and moderate-risk areas. This tax relief applies only to military and police personnel. Since this change involves only governmental employers, the details have not been included in this publication. Canada Pension Plan (CPP) for 2010 \\ For 2010, the Canada Pension Plan maximum pensionable earnings are $47,200, 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 $2,163.15. 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 $47,290.90. \\ Employment Insurance (EI) for 2010 \\ For 2010, the maximum annual insurable earnings are $43,200 and the premium rate is 1.73% for a maximum annual premium of $747.36 for the country except for Quebec and 1.36% for a maximum annual premium of $587.52 for Quebec. For 2010, the maximum earnings for the Quebec Parental Insurance Plan (QPIP) are $62,500 with a rate of 0.506% for a maximum annual premium of $316.25. \\ On March 1, 2005, the Quebec government and the federal government signed a final agreement fixing the terms and conditions for implementing the Quebec Parental Insurance Plan (QPIP). The Canada Revenue Agency (CRA) administers the requirements relating to Employment Insurance (EI) premiums. The QPIP references in this publication are only for clarifying EI requirements. All QPIP requirements should be confirmed with Revenu Québec, which administers the provincial plan. Employers will use the EI rate corresponding to the province 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. Quebec Parental Insurance Plan premiums, insurable earnings, and exempt code if applicable will be reported on the T4 slip. Generally speaking, if the remuneration is subject to EI premiums then it is also subject to QPIP premiums. But there are exceptions where the remuneration is not insurable under the Employment Insurance Act but still subject to QPIP premiums. If you are unsure if the PAGE 8 remuneration is one of these special cases then please consult with the Ministère du Revenu du Quebec for a complete listing of remuneration that is subject to QPIP premiums. \\ When an employee changes province of employment with the same employer during the year, the maximum premium for the year will vary based on the province where the first $43,200 of insurable earnings are paid. Example: An employee makes $30,000 of insurable earnings in Ontario and changes his province of employment to Quebec and makes an additional $40,000 with the same employer. The employee's maximum premium is calculated as follows: In Ontario: $30,000 multiplied by 1.73% = $519.00 In Quebec: $13,200 multiplied by 1.36% = $179.52 Totals: ($30,000 + $13,200) =$43,200 $519.00 + $179.52 = $698.52 \\ Canada Revenue Agency and Revenu Québec will reconcile adjustments to EI and QPIP premiums for trans-border employees. It is anticipated that adjustments between the EI and QPIP deductions will be resolved through the filing of the income tax 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 effective January 1, 2010 1. Alberta The provincial tax rate applicable to all taxable income for Alberta, remains at 10%. \\ Personal amounts have been indexed. The provincial indexing factor for 2010 is 0.3%. To calculate the indexed amounts, multiply the appropriate personal amounts by 1.003. For more information on indexing, see page 15. \\ Listed below are some of the revised non-refundable personal tax credits amounts for the province of Alberta. Refer to Form TD1AB for complete information on personal amounts. \\ - The basic personal amount is revised to $16,825 (formerly $16,775). - The spouse or common-law partner amount is revised to $16,825 (formerly $16,775). \\ Personal amounts will be multiplied by the province's tax rate of 10%. 2. British Columbia Effective January 1, 2010, the provincial tax rates for British Columbia are not changed. \\ The income thresholds, personal amounts and tax reduction values are indexed. The provincial indexing factor for 2010 is 0.4%. To calculate the indexed amounts, multiply the provincial income thresholds, appropriate personal amounts and tax reduction values by 1.004. For more information on indexing, see page 15. \\ Effective January 1, 2010, the income thresholds for British Columbia are revised as follows: \\ - 5.06% on income less than or equal to $35,859 (formerly $35,716); - 7.7% on income greater than $35,859, but less than or equal to $71,719 (formerly $71,433); - 10.50% on income greater than $71,719, but less than or equal to $82,342 (formerly $82,014); - 12.29% on income greater than $82,342, but less than or equal to $99,987 (formerly $99,588); and - 14.7% on income greater than $99,987. PAGE 9 In its Budget Update 2009, the government of British Columbia announced an increase to the basic personal amount and the spouse or common-law partner amount for 2010. Listed below are some of the revised non-refundable personal tax credits amounts for the province of British Columbia. Refer to Form TD1BC for complete information on personal amounts. - The basic personal amount is revised to $11,000 (formerly $9,373). - The spouse or common-law partner amount is revised to $9,653 (formerly $8,026). \\ Personal amounts will be multiplied by the province's lowest non-zero tax rate of 5.06%. The provincial labour-sponsored funds tax credit (factor LCP) for British Columbia remains the lesser of $2,000 and 15% of the approved shares purchase. Provincial tax reduction for British Columbia The provincial tax reduction for British Columbia is indexed and is calculated as follows: \\ - Where net income is less than or equal to $17,354 (formerly $17,285), the reduction is equal to the lesser of (i) basic provincial tax, and (ii) $390 (formerly $389); - Where net income is greater than $17,354 and less than or equal to $29,541.50 (formerly $29,441.25), the reduction is equal to the lesser of (i) basic provincial tax, and (ii) $390 minus [(Annual net income minus $17,354) multiplied by 3.2%]; - Where net income is greater than $29,541.50, the reduction is equal to $0. \\ 3. Manitoba The provincial tax rates and income thresholds for Manitoba remain as follows: - 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 the province of Manitoba. Refer to Form TD1MB for complete information on personal amounts. - The basic personal amount remains at $8,134. - The spouse or common-law partner amount remains at $8,134. Personal amounts will be multiplied by the province's lowest non-zero tax rate of 10.8%. The provincial labour-sponsored funds tax credit (factor LCP) for Manitoba remains 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 2010 is 2.0%. To calculate the indexed amounts, multiply the provincial income thresholds and appropriate personal amounts by 1.020. For more information on indexing, see page 15. \\ Effective January 1, 2010, the income thresholds and provincial tax rates for New Brunswick are revised as follows: - 9.3% (formerly 9.18%) on income less than or equal to $36,421 (formerly $35,707); - 12.5% (formerly 13.52%) on income greater than $36,421, but less than or equal to $72,843 (formerly $71,415); - 13.3% (formerly 15.20%) on income greater than $72,843, but less than or equal to $118,427 (formerly $116,105); and - 14.3% (formerly 16.05%) on income greater than $118,427. \\ Listed below are some of the non-refundable personal tax credits amounts for the province of New Brunswick. Refer to Form TD1NB for complete information on personal amounts. \\ - The basic personal amount is revised to $8,777 (formerly $8,605). PAGE 10 - The spouse or common-law partner amount is revised to $7,453 (formerly $7,307). Personal amounts will be multiplied by the province's lowest non-zero tax rate of 9.3%. \\ The provincial labour-sponsored funds tax credit (factor LCP) for New Brunswick remains the lesser of $2,000 and 20% of the approved shares purchase. 5. Newfoundland and Labrador \\ The provincial indexing factor for 2010 is 0.7%. To calculate the indexed amounts, multiply the provincial income thresholds and appropriate personal amounts by 1.007. For more information on indexing, see page 15. \\ Effective January 1, 2010, the provincial tax rates for Newfoundland and Labrador are not changed. The income thresholds for Newfoundland and Labrador are revised as follows: \\ - 7.7% on income less than or equal to $31,278 (formerly $31,061); - 12.8% on income greater than $31,278, but less than or equal to $62,556 (formerly $62,121); and - 15.5% on income greater than $62,556. \\ Listed below are some of the non-refundable personal tax credits amounts for the province of Newfoundland and Labrador. Refer to Form TD1NL for complete information on personal amounts. \\ - The basic personal amount is revised to $7,833 (formerly $7,778). - The spouse or common-law partner amount is revised to $6,400 (formerly $6,356). \\ Personal amounts will be multiplied by the province's lowest non-zero tax rate of 7.7%. The provincial labour-sponsored funds tax credit (factor LCP) for Newfoundland and Labrador remains the lesser of $2,000 and 20% of the approved shares purchase. 6. Northwest Territories Effective January 1, 2010, the territorial tax rates for Northwest Territories are not changed. \\ The income thresholds and personal amounts are indexed. The indexing factor for 2010 is 0.6%. To calculate the indexed amounts, multiply the territorial income thresholds and appropriate personal amounts by 1.006. For more information on indexing, see page 15. \\ The income thresholds are revised as follows: \\ - 5.9% on income less than or equal to $37,106 (formerly $36,885); - 8.6% on income greater than $37,106, but less than or equal to $74,214 (formerly $73,772); - 12.2% on income greater than $74,214, but less than or equal to $120,656 (formerly $119,936); and - 14.05% on income greater than $120,656. \\ Listed below are some of the revised non-refundable personal tax credits amounts for Northwest Territories. Refer to Form TD1NT for complete information on personal amounts. \\ - The basic personal amount is revised to $12,740 (formerly $12,664). - The spouse or common-law partner amount is revised to $12,740 (formerly $12,664). \\ Personal amounts will be multiplied by the territory's lowest non-zero tax rate of 5.9%. The territorial labour-sponsored funds tax credit (factor LCP) for Northwest Territories remains equal to 15% of the first $5,000 invested plus 30% of the remainder of the approved shares purchase, with a maximum credit of $29,250 (the maximum approved shares purchase for purposes of the credit is $100,000.) PAGE 11 7. Nova Scotia The provincial tax rates and income thresholds for Nova Scotia remain as follows: - 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; and - 17.50% on income greater than $93,000. \\ The government of Nova Scotia introduced an increase of $250 to the basic personal amount for 2010 and a proportional change to the other personal amounts. Listed below are some of the non-refundable personal tax credits amounts for the province of Nova Scotia. Refer to Form TD1NS for complete information on personal amounts. - The basic personal amount is revised to $8,231 (formerly $7,981). - The spouse or common-law partner amount is revised to $6,989 (formerly $6,778). \\ Personal amounts will be multiplied by the province's lowest non-zero tax rate of 8.79%. The provincial surtax payable for Nova Scotia remains as follows: - Where the basic provincial tax payable (T4) is less than or equal to $10,000, the surtax payable (V1) is $0. - Where the basic provincial tax payable (T4) is greater than $10,000, the surtax payable (V1) is 10% of the basic provincial tax payable in excess of $10,000. The provincial labour-sponsored funds tax credit (factor LCP) for Nova Scotia remains the lesser of $2,000 and 20% of the approved shares purchase. 8. Nunavut Effective January 1, 2010, the territorial tax rates for Nunavut are not changed. \\ The income thresholds and personal amounts are indexed. The indexing factor for 2010 is 0.6%. To calculate the indexed amounts, multiply the territorial income thresholds and appropriate personal amounts by 1.006. For more information on indexing, see page 15. \\ The income thresholds are revised as follows: \\ - 4% on income less than or equal to $39,065 (formerly $38,832); - 7% on income greater than $39,065, but less than or equal to $78,130 (formerly $77,664); - 9% on income greater than $78,130, but less than or equal to $127,021 (formerly $126,264); and - 11.5% on income greater than $127,021. \\ Listed below are some of the revised non-refundable personal tax credits amounts for Nunavut. Refer to Form TD1NU for complete information on personal amounts. \\ - The basic personal amount is revised to $11,714 (formerly $11,644). - The spouse or common-law partner amount is revised to $11,714 (formerly $11,644). \\ Personal amounts will be multiplied by the territory's lowest non-zero tax rate of 4%. 9. Ontario \\ The income thresholds and personal amounts have been indexed. The provincial indexing factor for 2010 is 0.7%. To calculate the indexed amounts, multiply the provincial income thresholds and appropriate personal amounts by 1.007. For more information on indexing, see page 15. Effective January 1, 2010, the provincial tax rates and income thresholds for Ontario are revised as follows: \\ - 5.05% (formerly 6.05%) on income less than or equal to $37,106 (formerly $36,848); PAGE 12 - 9.15% on income greater than $37,106, but less than or equal to $74,214 (formerly $73,698); and - 11.16% on income greater than $74,214. \\ Listed below are some of the revised non-refundable personal tax credits amounts for the province of Ontario. Refer to Form TD1ON for complete information on personal amounts. \\ - The basic personal amount is revised to $8,943 (formerly $8,881). - The spouse or common-law partner amount is revised to $7,594 (formerly $7,541). Personal amounts will be multiplied by the province's lowest non-zero tax rate of 5.05% (formerly 6.05%). \\ The Ontario provincial surtax thresholds for 2010 are revised as follows: \\ - Where the basic provincial tax payable (T4) is less than or equal to $4,006 (formerly $4,257), the surtax payable (V1) is $0. - Where the basic provincial tax payable (T4) is greater than $4,006 and less than or equal to $5,127 (formerly $5,370), the surtax payable (V1) is 20% of the basic provincial tax payable in excess of $4,006. - Where the basic provincial tax payable (T4) is greater than $5,127, the surtax payable (V1) is the total of 20% of the basic provincial tax payable in excess of $4,006 and 36% of the basic provincial tax payable in excess of $5,127. The provincial labour-sponsored funds tax credit (factor LCP) for Ontario is revised to the lesser of $750 (formerly $1,125) and 10% (formerly 15%) of the approved shares purchase. \\ The Ontario Health Premium (OHP) is payable on annual taxable income in excess of $20,000. It is designated by factor, V2. The OHP remains 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; - 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 Ontario Health Premium is not reduced by the Ontario tax reduction (factor S). The Ontario Health Premium is not related to the Employer Health Tax for Ontario. You include the Ontario Health Premium 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 return. The revised provincial tax reduction amounts for 2010 are as follows: \\ - $206 (formerly $205) for the basic personal amount; PAGE 13 - $382 (formerly $379) for each dependant under age 19*, and - $382 (formerly $379) 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 the TD1ON, the employee or pensioner will have to provide the employer or payer with a written request to include such amounts. The reduction remains equal to twice the individual's personal amounts minus the Ontario income tax. The reduction cannot exceed the Ontario income tax otherwise payable and the reduction is nil when the Ontario income tax exceeds twice the personal amounts. 10. Prince Edward Island The provincial tax rates and income thresholds for Prince Edward Island 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 the province of Prince Edward Island. Refer to Form TD1PE for complete information on personal amounts. - The basic personal amount remains at $7,708. - The spouse or common-law partner amount remains at $6,546. Personal amounts will be multiplied by the province's lowest non-zero tax rate of 9.8%. The provincial surtax payable for Prince Edward Island remains 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 2010. 12. Saskatchewan Effective January 1, 2010, the provincial tax rates for Saskatchewan are not changed. \\ The income thresholds and personal amounts for Saskatchewan are indexed. The indexing factor for 2010 is 0.6%. To calculate the indexed amounts, multiply the provincial income thresholds and appropriate personal amounts by 1.006. For more information on indexing, see page 15. \\ The income thresholds are revised as follows: \\ - 11% on income less than or equal to $40,354 (formerly $40,113); - 13% on income greater than $40,354, but less than or equal to $115,297 (formerly $114,610); and - 15% on income greater than $115,297. \\ Listed below are some of the non-refundable personal tax credits amounts for the province of Saskatchewan. Refer to Form TD1SK for complete information on personal amounts. \\ - The basic personal amount is revised to $13,348 (formerly $13,269). - The spouse or common-law partner amount is revised to $13,348 (formerly $13,269). - The senior supplementary amount is revised to $1,153 (formerly $1,146). - The child amount is revised to $4,944 (formerly $4,915). \\ PAGE 14 Personal amounts will be multiplied by the province's lowest non-zero tax rate of 11%. The provincial labour-sponsored funds tax credit (factor LCP) for Saskatchewan remains the lesser of $1,000 and 20% of the approved shares purchase. 13. Yukon Effective January 1, 2010, the territorial tax rates for Yukon are not changed. \\ The income thresholds and personal amounts are indexed. The indexing factor for 2010 is 0.6%. To calculate the indexed amounts, multiply the territorial income thresholds and appropriate personal amounts by 1.006. For more information on indexing, see page 15. \\ The income thresholds are revised as follows: \\ - 7.04% on income less than or equal to $40,970 (formerly $41,200); - 9.68% on income greater than $40,970, but less than or equal to $81,941 (formerly $82,399); - 11.44% on income greater than $81,941, but less than or equal to $127,021 (formerly $126,264); and - 12.76% on income greater than $127,021. Yukon's territorial Canada Employment Credit, designated as factor K4P, has been increased to $1,051 (formerly $1,044). \\ 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. Refer to Form TD1YT for complete information on personal amounts. \\ - The basic personal amount is revised to $10,382 (formerly $10,375). - The spouse or common-law partner amount is revised to $10,382 (formerly $10,375). \\ Personal amounts will be multiplied by the territory's lowest non-zero tax rate of 7.04%. The surtax payable for Yukon remains 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 remains the lesser of $1,250 and 25% of the approved shares purchase. PAGE 15 Personal tax credits return (TD1 forms) Federal Form TD1, 2010 Personal Tax Credits Return The federal Form TD1 has been revised for 2010. General refiling of the 2010 federal Form TD1 is not necessary, but a new employee, a new pensioner, or an individual who wishes to change his or her federal claim amounts will have to complete the 2010 federal Form TD1. 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 16. 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 credits 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 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 applicable indexing factor 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 the provinces of Alberta and Ontario only, do not include any amounts at line 2, since all Alberta and Ontario credits are subject to indexing. \\ ** The federal indexing factor for 2010 is 1.006. This factor of 1.006 is also applied to Saskatchewan, Yukon, Northwest Territories, and Nunavut. Some changes to Yukon personal amounts are not directly attributable to indexing, as they have harmonized amounts with the federal values. The indexing factors for the other provinces are as follows: New Brunswick at 1.020, Newfoundland and Labrador at 1.007, Ontario at 1.007, Alberta at 1.003, and British Columbia at 1.004. There is no indexing applied to Nova Scotia, Prince Edward Island, and Manitoba. \\ Provincial and territorial TD1 forms CRA provides a specific 2010 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 wish to change their personal tax credits amounts must complete both the federal and applicable provincial or territorial TD1 forms. An employee who changes province or territory of employment or a pensioner who moves to another province or territory should complete the appropriate provincial or territorial TD1 form. PAGE 16 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 are required 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 claim code amounts will not correspond to the federal claim code amounts. You will not find claim code amounts on Form TD1. A listing of claim codes and amount ranges can be found below. *** Transcriber's Note: In print, for the following 2010 Federal claim codes, the format was set-up as 4 columns labelled as: Claim code; Total claim amount ($); Option 1, TC = ; Option 1, K1 =. *** \\\ \\ 2010 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 - 10,382.00 Option 1, TC = 10,382.00 Option 1, K1 = 1,557.30 Code 2 Total claim: 10,382.01 - 12,366.00 Option 1, TC = 11,374.00 Option 1, K1 = 1,706.10 Code 3 Total claim: 12,366.01 - 14,350.00 Option 1, TC = 13,358.00 Option 1, K1 = 2,003.70 Code 4 Total claim: 14,350.01 - 16,334.00 Option 1, TC = 15,342.00 Option 1, K1 = 2,301.30 Code 5 Total claim: 16,334.01 - 18,318.00 Option 1, TC = 17,326.00 Option 1, K1 = 2,598.90 Code 6 Total claim: 18,318.01 - 20,302.00 Option 1, TC = 19,310.00 Option 1, K1 = 2,896.50 Code 7 Total claim: 20,302.01 - 22,286.00 Option 1, TC = 21,294.00 Option 1, K1 = 3,194.10 Code 8 Total claim: 22,286.01 - 24,270.00 Option 1, TC = 23,278.00 Option 1, K1 = 3,491.70 Code 9 Total claim: 24,270.01 - 26,254.00 Option 1, TC = 25,262.00 Option 1, K1 = 3,789.30 Code 10 Total claim: 26,254.01 - 28,238.00 Option 1, TC = 27,246.00 Option 1, K1 = 4,086.90 \\\ \\ PAGE 17 \\\ \\ 2010 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 - 16,825.00 Option 1, TCP = 16,825.00 Option 1, K1P = 1,682.50 Code 2 Total claim: 16,825.01 - 19,287.00 Option 1, TCP = 18,056.00 Option 1, K1P = 1,805.60 Code 3 Total claim: 19,287.01 - 21,749.00 Option 1, TCP = 20,518.00 Option 1, K1P = 2,051.80 Code 4 Total claim: 21,749.01 - 24,211.00 Option 1, TCP = 22,980.00 Option 1, K1P = 2,298.10 Code 5 Total claim: 24,211.01 - 26,673.00 Option 1, TCP = 25,442.00 Option 1, K1P = 2,544.20 Code 6 Total claim: 26,673.01 - 29,135.00 Option 1, TCP = 27,904.00 Option 1, K1P = 2,790.40 Code 7 Total claim: 29,135.01 - 31,597.00 Option 1, TCP = 30,366.00 Option 1, K1P = 3,036.60 Code 8 Total claim: 31,597.01 - 34,059.00 Option 1, TCP = 32,828.00 Option 1, K1P = 3,282.80 Code 9 Total claim: 34,059.01 - 36,521.00 Option 1, TCP = 35,290.00 Option 1, K1P = 3,529.00 Code 10 Total claim: 36,521.01 - 38,983.00 Option 1, TCP = 37,752.00 Option 1, K1P = 3,775.20 \\\ \\ \\\ \\ 2010 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 - 11,000.00 Option 1, TCP = 11,000.00 Option 1, K1P = 556.60 Code 2 Total claim: 11,000.01 - 13,118.00 Option 1, TCP = 12,059.00 Option 1, K1P = 610.19 Code 3 Total claim: 13,118.01 - 15,236.00 Option 1, TCP = 14,177.00 Option 1, K1P = 717.36 Code 4 Total claim: 15,236.01 - 17,354.00 Option 1, TCP = 16,295.00 Option 1, K1P = 824.53 Code 5 Total claim: 17,354.01 - 19,472.00 Option 1, TCP = 18,413.00 Option 1, K1P = 931.70 Code 6 Total claim: 19,472.01 - 21,590.00 Option 1, TCP = 20,531.00 Option 1, K1P = 1,038.87 Code 7 Total claim: 21,590.01 - 23,708.00 Option 1, TCP = 22,649.00 Option 1, K1P = 1,146.04 Code 8 Total claim: 23,708.01 - 25,826.00 Option 1, TCP = 24,767.00 Option 1, K1P = 1,253.21 Code 9 Total claim: 25,826.01 - 27,944.00 Option 1, TCP = 26,885.00 Option 1, K1P = 1,360.38 Code 10 Total claim: 27,944.01 - 30,062.00 Option 1, TCP = 29,003.00 Option 1, K1P = 1,467.55 \\\ \\ \\\ 2010 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 - 8,134.00 Option 1, TCP = 8,134.00 Option 1, K1P = 878.47 Code 2 Total claim: 8,134.01 - 9,827.00 Option 1, TCP = 8,980.50 Option 1, K1P = 969.89 Code 3 Total claim: 9,827.01 - 11,520.00 Option 1, TCP = 10,673.50 Option 1, K1P = 1,152.74 Code 4 Total claim: 11,520.01 - 13,213.00 Option 1, TCP = 12,366.50 Option 1, K1P = 1,335.58 Code 5 Total claim: 13,213.01 - 14,059.00 Option 1, TCP = 13,959.50 Option 1, K1P = 1,518.43 Code 6 Total claim: 14,906.01 - 16,599.00 Option 1, TCP = 15,752.50 Option 1, K1P = 1,701.27 Code 7 Total claim: 16,599.01 - 18,292.00 Option 1, TCP = 17,445.50 Option 1, K1P = 1,884.11 Code 8 Total claim: 18,292.01 - 19,985.00 Option 1, TCP = 19,138.50 Option 1, K1P = 2,066.96 Code 9 Total claim: 19,985.01 - 21,678.00 Option 1, TCP = 20,831.50 Option 1, K1P = 2,249.80 Code 10 Total claim: 21,678.01 - 23,371.00 Option 1, TCP = 22,524.50 Option 1, K1P = 2,432.65 \\\ PAGE 18 \\\ \\ 2010 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 - 8,777.00 Option 1, TCP = 8,777.00 Option 1, K1P = 816.26 Code 2 Total claim: 8,777.01 - 10,724.00 Option 1, TCP = 9,750.50 Option 1, K1P = 906.80 Code 3 Total claim: 10,724.01 - 12,671.00 Option 1, TCP = 11,697.50 Option 1, K1P = 1,087.87 Code 4 Total claim: 12,671.01 - 14,618.00 Option 1, TCP = 13,644.50 Option 1, K1P = 1,268.94 Code 5 Total claim: 14,618.01 - 16,565.00 Option 1, TCP = 15,591.50 Option 1, K1P = 1,450.01 Code 6 Total claim: 16,565.01 - 18,512.00 Option 1, TCP = 17,538.50 Option 1, K1P = 1,631.08 Code 7 Total claim: 18,512.01 - 20,459.00 Option 1, TCP = 19,485.50 Option 1, K1P = 1,812.15 Code 8 Total claim: 20,459.01 - 22,406.00 Option 1, TCP = 21,432.50 Option 1, K1P = 1,993.22 Code 9 Total claim: 22,406.01 - 24,353.00 Option 1, TCP = 23,379.50 Option 1, K1P = 2,174.29 Code 10 Total claim: 24,353.01 - 26,300.00 Option 1, TCP = 25,326.50 Option 1, K1P = 2,355.36 \\\ \\ \\\ \\ 2010 Newfoundland and Labrador 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 - 7,833.00 Option 1, TC = 7,833.00 Option 1, K1 = 603.14 Code 2 Total claim: 7,833.01 - 9,524.00 Option 1, TC = 8,678.50 Option 1, K1 = 668.24 Code 3 Total claim: 9,524.01 - 11,215.00 Option 1, TC = 10,369.50 Option 1, K1 = 798.45 Code 4 Total claim: 11,215.01 - 12,906.00 Option 1, TC = 12,060.50 Option 1, K1 = 928.66 Code 5 Total claim: 12,906.01 - 14,597.00 Option 1, TC = 13,751.50 Option 1, K1 = 1,058.87 Code 6 Total claim: 14,597.01 - 16,288.00 Option 1, TC = 15,442.50 Option 1, K1 = 1,189.07 Code 7 Total claim: 16,288.01 - 17,979.00 Option 1, TC = 17,133.50 Option 1, K1 = 1,319.28 Code 8 Total claim: 17,979.01 - 19,670.00 Option 1, TC = 18,824.50 Option 1, K1 = 1,449.49 Code 9 Total claim: 19,670.01 - 21,361.00 Option 1, TC = 20,515.50 Option 1, K1 = 1,579.69 Code 10 Total claim: 21,361.01 - 23,052.00 Option 1, TC = 22,206.50 Option 1, K1 = 1,709.90 \\\ \\ \\\ \\ 2010 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 - 12,740.00 Option 1, TCP = 12,740.00 Option 1, K1P = 751.66 Code 2 Total claim: 12,740.01 - 14,931.00 Option 1, TCP = 13,835.50 Option 1, K1P = 816.29 Code 3 Total claim: 14,931.01 - 17,122.00 Option 1, TCP = 16,026.50 Option 1, K1P = 945.56 Code 4 Total claim: 17,122.01 - 19,313.00 Option 1, TCP = 18,217.50 Option 1, K1P = 1,074.83 Code 5 Total claim: 19,313.01 - 21,504.00 Option 1, TCP = 20,408.50 Option 1, K1P = 1,204.10 Code 6 Total claim: 21,504.01 - 23,695.00 Option 1, TCP = 22,599.50 Option 1, K1P = 1,333.37 Code 7 Total claim: 23,695.01 - 25,886.00 Option 1, TCP = 24,790.50 Option 1, K1P = 1,462.64 Code 8 Total claim: 25,886.01 - 28,077.00 Option 1, TCP = 26,981.50 Option 1, K1P = 1,591.91 Code 9 Total claim: 28,077.01 - 30,268.00 Option 1, TCP = 29,172.50 Option 1, K1P = 1,721.18 Code 10 Total claim: 30,268.01 - 32,459.00 Option 1, TCP = 31,363.50 Option 1, K1P = 1,850.45 \\\ \\ PAGE 19 \\\ \\ 2010 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 - 8,231.00 Option 1, TCP = 8,231.00 Option 1, K1P = 723.50 Code 2 Total claim: 8,231.01 - 9,831.00 Option 1, TCP = 9,031.00 Option 1, K1P = 793.82 Code 3 Total claim: 9,831.01 - 11,431.00 Option 1, TCP = 10,631.00 Option 1, K1P = 934.46 Code 4 Total claim: 11,431.01 - 13,031.00 Option 1, TCP = 12,231.00 Option 1, K1P = 1,075.10 Code 5 Total claim: 13,031.01 - 14,631.00 Option 1, TCP = 13,831.00 Option 1, K1P = 1,215.74 Code 6 Total claim: 14,631.01 - 16,231.00 Option 1, TCP = 15,431.00 Option 1, K1P = 1,356.38 Code 7 Total claim: 16,231.01 - 17,831.00 Option 1, TCP = 17,031.00 Option 1, K1P = 1,497.02 Code 8 Total claim: 17,831.01 - 19,431.00 Option 1, TCP = 18,631.00 Option 1, K1P = 1,637.66 Code 9 Total claim: 19,431.01 - 21,031.00 Option 1, TCP = 20,231.00 Option 1, K1P = 1,778.30 Code 10 Total claim: 21,031.01 - 22,631.00 Option 1, TCP = 21,831.00 Option 1, K1P = 1,918.94 \\\ \\ \\\ \\ 2010 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 - 11,714.00 Option 1, TCP = 11,714.00 Option 1, K1P = 468.56 Code 2 Total claim: 11,714.01 - 13,940.00 Option 1, TCP = 12,827.00 Option 1, K1P = 513.08 Code 3 Total claim: 13,940.01 - 16,166.00 Option 1, TCP = 15,053.00 Option 1, K1P = 602.12 Code 4 Total claim: 16,166.01 - 18,392.00 Option 1, TCP = 17,279.00 Option 1, K1P = 691.16 Code 5 Total claim: 18,392.01 - 20,618.00 Option 1, TCP = 19,505.00 Option 1, K1P = 780.20 Code 6 Total claim: 20,618.01 - 22,844.00 Option 1, TCP = 21,731.00 Option 1, K1P = 869.24 Code 7 Total claim: 22,844.01 - 25,070.00 Option 1, TCP = 23,957.00 Option 1, K1P = 958.28 Code 8 Total claim: 25,070.01 - 27,296.00 Option 1, TCP = 26,183.00 Option 1, K1P = 1,047.32 Code 9 Total claim: 27,296.01 - 29,522.00 Option 1, TCP = 28,409.00 Option 1, K1P = 1,136.36 Code 10 Total claim: 29,522.01 - 31,748.00 Option 1, TCP = 30,635.00 Option 1, K1P = 1,225.40 \\\ \\ \\\ \\2010 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 - 8,943.00 Option 1, TCP = 8,943.00 Option 1, K1P = 451.62 Code 2 Total claim: 8,943.01 - 10,870.00 Option 1, TCP = 9,906.50 Option 1, K1P = 500.28 Code 3 Total claim: 10,870.01 - 12,797.00 Option 1, TCP = 11,833.50 Option 1, K1P = 597.59 Code 4 Total claim: 12,797.01 - 14,724.00 Option 1, TCP = 13,760.50 Option 1, K1P = 694.91 Code 5 Total claim: 14,724.01 - 16,651.00 Option 1, TCP = 15,687.50 Option 1, K1P = 792.22 Code 6 Total claim: 16,651.01 - 18,578.00 Option 1, TCP = 17,614.50 Option 1, K1P = 889.53 Code 7 Total claim: 18,578.01 - 20,505.00 Option 1, TCP = 19,541.50 Option 1, K1P = 986.85 Code 8 Total claim: 20,505.01 - 22,432.00 Option 1, TCP = 21,468.50 Option 1, K1P = 1,084.16 Code 9 Total claim: 22,432.01 - 24,359.00 Option 1, TCP = 23,395.50 Option 1, K1P = 1,181.47 Code 10 Total claim: 24,359.01 - 26,286.00 Option 1, TCP = 25,322.50 Option 1, K1P = 1,278.79 \\\ \\ PAGE 20 \\\ 2010 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 \\\ \\\ \\ 2010 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 - 13,348.00 Option 1, TCP = 13,348.00 Option 1, K1P = 1,468.28 Code 2 Total claim: 13,348.01 - 15,193.00 Option 1, TCP = 14,270.50 Option 1, K1P = 1,569.76 Code 3 Total claim: 15,193.01 - 17,038.00 Option 1, TCP = 16,115.50 Option 1, K1P = 1,772.71 Code 4 Total claim: 17,038.01 - 18,883.00 Option 1, TCP = 17,960.50 Option 1, K1P = 1,975.66 Code 5 Total claim: 18,883.01 - 20,728.00 Option 1, TCP = 19,805.50 Option 1, K1P = 2,178.61 Code 6 Total claim: 20,728.01 - 22,573.00 Option 1, TCP = 21,650.50 Option 1, K1P = 2,381.56 Code 7 Total claim: 22,573.01 - 24,418.00 Option 1, TCP = 23,495.50 Option 1, K1P = 2,584.51 Code 8 Total claim: 24,418.01 - 26,263.00 Option 1, TCP = 25,340.50 Option 1, K1P = 2,787.46 Code 9 Total claim: 26,263.01 - 28,108.00 Option 1, TCP = 27,185.50 Option 1, K1P = 2,990.41 Code 10 Total claim: 28,108.01 - 29,953.00 Option 1, TCP = 29,030.50 Option 1, K1P = 3,193.36 \\\ \\ \\\ \\ 2010 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 - 10,382.00 Option 1, TCP = 10,382.00 Option 1, K1P = 730.89 Code 2 Total claim: 10,382.01 - 12,366.00 Option 1, TCP = 11,374.00 Option 1, K1P = 800.73 Code 3 Total claim: 12,366.01 - 14,350.00 Option 1, TCP = 13,358.00 Option 1, K1P = 940.40 Code 4 Total claim: 14,350.01 - 16,334.00 Option 1, TCP = 15,342.00 Option 1, K1P = 1,080.08 Code 5 Total claim: 16,334.01 - 18,318.00 Option 1, TCP = 17,326.00 Option 1, K1P = 1,219.75 Code 6 Total claim: 18,318.01 - 20,302.00 Option 1, TCP = 19,310.00 Option 1, K1P = 1,359.42 Code 7 Total claim: 20,302.01 - 22,286.00 Option 1, TCP = 21,294.00 Option 1, K1P = 1,499.10 Code 8 Total claim: 22,286.01 - 24,270.00 Option 1, TCP = 23,278.00 Option 1, K1P = 1,638.77 Code 9 Total claim: 24,270.01 - 26,254.00 Option 1, TCP = 25,262.00 Option 1, K1P = 1,778.44 Code 10 Total claim: 26,254.01 - 28,238.00 Option 1, TCP = 27,246.00 Option 1, K1P = 1,918.12 \\\ \\ PAGE 21 Tax deductions from commission income Form TD1X, Statement of Commission Income and Expenses for Payroll Tax Deductions Form TD1X remains unchanged for 2010. The form is to be used for both federal and provincial or territorial tax purposes. Remitting and reporting federal and provincial or territorial tax deductions Payroll remittances (Form PD7A, Statement of Account for Current Source Deductions) You report the combined federal and provincial or territorial tax deductions on payroll remittance forms. Also, make periodic remittances to the Canada Revenue Agency (CRA) of federal and provincial or territorial tax, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums. Pay statements and T4 slips, Statement of Remuneration Paid You show the combined federal and provincial or territorial tax deductions on your pay statements. Also, you 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 The Canada Revenue Agency will continue to issue letters of authority to reduce federal and provincial or territorial tax deductions, for example, in respect of support payments. Payroll Deductions Online Calculator Important features of the Payroll Deductions Online Calculator include: - The Payroll Deductions Online Calculator is an interactive web application that calculates payroll deductions for all pay periods, provinces (except for Quebec), and territories. You will find a link to the Payroll Deductions Online Calculator at www.cra.gc.ca/payroll. - The new Payroll Deductions Online Calculator applies the exact taxable income amount to determine the tax deductions. The calculations are more accurate than those produced by the Tables on Diskette (TOD); - The Payroll Deductions Online Calculator offers the same features as the current CD version of the Tables on Diskette (TOD), without the hassle of downloading or installing the program. The online calculator is compatible with all users' operating systems. Tables on Diskette (TOD) for January 1, 2010 Tables on Diskette (TOD), is a stand-alone computer program that calculates payroll deductions for all pay periods, provinces (except for Quebec), and territories. TOD gives you easy access to information you need, without the burden of paperwork. TOD is available free of charge to all employers. PAGE 22 General information Any deviation from the formulas If you deviate from the formulas, rates, and constants we provide, other than for converting to the related pay period, you have to submit the 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 When 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 An employee's basic exemption for a pay period is determined 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. 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 definition 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 Multiplication Parentheses and brackets indicate that the quantities enclosed are calculated before the remainder 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 or Quebec Pension Plan contributions and Employment Insurance premium deductions is based on the amount determined in item (i); and PAGE 23 (iii) the mid-point of the "Claim code" amounts on federal, provincial, and territorial TD1 forms are 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 Payroll Deductions and Remittances, in the section called "Withholding rates for lump-sum payments." Depending on the total income, the composite rates are given as 10%, 20%, or 30% (5%, 10%, or 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 (RRIF) 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 an RRIF, following an election to make withdrawals that are above the yearly minimum, to be a blended payment. In such cases, the 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 (RRSPs) Contributions you make to an employee's RRSP and RRSP administration fees that you pay on behalf of 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. If GST/HST 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 cease to be employed. Where you allow the employee to withdraw RRSP funds under the Home Buyers Plan or Lifelong Learning Plan, we still consider the contributions to be non-cash benefits. Although the benefit is taxable and has to be reported on the T4 slip, you do not have to deduct income tax at source on the contributions you make to employees' RRSPs. However, you must have reasonable grounds to believe that the employee can deduct the contribution 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?" PAGE 24 Information Returns Electronic Filing Since January 2006, three options are available: T4 Web forms: This convenient filing option is for employers who have to file 1 to 3 original or amended T4 slips. With T4 Web forms, all you need is a compatible browser to complete, print, and submit a T4 information return. T4 and T1204 desktop applications: These downloadable desktop applications let you create, save, and print an electronic T4 or T1204 information return. Internet file transfer (XML): Since January 2006, Internet File Transfer (XML) is available for the following information returns: Originals and amended - T1204, T4, T4A, T4A-NR, T4RIF and T4RSP; Originals only - T4E. You may also file multiple returns within a single submission (maximum 610 Kb). Clients will require a payroll Business Number (RP) and Web Access Code (WAC) when filing these returns to CRA. We invite you to visit our Web site at: www.cra.gc.ca/eservices. Use and requirement of Social Insurance Number (SIN) 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 obtain a SIN from an individual. An individual without a SIN has to apply for one at the nearest office of Service Canada within 15 days of the date the employer or payer requests it. After receiving the 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 for a fine or penalty for each failure. An employer or payer who fails to provide a SIN on an information slip is also liable for 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 for 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 (T4, T4A, etc.) 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 82-2, Social Insurance Number Legislation That Relates to the Preparation of Information Slips. Validation of the Social Insurance Number (SIN) Service Canada uses the 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: 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 PAGE 25 Add each alternate digit beginning at the first digit (1 + 3 + 5 + 7) = 16 Total 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 are unable to obtain 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 ensure the employee receives proper credit for the deductions. Validating the Business Number (BN) The Business Number is a nine-digit registration number and account identifier, for example: 12345 6782 RP0001. You can check the validity of the registration part of the Business Number by using the same standard formula used for the Social Insurance Number. For validation purposes, use only the first nine digits of the Business Number. 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 contained 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 deductions amounts contained in the Payroll Deductions Tables (T4032) and Payroll Deductions Supplementary Tables (T4008) for each province and territory, and in Canada beyond the limits of any province 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. 5. Calculate the annual provincial or territorial tax deduction. This is factor T2. PAGE 26 6. Add the federal and provincial or territorial tax and divide the result by the number of pay periods to find the estimated federal and provincial or territorial tax deductions for a pay period. 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 32. 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 individual income tax return for the year. The employee or pensioner may ask for additional tax deductions, factor L, using Form TD1. Glossary \\\ Factor Meaning (refer to the formulas for complete details) 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 CPP 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 (RPP), a registered retirement savings plan (RRSP), or a retirement compensation arrangement (RCA) F1 Annual deductions such as child care expenses and support payments, etc., 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 to the non-periodic payment, such as union dues 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 to the non-periodic payment, such as union dues. 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 premium tax credits for the year K2P Provincial or territorial Canada Pension Plan contribution 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 PAGE 27 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 K4P Provincial or territorial Canada Employment Credit (applies to Yukon only) L Additional 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 remaining in the year R Federal tax rate applicable 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 a bonus, retroactive pay increase, etc., 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 Additional tax calculated on taxable income (applies to Ontario Health Premium only) Y Additional 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 = Additional tax deductions for the pay period requested by the employee or pensioner as indicated on Form TD1. \\\ For employees remunerated by commission only: 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. 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 limit for the year. \\\ PAGE 28 P = The number of pay periods in the year: Weekly P = 52 ( or 53 where applicable) Bi-weekly 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 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. See the formula called "Tax calculation formula for bonuses, retroactive pay increases, or other non-periodic payments" on page 32 for the tax deductions calculation on bonuses, retroactive pay increases, or other non-periodic payments. 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 on behalf of an employee to determine 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 including retiring allowances (both eligible and non-eligible portions), 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), additional 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 actual 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. PAGE 29 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 it is applicable. 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 remaining in the year excluding current pay period. E = Total commission expenses deductions reported on Form TD1X. 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. For employees in Quebec only: (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 applicable to annual taxable income A. \\\ \\ 2010 federal tax rates and income thresholds Annual taxable income A: More than $0 - Not more than $40,970 Rate R: 0.15 Constant K: $0 More than 40,970 - Not more than 81,941 Rate R: 0.22 Constant K: 2,868 More than 81,941 - Not more than 127,021 Rate R: 0.26 Constant K: 6,146 More than 127,021 and over Rate R: 0.29 Constant K: 9,956 \\\ \\ 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 "2010 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 "2010 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 $10,382, 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 2009, see the section called "Indexing of personal amounts" on page 15. PAGE 30 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 $2,163.15)) + (0.15 multiplied by (P multiplied by EI, maximum $747.36))]* \\ For employees in Quebec only: \\ 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 $2,163.15)) + (0.15 multiplied by (P multiplied by EI, maximum $587.52)) + (0.15 multiplied by (P multiplied by IE multiplied by 0.00506, maximum $316.25))]* \\ 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 84. EI = Employment Insurance premium for the pay period. See the section called "Part C - Employment Insurance (EI)" on page 88. 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 remaining pay periods in the year, (P multiplied by C) or (P multiplied by EI) or (P multiplied by IE multiplied by 0.00506), 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 remaining 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) $2,163.15; and \\ (ii) Year-to-date C + (PR multiplied by C). (P multiplied by EI) is changed to the lesser of: \\ (i) $747.36; and \\ (ii) Year-to-date EI + (PR multiplied by EI). For employees in Quebec only: (P multiplied by EI) is changed to the lesser of: \\ (i) $587.52; and \\ (ii) Year-to-date EI + (PR multiplied by EI). \\ (P multiplied by IE multiplied by 0.00506) is changed to the lesser of: (i) $316.25; and (ii) Year-to-date QPIP+ (PR multiplied by IE multiplied by 0.00506). \\ Where: PR = The number of pay periods remaining in the year excluding current pay period. \\\ For employees remunerated by commission only: \\ K2 = [(0.15 multiplied by (0.0495 multiplied by (I1 minus $3,500)*, maximum $2,163.15)) + (0.15 multiplied by (0.0173 multiplied by I1, maximum $747.36))] \\ * If the resulting amount is negative, substitute $0. PAGE 31 For employees in Quebec only: \\ K2Q = [(0.15 multiplied by (0.0495 multiplied by (I1 minus $3,500)*, maximum $2,163.15)) + (0.15 multiplied by (0.0136 multiplied by I1, maximum $587.52)) + (0.15 multiplied by (0.00506 multiplied by I1, max $316.25))] \\ * 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 applicable. 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 remaining in the year excluding current pay period. K4 = Canada Employment Credit = The lesser of: \\ (i) 0.15 multiplied by A; and (ii) 0.15 multiplied by $1,051. \\ Note For purposes of 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 = (T3 minus LCF)* * If the result is negative, substitute $0. For employees in Quebec only: T1 = [(T3 minus LCF)* minus (0.165 multiplied by T3)]* * If the result is negative, substitute $0. For employees outside Canada and in Canada beyond the limits of any province only: 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 PAGE 32 (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, or 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. 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, excluding 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. PAGE 33 B1 = Gross bonus, retroactive pay increase, or other non-periodic payments year-to-date (prior to 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 to the non-periodic payment, such as union dues. 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 remaining pay periods in the year. YTD means year- to-date (prior to 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. \\ 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 and excluding non-periodic payments. FYTD = Employee registered pension plan or registered retirement savings plan 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 remaining 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 PAGE 34 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 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 Once you have calculated the annual taxable income, A, in Steps 1 and 2, calculate the factors T1 and T2 in the same manner 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 (not applicable to Quebec, outside Canada, and in Canada beyond the limits of any province). 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. 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 (applies to Yukon only). 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. For employees in Quebec only: T2 = $0 For employees outside Canada and in Canada beyond the limits of any province only: T2 = $0 T4 = Annual basic provincial or territorial tax. V1 = Provincial or territorial surtax calculated on the basic provincial or territorial tax (applicable to NS, PE, ON, and YT only). V2 = Additional tax calculated on taxable income (applies to Ontario Health Premium only). S = Provincial tax reduction (applicable to ON and BC only). LCP = Provincial or territorial labour-sponsored funds tax credit (applicable to NL, NS, NB, ON, MB, SK, BC, NT and YT only). A1 = Annual net income used to calculate S (applies to BC only). = A + HD PAGE 35 \\\ For employees remunerated by commission only: 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 manner as for regular salary. \\\ For Alberta only: 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 Form TD1AB is not filed, TCP is $16,825. K2P = [(0.10 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.10 multiplied by (P multiplied by EI, maximum $747.36))]* \\ * 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 30 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 the province. 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 office will inform the employer or payer of the amount of K3P when it applies and of how to implement the amount after the first pay period of the year. V1, S, and LCP = $0 For British Columbia only: 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 2010 British Columbia tax rates and income thresholds table. PAGE 36 \\\ \\ 2010 British Columbia tax rates and income thresholds Annual taxable income A: More than $0 - Not more than $35,859 Rate V: 0.0506 Constant KP: $0 More than 35,859 - Not more than 71,719 Rate V: 0.0770 Constant KP: 947 More than 71,719 - Not more than 82,342 Rate V: 0.1050 Constant KP: 2,955 More than 82,342 - Not more than 99,987 Rate V: 0.1229 Constant KP: 4,429 More than 99,987 and over Rate V: 0.1470 Constant KP: 6,838 \\\ \\ K1P = 0.0506 multiplied by TCP Where: \\ TCP = The total of personal non-refundable tax credits amounts reported on Form TD1BC. If Form TD1BC is not filed, TCP is $11,000. K2P = [(0.0506 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.0506 multiplied by (P multiplied by EI, maximum $747.36))]* \\ * 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 30 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 province. 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 office will inform the employer or payer of the amount of K3P when it applies and how to implement the amount after the first pay period of the year. V1 = $0 \\ S = Where A1 is less than or equal to $17,354, S is equal to the lesser of: (i) T4, and (ii) $390; = Where A1 is greater than $17,354 is less than or equal to $29,541.50, S is equal to the lesser of: (i) T4, and (ii) $390 minus [(A1 minus $17,354) multiplied by 3.2%]; = Where A1 is greater than $29,541.50, S = $0 \\ 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. For Manitoba only: 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 2010 Manitoba tax rates and income thresholds table. PAGE 37 \\\ 201 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 Form TD1MB is not filed, TCP is $8,134. \\ K2P = [(0.108 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.108 multiplied by (P multiplied by EI, maximum $747.36))]* \\ * 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 30 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 province. 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 office will inform the employer or payer of the amount of K3P when it applies and of 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. For New Brunswick only: 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 2010 New Brunswick tax rates and income thresholds table. \\\ \\ 2010 New Brunswick tax rates and income thresholds Annual taxable income A: More than $0 - Not more than $36,421 Rate V: 0.093 Constant KP: $0 More than 36,421 - Not more than 72,843 Rate V: 0.125 Constant KP: 1,165 More than 72,843 - Not more than 118,427 Rate V: 0.133 Constant KP: 1,748 More than 118,427 and over Rate V: 0.143 Constant KP: 2,932 \\\ \\ \\ K1P = 0.093 multiplied by TCP \\ Where: \\ TCP = The total of personal non-refundable tax credits amounts reported on Form TD1NB. If Form TD1NB is not filed, TCP is $8,777. \\ PAGE 38 \\ K2P = [(0.093 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.093 multiplied by (P multiplied by EI, maximum $747.36))]* \\ * 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 30 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 province. 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 office will inform the employer or payer of the amount of K3P when it applies and 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. For Newfoundland and Labrador only: 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 2010 Newfoundland and Labrador tax rates and income thresholds table. \\\ \\ 2010 Newfoundland and Labrador tax rates and income thresholds Annual taxable income A: More than $0 - Not more than $31,278 Rate V: 0.077 Constant KP: $0 More than 31,278 - Not more than 62,556 Rate V: 0.128 Constant KP: 1,595 More than 62,556 and over Rate V: 0.155 Constant KP: 3,284 \\\ \\ K1P = 0.077 multiplied by TCP Where: \\ TCP = The total of personal non-refundable tax credits amounts reported on Form TD1NL. If Form TD1NL is not filed, TCP is $7,833. K2P = [(0.077 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.077 multiplied by (P multiplied by EI, maximum $747.36))]* \\ * 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 30 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 province. 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 office will inform the employer or payer of the amount of K3P when it applies and how to implement the amount after the first pay period of the year. V1 = $0 S = $0 PAGE 39 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. For the Northwest Territories only: 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 2010 Northwest Territories tax rates and income thresholds table. \\\ \\ 2010 Northwest Territories tax rates and income thresholds Annual taxable income A: More than $0 - Not more than $37,106 Rate V: 0.0590 Constant KP: $0 More than 37,106 - Not more than 74,214 Rate V: 0.0860 Constant KP: 1,002 More than 74,214 - Not more than 120,656 Rate V: 0.1220 Constant KP: 3,674 More than 120,656 and over Rate V: 0.1405 Constant KP: 5,906 \\\ \\ K1P = 0.059 multiplied by TCP Where: \\ TCP = The total of personal non-refundable tax credits amounts reported on Form TD1NT. If Form TD1NT is not filed, TCP is $12,740. K2P = [(0.059 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.059 multiplied by (P multiplied by EI, maximum $747.36))]* \\ * 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 30 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 territory. 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 office will inform the employer or payer of the amount of K3P when it applies and how to implement the amount after the first pay period of the year. V1 and S = $0 LCP = The lesser of: (i) $29,250; and (ii) 15% of the first $5,000 and 30% of the remainder of amounts 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. For Nova Scotia only: 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 2010 Nova Scotia tax rates and income thresholds table. PAGE 40 \\\ 2010 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 and over Rate V: 0.1750 Constant KP: 3,613 \\\ K1P = 0.0879 multiplied by TCP Where: \\ TCP = The total of personal non-refundable tax credits amounts reported on Form TD1NS. If Form TD1NS is not filed, TCP is $8,231. K2P = [(0.0879 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.0879 multiplied by (P multiplied by EI, maximum $747.36))]* \\ * 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 30 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 province. 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 office will inform the employer or payer of the amount of K3P when it applies and how to implement the amount after the first pay period of the year. V1 = Where T4 is less than or equal $10,000, V1 = $0 Where T4 is greater than $10,000, V1 = 0.10 multiplied by (T4 minus $10,000) 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. For Nunavut only: 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 2010 Nunavut tax rates and income thresholds table. PAGE 41 \\\ \\ 2010 Nunavut tax rates and income thresholds Annual taxable income A: More than $0 - Not more than $39,065 Rate V: 0.040 Constant KP: $0 More than 39,065 - Not more than 78,130 Rate V: 0.070 Constant KP: 1,172 More than 78,130 - Not more than 127,021 Rate V: 0.090 Constant KP: 2,735 More than 127,021 and over Rate V: 0.115 Constant KP: 5,910 \\\ \\ K1P = 0.040 multiplied by TCP Where: \\ TCP = The total of personal non-refundable tax credits amounts reported on Form TD1NU. If Form TD1NU is not filed, TCP is $11,714. K2P = [(0.040 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.040 multiplied by (P multiplied by EI, max. $747.36))]* \\ * 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 30 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 territory. 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 office will inform the employer or payer of the amount of K3P when it applies and of how to implement the amount after the first pay period of the year. V1, S, and LCP = $0 For Ontario only: 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 2010 Ontario tax rates and income thresholds table. \\\ \\ 2010 Ontario tax rates and income thresholds Annual taxable income A More than $0 - Not more than $37,106 Rate V: 0.0505 Constant KP: $0 More than 37,106 - Not more than 74,214 Rate V: 0.0915 Constant KP: 1,521 More than 74,214 and over Rate V: 0.1116 Constant KP: 3,013 \\\ \\ \\ K1P = 0.0505 multiplied by TCP \\ Where: \\ TCP = The total of personal non-refundable tax credits amounts reported on Form TD1ON. If Form TD1ON is not filed, TCP is $8,943. K2P = [(0.0505 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.0505 multiplied by (P multiplied by EI, maximum $747.36))]* \\ * 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 30 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 province. PAGE 42 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 office will inform the employer or payer of the amount of K3P when it applies and of how to implement the amount after the first pay period of the year. \\ V1 = Where T4 is less than or equal to $4,006, V1 = $0 Where T4 is greater than $4,006 is less than or equal to $5,127, V1 = 0.20 multiplied by (T4 minus $4,006) Where T4 is greater than $5,127, V1 = 0.20 multiplied by (T4 minus $4,006) + 0.36 multiplied by (T4 minus $5,127) \\ 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 ($206 + Y)] minus [T4 + V1] If the result is negative, S = $0. Where: Y = The total of the following amounts: - $382 multiplied by the number of disabled dependants as indicated on Form TD1ON; and - $382 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, the Y factor should be implemented. \\ LCP = The lesser of: (i) $750; and (ii) 10% 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. For Prince Edward Island only: 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 2010 Prince Edward Island tax rates and income thresholds table. PAGE 43 \\\ 2010 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 Form TD1PE is not filed, TCP is $7,708. \\ K2P = [(0.098 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.098 multiplied by (P multiplied by EI, maximum $747.36))]* \\ * 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 30 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 province. 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 office will inform the employer or payer of the amount of K3P when it applies and 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 For Quebec only: Quebec employers whose employees receive income from tips and gratuities should review the section called "Example for employees in the hotel and restaurant business in Quebec" on page 59. Since Quebec collects its own provincial income tax and Quebec Pension Plan contributions, contact the ministère du Revenu du Québec for information on these subjects. The address and telephone numbers are listed on page 5 of this publication. For Saskatchewan only: 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 2010 Saskatchewan tax rates and income thresholds table. \\\ \\ 2010 Saskatchewan tax rates and income thresholds Annual taxable income A: More than $0 - Not more than $40,354 Rate V: 0.11 Constant KP: $0 More than 40,354 - Not more than 115,297 Rate V: 0.13 Constant KP: 807 More than 115,297 and over Rate V: 0.15 Constant KP: 3,113 \\\ \\ PAGE 44 K1P = 0.11 multiplied by TCP Where: \\ TCP = The total of personal non-refundable tax credits amounts reported on Form TD1SK. If Form TD1SK is not filed, TCP is $13,348. K2P = [(0.11 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.11 multiplied by (P multiplied by EI, maximum $747.36))]* \\ * 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 30 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 province. 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 office will inform the employer or payer of the amount of K3P when it applies and of 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. For Yukon only: 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 2010 Yukon tax rates and income thresholds table. \\\ \\ 2010 Yukon tax rates and income thresholds Annual taxable income A: More than $0 - Not more than $40,970 Rate V: 0.0704 Constant KP:$0 More than 40,970 - Not more than 81,941 Rate V: 0.0968 Constant KP:1,082 More than 81,941 - Not more than 127,021 Rate V: 0.1144 Constant KP:2,524 More than 127,021 and over Rate V: 0.1276 Constant KP:4,200 \\\ \\ K1P = 0.0704 multiplied by TCP Where: \\ TCP = The total of personal non-refundable tax credits amounts reported on Form TD1YT. If Form TD1YT is not filed, TCP is $10,382. K2P = [(0.0704 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.0704 multiplied by (P multiplied by EI, max. $747.36))]* \\ * 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 30 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 territory. 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 office will inform the employer or payer of the amount of K3P when it applies and how to implement the amount after the first pay period of the year. \\ K4P = The lesser of: PAGE 45 (i) 0.0704 multiplied by A and (ii) 0.0704 multiplied by $1,051 \\ Note For purposes of 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. For outside Canada and in Canada beyond the limits of any province only: 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. For employees in Quebec, outside Canada, and in Canada beyond the limits of any province only: 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 for employees in the hotel and restaurant business in Quebec" on page 59. 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 = Additional tax deductions for the pay period requested by the employee or pensioner as indicated on Form TD1. Note To cancel the election to have additional tax deducted, the employee or pensioner must 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. When an employee has not filed Form TD1X, tax is calculated in the same manner as regular salary. PAGE 46 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 reflect the same income and deduction amounts for each province and territory. We trust this measure will simplify the process of reviewing and testing calculations. In addition, the federal calculation has been shown only once, with the portion for each province and territory shown after. This method will avoid duplication and reduce the number of pages in this publication. For employees remunerated by commission only, see the example on page 57. \\ 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 $27,067 ($10,382 + $10,382 + $6,303). 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) $2,163.15 minus D; and = $2,163.15 (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 Determine EI using the following formula: EI = The lesser of: (i) $747.36 minus D1; and = $747.36 (ii) 0.0173 multiplied by IE = 0.0173 multiplied by $1,100 = $19.03 For employees in Quebec only: EI = The lesser of: (i) $587.52 minus D1; and PAGE 47 = $587.52 (ii) 0.0136 multiplied by IE = 0.0136 multiplied by $1,100 = $14.96 Step 2 Determine K1, K2, K2Q K3, and K4 using the following formula: K1 = 0.15 multiplied by TC = 0.15 multiplied by $27,067 = $4,060.05 K2 = [(0.15 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.15 multiplied by (P multiplied by EI, maximum $747.36))] = [(0.15 multiplied by (52 multiplied by $51.12, maximum $2,163.15)) + (0.15 multiplied by (52 multiplied by $19.03, maximum $747.36))] = [(0.15 multiplied by ($2,658.24, maximum $2,163.15)) + (0.15 multiplied by ($989.56, maximum $747.36))] = (0.15 multiplied by $2,163.15) + (0.15 multiplied by $747.36) = $324.47 + $112.10 = $436.57 K2Q = [(0.15 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.15 multiplied by (P multiplied by EI, maximum $587.52)) + (0.15 multiplied by (P multiplied by IE multiplied by 0.00506, max. $316.25))] = [(0.15 multiplied by (52 multiplied by $51.12, maximum $2,163.15)) + (0.15 multiplied by (52 multiplied by $14.96, maximum $587.52)) + (0.15 multiplied by (52 multiplied by $1,100 multiplied by 0.00506, maximum $316.25))] = [(0.15 ×multiplied by ($2,658.24, maximum $2,163.15)) + (0.15 multiplied by ($777.92, maximum $587.52)) + (0.15 multiplied by (289.43, maximum $316.25))] = (0.15 multiplied by $2,163.15) + (0.15 multiplied by $587.52) + (0.15 multiplied by $289.43) = $324.47 + $88.13 + $43.41 = $456.01 K3 = $0 K4 = The lesser of: (i) 0.15 multiplied by A; and (ii) 0.15 multiplied by $1,051 = $157.65 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 "2010 federal tax rates and income thresholds" table on page 29 and calculate the basic federal tax: A = $53,560.00 Federal R multiplied by 0.22 = $11,783.20 Less federal constant K minus 2,868.00 Federal tax $8,915.20 Less federal tax credits, K1 + K2 + K3 + K4 minus 4,654.27 Basic federal tax T3 $4,260.93 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 minus 300.00 Annual federal tax deduction, except for employees in Quebec, outside Canada, and in Canada beyond the limits of any province (T1) $3,960.93 PAGE 48 Example 1 - For Alberta See the section called "Example - Assumptions and federal calculation" on page 46 for more details. 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 K1P = 0.10 multiplied by TCP = 0.10 multiplied by $33,650 minus 3,365.00 K2P = [(0.10 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.10 multiplied by (P multiplied by EI, maximum $747.36))] = [(0.10 multiplied by $2,163.15) + (0.10 multiplied by $747.36)] = $216.32 + $74.74 minus 291.06 K3P = $0.00 Basic provincial tax for the year (T4) $1,699.94 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) $1,699.94 Step 6 Total federal and provincial tax deductions for the year: T1 (see federal portion of example) $3,960.93 + T2 = $5,660.87 T = Tax prorated for the pay period $108.86 Example 2 - For British Columbia See the section called "Example - Assumptions and federal calculation" on page 46 for more details. 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 = $947 minus 947.00 K1P = 0.0506 multiplied by TCP = 0.0506 multiplied by $20,653 minus 1,045.04 K2P = [(0.0506 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.0506 multiplied by (P multiplied by EI, maximum $747.36))] = [(0.0506 multiplied by $2,163.15) + (0.0506 multiplied by $747.36)] = $109.46 + $37.82 minus 147.28 K3P = $0.00 Basic provincial tax for the year (T4) $1,984.80 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 $29,541.50 PAGE 49 = $0.00 Net provincial tax deduction for the year before LCP $1,984.80 LCP = The lesser of: (i) $2,000; and (ii) 15% of the purchase of approved shares. 0.15 multiplied by $2,000 minus 300.00 Net provincial tax deduction for the year (T2) $1,684.80 Step 6 Total federal and provincial tax deductions for the year: T1 (see federal portion of example) $3,960.93 + T2 = $5,645.73 T = Tax prorated for the pay period $108.57 Example 3 - For Manitoba See the section called "Example - Assumptions and federal calculation" on page 46 for more details. 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 K1P = 0.108 multiplied by TCP = 0.108 multiplied by $16,268 = 1,756.94 K2P = [(0.108 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.108 multiplied by (P multiplied by EI, max. $747.36))] = [(0.108 multiplied by $2,163.15) + (0.108 multiplied by $747.36)] = $233.62 + $80.71 minus 314.33 K3P = $0.00 Basic provincial tax for the year (T4) = $4,152.63 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 $4,152.63 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) $3,852.63 Step 6 Total federal and provincial tax deductions for the year: T1 (see federal portion of example) $3,960.93 + T2 = $7,813.56 T = Tax prorated for the pay period $150.26 Example 4 - For New Brunswick See the section called "Example - Assumptions and federal calculation" on page 46 for more details. Step 5 Determine the basic provincial tax (T4) using the following formula: PAGE 50 (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 = $1,165 K1P = 0.093 multiplied by TCP = 0.093 multiplied by $16,230 = 1,509.39 K2P = [(0.093 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.093 multiplied by (P multiplied by EI, maximum $747.36))] = [(0.093 multiplied by $2,163.15) + (0.093 multiplied by$747.36)] = $201.17 + $69.50 = 270.67 K3P = $0.00 Basic provincial tax for the year (T4) $3,749.94 Determine the annual provincial tax deduction using the following formula: T2 = T4 + V1 - S - LCP V1 and S = $0.00 Net provincial tax deduction for the year before LCP $3,749.94 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) $3,349.94 Step 6 Total federal and provincial tax deductions for the year: T1 (see federal portion of example) $3,960.93 + T2 = $7,310.87 T = Tax prorated for the pay period $140.59 Example 5 - For Newfoundland and Labrador See the section called "Example - Assumptions and federal calculation" on page 46 for more details. 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) = 0.128 multiplied by $53,560 = $6,855.68 KP = $1,595 K1P = 0.077 multiplied by TCP = 0.077 multiplied by $14,233 = 1,095.94 K2P = [(0.077 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.077 multiplied by (P multiplied by EI, maximum $747.36))] = [(0.077 multiplied by $2,163.15) + (0.077 multiplied by $747.36)] = $166.56 + $57.55 minus 224.11 K3P = $0.00 Basic provincial tax for the year (T4) $3,940.63 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. PAGE 51 0.2 multiplied by $2,000 = 400.00 Net provincial tax deduction for the year (T2) $3,540.63 Step 6 Total federal and provincial tax deductions for the year: T1 (see federal portion of example) $3,960.93 + T2 = $7,501.56 T = Tax prorated for the pay period $144.26 Example 6 - For Northwest Territories See the section called "Example - Assumptions and federal calculation" on page 46 for more details. 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 = $1,002.00 K1P = 0.059 multiplied by TCP = 0.059 multiplied by $25,480 = 1,503.32 K2P = [(0.059 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.059 multiplied by (P multiplied by EI, maximum $747.36))] = [(0.059 multiplied by $2,163.15) + (0.059 multiplied by $747.36)] = $127.63 + $44.09 = 171.72 K3P = $0 0.00 Basic territorial tax for the year (T4) $1,929.12 Determine the annual territorial 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 $1,929.12 LCP = The lesser of: (i) $29,250; and (ii) 15% of the first $5,000 and 30% of the remainder of amounts deducted or withheld for the purchase of approved shares. 0.15 multiplied by $2,000 = 300.00 Net provincial tax deduction for the year (T2) $1,629.12 Step 6 Total federal and territorial tax deductions for the year: T1 (see federal portion of example) $3,960.93 + T2 = $5,590.05 T = Tax prorated for the pay period $107.50 Example 7 - For Nova Scotia See the section called "Example - Assumptions and federal calculation" on page 46 for more details. 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 PAGE 52 K1P = 0.0879 multiplied by TCP = 0.0879 multiplied by $15,220 = 1,337.84 K2P = [(0.0879 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.0879 multiplied by (P multiplied by EI, maximum $747.36))] = [(0.0879 multiplied by $2,163.15) + (0.0879 multiplied by $747.36)] = $190.14 + $65.69 minus 255.83 K3P = $0.00 Basic provincial tax for the year (T4) $4,590.55 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 $10,000, V1 = $0.00 S = $0.00 Net provincial tax deduction for the year before LCP $4,590.55 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) $4,190.55 Step 6 Total federal and provincial tax deductions for the year: T1 (see federal portion of example) $3,960.93 + T2 = $8,151.48 T = Tax prorated for the pay period $156.76 Example 8 - For Nunavut See the section called "Example - Assumptions and federal calculation" on page 46 for more details. 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 = $1,172 minus 1,172.00 K1P = 0.04 multiplied by TCP = 0.04 multiplied by $23,428 = 937.12 K2P = [(0.04 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.04 multiplied by (P multiplied by EI, maximum $747.36))] = [(0.04 multiplied by $2,163.15) + (0.04 multiplied by $747.36)] = $86.53 + $29.89 = 116.42 K3P = $0.00 Basic territorial tax for the year (T4) $1,523.66 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) $1,523.66 Step 6 Total federal and territorial tax deductions for the year: PAGE 53 T1 (see federal portion of example) $3,960.93 + T2 = $5,484.59 T = Tax prorated for the pay period $105.47 Example 9 - For Ontario See the section called "Example - Assumptions and federal calculation" on page 46 for more details. 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 = $1,521.00 K1P = 0.0505 multiplied by TCP = 0.0505 multiplied by $16,537 = 835.12 K2P = [(0.0505 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.0505 multiplied by (P multiplied by EI, maximum $747.36))] = [(0.0505 multiplied by $2,163.15) + (0.0505 multiplied by $747.36)] = $109.24 + $37.74 minus 146.98 K3P = $0.00 Basic provincial tax for the year (T4) $2,397.64 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 $4,006 V1 = $0.00 Sub-total $2,397.64 V2 = 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)) = $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; = $2,397.64; and (ii) [2 multiplied by ($206 + Y)] minus [T4 + V1] = [2 multiplied by ($206 + $1,146)] minus [$2,397.64 + $0] = [2 multiplied by $1,352] minus $2,397.64 = $2,704 minus $2,397.64 = $306.36 If the result is negative, S = $0 306.36 Net provincial tax deduction for the year before LCP $2,691.28 LCP = The lesser of: (i) $750; and (ii) 10% of the purchase of approved shares. 0.10 multiplied by $2,000 = 200.00 Net provincial tax deduction for the year (T2) $2,491.28 Step 6 Total federal and provincial tax deductions for the year: T1 (see federal portion of example) $3,960.93 + T2 = $6,452.21 PAGE 54 T = Tax prorated for the pay period $124.08 Example 10 - For Prince Edward Island See the section called "Example - Assumptions and federal calculation" on page 46 for more details. 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 K2P = [(0.098 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.098 multiplied by (P multiplied by EI, maximum $747.36))] = [(0.098 multiplied by $2,163.15) + (0.098 multiplied by $747.36)] = $211.99 + $73.24 = 285.23 K3P = $0.00 Basic provincial tax for the year (T4) $4,430.16 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) $4,430.16 Step 6 Total federal and provincial tax deductions for the year: T1 (see federal portion of example) $3,960.93 + T2 = $8,391.09 T = Tax prorated for the pay period $161.37 Example 11 - For Quebec See the section called "Example - Assumptions and federal calculation" on page 46 for more details. Step 5 Total federal tax deduction for the year using K2Q values (before the Quebec tax abatement) $3,941.49 Less Quebec tax abatement of 16.5% (0.165 multiplied by T3) = 699.85 Net federal tax deduction for the year (T1) $3,241.64 T = Tax prorated for the pay period $62.34 Example 12 - For Saskatchewan See the section called "Example - Assumptions and federal calculation" on page 46 for more details. Step 5 Determine the basic provincial tax (T4) using the following formula: (V multiplied by A) minus KP minus K1P minus K2P minus K3P PAGE 55 (V multiplied by A) = 0.13 multiplied by $53,560 = $6,962.80 KP = $807.00 K1P = 0.11 multiplied by TCP = 0.11 multiplied by $41,528 = 4,568.08 K2P = [(0.11 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.11 multiplied by (P multiplied by EI, maximum $747.36))] = [(0.11 multiplied by $2,163.15) + (0.11 multiplied by $747.36)] = $237.95 + $82.21 minus 320.16 K3P = $0.00 Basic provincial tax for the year (T4) $1,267.56 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 $1,267.56 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) $867.56 Step 6 Total federal and provincial tax deductions for the year: T1 (see federal portion of example) $3,960.93 + T2 = $4,828.49 T = Tax prorated for the pay period $92.86 Example 13 - For Yukon See the section called "Example - Assumptions and federal calculation" on page 46 for more details. 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 = $1,082.00 K1P = 0.0704 multiplied by TCP = 0.0704 multiplied by $27,067 = 1,905.52 K2P = [(0.0704 multiplied by (P multiplied by C, maximum $2,163.15)) + (0.0704 multiplied by (P multiplied by EI, maximum $747.36))] = [(0.0704 multiplied by $2,163.15) + (0.0704 multiplied by $747.36)] = $152.29 + $52.61 minus 204.90 K3P = $0.00 K4P = The lesser of: (i) 0.0704 multiplied by A; and (ii) 0.0704 multiplied by $1,051 0.0704 multiplied by $1,051 = 73.99 Basic territorial tax for the year (T4) $1,918.20 Determine the annual territorial tax deduction using the following formula: T2 = T4 + V1 minus S minus LCP PAGE 56 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 $1,918.20 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) $1,418.20 Step 6 Total federal and territorial tax deductions for the year: T1 (see federal portion of example) $3,960.93 + T2 = $5,379.13 T = Tax prorated for the pay period $103.44 Example 14 - For outside Canada and in Canada beyond the limits of any province See the section called "Example - Assumptions and federal calculation" on page 46 for more details. Step 5 Total federal tax deduction for the year before surtax for outside Canada or in Canada beyond the limits of any province (see federal portion of example) $3,960.93 Additional federal tax of 48% for employees working outside Canada or in Canada beyond the limits of any province (0.48 multiplied by T3) = 2,045.25 Total federal tax deduction for the year (T1) $6,006.18 T = Tax prorated for the pay period $115.50 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. Here are Julie's results for three different scenarios: \\\ Annual Income AB P = 12 I = $1,800 T= $140.43 P = 26 I = $2,300 T= $467.03 P = 52 I = $2,500 T = $704.21 BC P = 12 I = $1,800 T= $129.39 P = 26 I = $2,300 T= $426.54 P = 52 I = $2,500 T= $714.62 MB P = 12 I = $1,800 T = $220.99 P = 26 I = $2,300 T = $537.04 P = 52 I = $2,500 T = $832.68 NB P = 12 I = $1,800 T = $200.76 P = 26 I = $2,300 T = $513.83 P = 52 I = $2,500 T = $772.37 NL P = 12 I = $1,800 T = $191.41 P = 26 I = $2,300 T = $514.18 P = 52 I = $2,500 T = $800.60 NT P = 12 I = $1,800 T = $148.54 P = 26 I = $2,300 T = $436.69 P = 52 I = $2,500 T = $712.08 NS P = 12 I = $1,800 T = $199.85 P = 26 I = $2,300 T = $549.41 P = 52 I = $2,500 T = $857.03 NU P = 12 I = $1,800 T = $139.94 P = 26 I = $2,300 T = $406.36 P = 52 I = $2,500 T = $654.76 PAGE 57 ON P = 12 I = $1,800 T = $167.14 P = 26 I = $2,300 T = $464.94 P = 52 I = $2,500 T = $782.57 PE P = 12 I = $1,800 T = $214.30 P = 26 I = $2,300 T = $541.12 P = 52 I = $2,500 T = $839.06 QC P = 12 I = $1,800 T = $92.56* P = 26 I = $2,300 T = $260.62* P = 52 I = $2,500 T = $410.58* * Note: Quebec calculates provincial tax separately therefore only federal portion calculated. SK P = 12 I = $1,800 T = $175.23 P = 26 I = $2,300 T = $512.12 P = 52 I = $2,500 T = $772.90 YT P = 12 I = $1,800 T = $163.42 P = 26 I = $2,300 T = $455.13 P = 52 I = $2,500 T = $716.14 OC P = 12 I = $1,800 T = $164.60 P = 26 I = $2,300 T = $463.15 P = 52 I = $2,500 T = $728.40 \\\ Example for employees remunerated by commission only 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 $10,382 and on Form TD1SK $13,348. 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 purchased, 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. 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 $10,382 = $1,557.30 K2 = [(0.15 multiplied by (0.0495 multiplied by (I1 minus $3,500)*, maximum $2,163.15)) + (0.15 multiplied by ((0.0173 multiplied by I1), maximum $747.36))] * If the result is negative, substitute $0. = [(0.15 multiplied by (0.0495 multiplied by ($60,000 minus $3,500)*, maximum $2,163.15)) + (0.15 multiplied by (0.0173 multiplied by $60,000, maximum $747.36))] = [(0.15 multiplied by (0.0495 multiplied by $56,500, maximum $2,163.15)) + (0.15 multiplied by ($1,038, maximum $747.36))] = [(0.15 multiplied by ($2,796.75, maximum $2,163.15)) + (0.15 multiplied by $747.36)] = [(0.15 multiplied by $2,163.15) + $112.10] = $324.47 + $112.10 = $436.57 K3 = $0 K4 = The lesser of: (i) 0.15 multiplied by A; and (ii) 0.15 multiplied by $1,051 = 0.15 multiplied by $1,051 = $157.65 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 "2010 federal tax rates and income thresholds" table on page 29 and calculate the basic federal tax: A = $46,200.00 Federal R multiplied by 0.22 = $10,164.00 PAGE 58 Less federal constant K 2,868.00 Federal tax $7,296.00 Less federal tax credits, K1 + K2 + K3 + K4 = 2,151.52 Basic federal tax (T3) $5,144.48 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 (T1) $4,844.48 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 = $807.00 K1P = 0.11 multiplied by TCP = 0.11 multiplied by $13,348 = 1,468.28 K2P = [(0.11 multiplied by (0.0495 multiplied by (I1 minus $3,500)*, maximum $2,163.15)) + (0.11 multiplied by ((0.0173 multiplied by I1), maximum $747.36))] * If the result is negative, substitute $0. = [(0.11 multiplied by (0.0495 multiplied by ($60,000 minus $3,500)*, maximum $2,163.15)) + (0.11 multiplied by (0.0173 multiplied by $60,000, maximum $747.36))] = [(0.11 multiplied by (0.0495 multiplied by $56,500, maximum $2,163.15)) + (0.11 multiplied by ($1,038, maximum $747.36))] = [(0.11 multiplied by ($2,796.75, maximum $2,163.15)) + (0.11 multiplied by $747.36)] = [(0.11 multiplied by $2,163.15) + $82.21] = $237.95 + $82.21 = $320.16 K3P = $0.00 Basic provincial tax for the year (T4) $3,410.56 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 $3,410.56 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 $1,000 = 200.00 Net provincial tax deduction for the year (T2) $3,210.56 Step 7 Calculate the tax to be deducted on the commission payment of $1,500, factor G: PAGE 59 T = [(T1 + T2) divided by (I1 divided by G)] + L = [($4,844.48 + $3,210.56 divided by ($60,000 divided by $1,500)] + $0 = $8,055.04 divided by 40 + $0 = $201.38 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 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 personal tax returns. 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. Once 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. PAGE 60 Example This is an example of an employee in the hotel and restaurant business in Quebec. The employer uses 26 (bi-weekly) 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, 2010. 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 = $10.47 K2 = $178.69 C = $31.45 K1 = $1,557.30 T1 = $926.32 K4 = $157.65 Step 2 - Additional 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 $10.47 minus ($926.32 divided by 26). If negative, N = $0. = $70 minus $10.47 minus $35.63 = $23.90 CQ = The maximum QPP deduction based on available net pay. = The lesser of: (i) $31.45, the QPP contribution for the pay period; and (ii) $23.90, the net pay available for the QPP deduction. = $23.90 K2Q = Federal tax credit for the year based on the QPP deduction (CQ). = [(0.15 multiplied by (P multiplied by CQ, maximum $2,163.15)) + (0.15 multiplied by (P multiplied by EI, maximum $587.52)) = [(0.15 multiplied by (26 multiplied by $23.90, maximum $2,163.15)) + (0.15 multiplied by (26 multiplied by $10.47, maximum $587.52)) = (0.15 multiplied by $621.40) + (0.15 multiplied by $272.22) = $93.21 + $40.83 = $134.04 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 $1,557.30 minus $134.04 minus $0 minus $157.65 = $3,003.00 minus $1,557.30 minus $134.04 minus $157.65 = $1,154.01 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. = ($1,154.01 minus $0) minus ($1,154.01 multiplied by 0.165) = $1,154.01 minus $190.41 = $963.60 Step 3 - Adjusted federal tax deduction for the pay period T = The greater of: (i) (T1 divided by P) + L, = ($926.32 divided by 26) + $0 = $35.63, and (ii) (T1Q divided by P) + L = ($963.60 divided by 26) + $0 = $37.06 PAGE 61 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 $10.47 (EI) minus $37.06 (revised tax) = $22.47 (available net pay). Therefore, the employee's QPP deduction is $22.47. Although this QPP deduction is less than the $23.90 QPP amount used in the revised tax calculation, a second or subsequent recalculation of federal tax is not required. Include the $22.47 QPP deduction in your remittance to the ministère du Revenu du Québec. Include the $10.47 EI deduction and the $37.06 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 fluctuates 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 previously 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 acronym YTD used in this option means year-to-date, and will include payments or deductions for the current year, but will exclude 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 remaining 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 remaining. 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). Calculation of tax for the pay period When you calculate tax in Option 2, you calculate the tax on the projected income for the year, then find the tax amount that is proportional to the number of pay periods that have actually occurred (including the current pay period). Compare the result to the tax actually 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 the employer 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 over 1 instead of 52 over 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 commences 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. It is recommended that you reduce this impact by resetting the S1 factor or by averaging the tax increase or decrease over the remaining pay periods. PAGE 62 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 individual income tax return for the year. The employee or pensioner may ask for additional 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. See the chart below for examples. See also the additional information under "Special situations" on page 61. \\\ 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 (RPP) for current and past services, a registered retirement savings plan (RRSP), or a retirement compensation arrangement (RCA) plus FYTD. Note We have not repeated the entire explanation for this factor. Refer to the description under Option 1 for full details. 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. Note We have not repeated the entire explanation for this factor. Refer to the description under Option 1 for full details. U1 = Union dues for the pay period plus U1YTD. B1 = Year-to-date (prior to this pay period) non-periodic payments such as a 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. Refer to "Option 2 - Step-by step example when calculating tax deductions separately on periodic and non-periodic payments" on page 66 for an illustration. 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 wish to make deductions such as RRSP contributions from the bonus payment then refer to the instructions in Option 1, page 32, regarding the use of the additional factors F3 and F4. PAGE 63 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, and 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 it is applicable. 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. For employees in Quebec only: 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 applicable to the annual taxable income A. See the "2010 federal tax rates and income thresholds" table below. \\\ \\2010 federal tax rates and income thresholds Annual taxable income A: More than $0 - Not more than $40,970 Rate R: 0.15 Constant K: $0 More than 40,970 - Not more than 81,941 Rate R: 0.22 Constant K: 2,868 More than 81,941 - Not more than 127,021 Rate R: 0.26 Constant K: 6,146 More than 127,021 and over Rate R: 0.29 Constant K: 9,956 \\\ \\ A = Projected annual taxable income. K = Federal constant to adjust application of the federal rate to the total annual taxable income A. See the "2010 federal tax rates and income thresholds" 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 "2010 federal tax rates and income thresholds" table above. 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 $10,382, 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 2009, see the section called "Indexing of personal amounts" on page 15. \\ 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 (or Quebec) 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 $2,163.15)) + (0.15 multiplied by (0.0173 multiplied by((S1 multiplied by IE) + B1), maximum $747.36))] \\ PAGE 64 For employees in Quebec only: \\ K2Q = Quebec Pension Plan contributions, Employment Insurance premiums, and provincial parental insurance plan premiums federal tax credits for the year. = [(0.15 multiplied by (0.0495 multiplied by ((S1 multiplied by PI) + B1 minus $3,500)*, maximum $2,163.15)) + (0.15 multiplied by (0.0136 multiplied by ((S1 multiplied by IE) + B1), max. $587.52)) + (0.15 multiplied by (0.00506 multiplied by S1 multiplied by IE) + B1), maximum $316.25))] \\ 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 $1,051 \\ Note For purposes of 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. = (T3 minus LCF)* * If the result is negative, substitute $0. For Quebec only: T1 = (T3 minus LCF)* minus (0.165 multiplied by T3) * If the result is negative, substitute $0. For outside Canada or in Canada beyond the limits of any province only: T1 = [T3 + (0.48 multiplied by T3) minus LCF]* * If the result is negative, substitute $0. 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. PAGE 65 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, 2010, 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 $2,163.15)) + (lowest provincial or territorial tax rate multiplied by (0.0173 multiplied by ((S1 multiplied by IE) + B1), maximum $747.36))] \\ * 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 is applicable to the employee or pensioner. For Quebec only: T2 = $0 For outside Canada or in Canada beyond the limits of any province only: 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. For employees in Quebec, outside Canada, and in Canada beyond the limits of any province only: 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 for employees in the hotel and restaurant business in Quebec" on page 59. 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. Exclude any year-to-date additional tax deductions requested by the employee, factor L. Tax previously deducted on non-periodic payments such as bonuses, is included in factor M1. M1 = Accumulated federal and provincial (or territorial) tax deductions on non-periodic payments such as bonuses, if any, to the last pay period. Exclude any year-to-date additional tax deductions for the year requested by the employee, factor L, and 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). page 66 Step 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 and excluding B payable now = [S1 multiplied by (I minus F minus F2 minus U1)] + B1 minus HD minus F1 L = Additional tax deductions for the pay period as reported on Form TD1. Note To cancel the election to have additional tax deducted, the employee or pensioner must file a new Form TD1 entering $0 at the item "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 71. 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 $736.19 and the year- to-date tax on previous bonuses (M1) is $33.30. In this example, the TD1 forms filed by the employee are for January 2010. They show total federal personal tax credits of $10,382 (TC) and provincial personal tax credits of $8,231 (TCP). All of the employee's income is subject to CPP and EI deductions. This example illustrates 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 over 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 $10,382 = $1,557.30 K2 = [(0.15 multiplied by (0.0495 multiplied by ((S1 multiplied by PI) + B1 + B minus $3,500)*, maximum $2,163.15)) + (0.15 multiplied by (0.0173 multiplied by ((S1 multiplied by IE) + B1 + B), maximum $747.36))] * If the result is negative, substitute $0. = [(0.15 multiplied by (0.0495 multiplied by (($18,209.29 minus $3,500)*, maximum $2,163.15)) + (0.15 multiplied by (0.0173 multiplied by $18,209.29, maximum $747.36))] = [(0.15 multiplied by $728.11) + (0.15 multiplied by $315.02)] = $109.22 + $47.25 = $156.47 PAGE 67 K3 = $0 K4 = The lesser of: (i) 0.15 multiplied by A; and (ii) 0.15 multiplied by $1,051 = 0.15 multiplied by $1,051 = $157.65 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 $1,557.30 minus $156.47 minus $0 minus $157.65 = $2,731.39 minus $0 minus $1,557.30 minus $156.47 minus $0 minus $157.65 = $859.97 Determine the total federal tax deduction for the year: T1 = (T3 minus LCF)* * If the result is negative, substitute $0. = $859.97 minus $0 = $859.97 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 "2010 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 $8,231 = $723.50 K2P = [(0.0879 multiplied by (0.0495 multiplied by ((S1 multiplied by PI) + B1 + B minus $3,500)*, maximum $2,163.15)) + (0.0879 multiplied by (0.0173 multiplied by ((S1 multiplied by IE) + B1 + B), maximum $747.36))] * If the result is negative, substitute $0. = [(0.0879 multiplied by (0.0495 multiplied by $18,209.29 minus $3,500)*, maximum $2,163.15)) + (0.0879 multiplied by (0.0173 multiplied by $18,209.29, maximum $747.36))] = [(0.0879 multiplied by $728.11) + (0.0879 multiplied by $315.02)] = $64.00 + $27.69 = $91.69 K3P = $0 T4 = (V multiplied by A) minus KP minus K1P minus K2P minus K3P = $1,600.60 minus $0 minus $723.50 minus $91.69 minus $0 = $785.41 T2 = T4 + V1 minus S minus LCP If the result is negative, T2 = $0. = $785.41 + $0 minus $0 minus $0 = $785.41 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 PAGE 68 = $1,557.30 K2 = [(0.15 multiplied by (0.0495 multiplied by ((S1 multiplied by PI) + B1 minus $3,500)*, maximum $2,163.15)) + (0.15 multiplied by (0.0173 multiplied by ((S1 multiplied by IE) + B1), maximum $747.36))] * If the result is negative, substitute $0. = [(0.15 multiplied by $703.36) + (0.15 multiplied by $306.37)] = $151.46 K3 = $0 K4 = 0.15 multiplied by $1,051 = $157.65 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 $1,557.30 minus $151.46 minus $0 minus $157.65 = $789.98 T1 = T3 minus LCF = $789.98 minus $0 = $789.98 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 "2010 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 = $723.50 K2P = [(0.0879 multiplied by (0.0495 multiplied by ((S1 multiplied by PI) + B1 minus $3,500)*, maximum $2,163.15)) + (0.0879 multiplied by (0.0173 multiplied by ((S1 multiplied by IE) + B1), maximum $747.36))] * If the result is negative, substitute $0. = [(0.0879 multiplied by $703.36) + (0.0879 multiplied by $306.37)] = $88.76 K3P = $0 T4 = (V multiplied by A) minus KP minus K1P minus K2P minus K3P = $1,556.65 minus $0 minus $723.50 minus $88.76 minus $0 = $744.39 T2 = T4 + V1 minus S minus LCP If the result is negative, T2 = $0. = $744.39 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. = [(($789.98 + 744.39 minus $33.30) multiplied by 14 divided by 26) minus $736.19] + $0 = [($1,534.37 multiplied by 14 divided by 26) minus $736.19] + $0 = [$808.27 minus $736.19] + $0 = $72.08 Step 4 - Calculation of tax deduction on current bonus payment (TB) TB = (T1 + T2 in Step 1) minus (T1 + T2 in Step 2) PAGE 69 = ($859.97 + $785.41) minus ($789.98 + $744.39) = $1,645.38 minus $1,534.37 = $111.01 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 when calculating separately the tax on regular salary and on non-periodic payments. A bi- weekly (26) pay period and the optional non-periodic payment formula are used in these examples. PAGE 70 Option 2 - Examples when calculating the tax deductions on salary and non- periodic payments separately (continued) *** Transcriber's Note: In print for pages 69 to 82, all of the following provinces and territories, except for Quebec and Outside Canada, these examples are set-up as 15 columns, labelled as: PP; Salary $; I YTD $; B Current $; B YTD $; A $; K1 + K2 + K4 $; T1 $; K1P + K2P $; T2 $; M1 $; (T1 + T2 minus M1) divided by S1 $; M $; T $; TB $. Please read as: *** Alberta PP 1 Salary: 740 I YTD: 740 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 1,793.70 T2: 130.30 (T1 + T2 minus M1) divided by S1: 43.64 T: 43.64 PP 2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 1,793.70 T2: 130.30 (T1 + T2 minus M1) divided by S1: 87.27 M: minus 43.64 T: 43.63 PP 3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 1,793.70 T2: 130.30 (T1 + T2 minus M1) divided by S1: 130.91 M: minus 87.27 T: 43.64 PP 4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 1,793.70 T2: 130.30 (T1 + T2 minus M1) divided by S1: 174.55 M: minus 130.91 T: 43.64 PP 4B I YTD: 2,960 B Current: 100 B1: 100 A: 19,340.00 K1 + K2 + K4: 1,882.75 T1: 1,018.25 K1P + K2P: 1,794.37 T2: 139.63 (T1 + T2 minus M1) divided by S1: see* M: minus 174.55 TB: 23.33 PP 5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 + K2 + K4: 1,879.63 T1: 974.57 K1P + K2P: 1,792.28 T2: 110.52 M1: minus 23.33 (T1 + T2 minus M1) divided by S1: 204.18 M: minus 174.55 T: 29.63 PP 6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 + K2 + K4: 1,870.16 T1: 842.34 K1P + K2P: 1,785.97 T2: 22.36 M1: minus 23.33 (T1 + T2 minus M1) divided by S1: 194.16 M: minus 240.18 T: 0.00 PP 7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 + K2 + K4: 1,869.72 T1: 836.28 K1P + K2P: 1,785.68 T2: 18.32 M1: minus 23.33 (T1 + T2 minus M1) divided by S1: 223.80 M: minus 204.18 T: 19.62 PP 7B I YTD: 4,830 B Current: 50 B1: 150 A: 18,090.00 K1 + K2 + K4: 1,870.22 T1: 843.28 K1P + K2P: 1,786.02 T2: 22.98 M1: minus 23.33 (T1 + T2 minus M1) divided by S1: see* M: minus 223.80 TB: 11.66 PP 8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 + K2 + K4: 1,869.90 T1: 838.73 K1P + K2P: 1,785.80 T2: 19.95 M1: minus 34.99 (T1 + T2 minus M1) divided by S1: 253.44 M: minus 223.80 T: 29.64 PP 9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 + K2 + K4: 1,869.64 T1: 835.19 K1P + K2P: 1,785.63 T2: 17.59 M1: minus 34.99 (T1 + T2 minus M1) divided by S1: 283.08 M: minus 253.44 T: 29.64 PP 10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 + K2 + K4: 1,869.44 T1: 832.36 K1P + K2P: 1,785.49 T2: 15.71 M1: minus 34.99 (T1 + T2 minus M1) divided by S1: 312.72 M: minus 283.08 T: 29.64 PP 11 Salary: 680 I YTD: 7,550 B: 150 A: 17,995.45 K1 + K2 + K4: 1,869.28 T1: 830.04 K1P + K2P: 1,785.38 T2: 17.17 M1: minus 34.99 (T1 + T2 minus M1) divided by S1: 342.36 M: minus 312.72 T: 29.64 PP 12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 + K2 + K4: 1,864.91 T1: 768.97 K1P + K2P: 1,782.47 M1: minus 34.99 (T1 + T2 minus M1) divided by S1: 338.76 M: minus 342.36 T: 0.00 PP 13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 + K2 + K4: 1,865.11 T1: 771.89 K1P + K2P: 1,782.61 M1: minus 34.99 (T1 + T2 minus M1) divided by S1: 368.45 M: minus 342.36 T: 26.09 PP 14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 + K2 + K4: 1,866.41 T1: 789.98 K1P + K2P: 1,783.48 M1: minus 34.99 (T1 + T2 minus M1) divided by S1: 406.53 M: minus 368.45 T: 38.08 PP 14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1 + K2 + K4: 1,871.42 T1: 859.97 K1P + K2P: 1,786.81 T2: 34.12 M1: minus 34.99 (T1 + T2 minus M1) divided by S1: see* M: minus 406.53 TB: 104.11 PP 15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 + K2 + K4: 1,871.50 T1: 861.10 K1P + K2P: 1,786.87 T2: 34.86 M1: minus 139.10 (T1 + T2 minus M1) divided by S1: 436.65 M: minus 406.53 T: 30.12 PP 16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 + K2 + K4: 1,871.57 T1: 862.09 K1P + K2P: 1,786.92 T2: 35.52 M1: minus 139.10 (T1 + T2 minus M1) divided by S1: 466.78 M: minus 436.65 T: 30.13 PP 17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 + K2 + K4: 1,871.63 T1: 862.96 K1P + K2P: 1,786.96 T2: 36.10 M1: minus 139.10 (T1 + T2 minus M1) divided by S1: 496.90 M: minus 466.78 T: 30.12 PP 18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 + K2 + K4: 1,871.69 T1: 963.73 K1P + K2P: 1,786.99 T2: 36.62 M1: minus 139.10 (T1 + T2 minus M1) divided by S1: 527.02 M: minus 496.90 T: 30.12 PP 19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 + K2 + K4: 1,871.74 T1: 864.42 K1P + K2P: 1,787.03 T2: 37.08 M1: minus 139.10 (T1 + T2 minus M1) divided by S1: 557.14 M: minus 527.02 T: 30.12 PP 20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 + K2 + K4: 1,871.79 T1: 865.04 K1P + K2P: 1,787.06 T2: 37.49 M1: minus 139.10 (T1 + T2 minus M1) divided by S1: 587.25 M: minus 557.14 T: 30.11 PP 21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 + K2 + K4: 1,871.83 T1: 865.60 K1P + K2P: 1,787.08 T2: 37.87 M1: minus 139.10 (T1 + T2 minus M1) divided by S1: 617.38 M: minus 587.25 T: 30.13 PP 22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 + K2 + K4: 1,871.86 T1: 866.12 K1P + K2P: 1,787.11 T2: 38.21 M1: minus 139.10 (T1 + T2 minus M1) divided by S1: 647.50 M: minus 617.38 T: 30.12 PP 23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 + K2 + K4: 1,871.90 T1: 866.58 K1P + K2P: 1,787.13 T2: 38.52 M1: minus 139.10 (T1 + T2 minus M1) divided by S1: 677.62 M: minus 647.50 T: 30.12 PP 24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 + K2 + K4: 1,871.92 T1: 867.02 K1P + K2P: 1,787.15 T2: 38.81 M1: minus 139.10 (T1 + T2 minus M1) divided by S1: 707.75 M: minus 677.62 T: 30.13 PP 25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 + K2 + K4: 1,871.95 T1: 867.41 K1P + K2P: 1,787.16 T2: 39.08 M1: minus 139.10 (T1 + T2 minus M1) divided by S1: 737.88 M: minus 707.75 T: 30.13 PP 26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 + K2 + K4: 1,871.98 T1: 867.77 K1P + K2P: 1,787.19 T2: 39.31 M1: minus 139.10 (T1 + T2 minus M1) divided by S1: 767.98 M: minus 737.88 T: 30.10 Total tax deducted for the year on regular salary $767.98 Total tax deducted for the year on non-periodic payments 139.10 Total tax deducted for the year on salary and non-periodic payments $907.08 * 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 66. YTD = year-to-date PAGE 71 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: 1,881.75 T1: 1,004.25 K1P + K2P: 612.86 T2: 31.03 (T1+T2 minus M1) divided by S1: 39.82 T: 39.82 PP: 2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 612.86 T2: 31.03 (T1+T2 minus M1) divided by S1: 79.64 M: minus 39.82 T: 39.82 PP: 3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 612.86 T2: 31.03 (T1+T2 minus M1) divided by S1: 119.46 M: minus 79.64 T: 39.82 PP: 4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 612.86 T2: 31.03 (T1+T2 minus M1) divided by S1: 159.27 M: minus 119.46 T: 39.81 PP: 4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1 + K2 + K4: 1,882.75 T1: 1,018.25 K1P + K2P: 613.20 T2: 38.95 (T1+T2 minus M1) divided by S1: see* M: minus 159.27 TB: 21.92 PP: 5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 + K2 + K4: 1,879.63 T1: 974.57 K1P + K2P: 612.15 T2: 14.24 M1: minus 21.92 (T1+T2 minus M1) divided by S1: 185.94 M: minus 159.27 T: 26.67 PP: 6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 + K2 + K4: 1,870.16 T1:842.34 K1P + K2P: 608.96 M1: minus 21.92 (T1+T2 minus M1) divided by S1: 189.33 M: minus 185.94 T: 3.39 PP: 7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 + K2 + K4: 1,869.72 T1: 836.28 K1P + K2P: 608.81 M1: minus 21.92 (T1+T2 minus M1) divided by S1: 219.25 M: minus 189.33 T: 29.92 PP: 7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1 + K2 + K4: 1,870.22 T1: 843.28 K1P + K2P: 608.98 M1: minus 21.92 (T1+T2 minus M1) divided by S1: see* M: minus 219.25 TB: 7.00 PP: 8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 + K2 + K4: 1,869.90 T1: 838.73 K1P + K2P: 608.87 M1: minus 28.92 (T1+T2 minus M1) divided by S1: 249.17 M: minus 219.25 T: 29.92 PP: 9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 + K2 + K4: 1,869.64 T1: 835.19 K1P + K2P: 608.79 M1: minus 28.92 (T1+T2 minus M1) divided by S1: 279.09 M: minus 249.17 T: 29.92 PP: 10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 + K2 + K4: 1,869.44 T1: 832.36 K1P + K2P: 608.72 M1: minus 28.92 (T1+T2 minus M1) divided by S1: 309.02 M: minus 279.09 T: 29.93 PP: 11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1 + K2 + K4: 1,869.28 T1: 830.04 K1P + K2P: 608.66 M1: minus 28.92 (T1+T2 minus M1) divided by S1: 338.94 M: minus 309.02 T: 29.92 PP: 12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 + K2 + K4: 1,864.91 T1: 768.97 K1P + K2P: 607.18 M1: minus 28.92 (T1+T2 minus M1) divided by S1: 341.56 M: minus 338.94 T: 2.62 PP: 13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 + K2 + K4: 1,865.11 T1: 771.89 K1P + K2P: 607.26 M1: minus 28.92 (T1+T2 minus M1) divided by S1: 371.49 M: minus 341.56 T: 29.93 PP: 14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 + K2 + K4: 1,866.41 T1: 789.98 K1P + K2P: 607.69 M1: minus 28.92 (T1+T2 minus M1) divided by S1: 409.80 M: minus 371.49 T: 38.31 PP: 14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1 + K2 + K4: 1,871.42 T1: 859.97 K1P + K2P: 609.38 M1: minus 28.92 (T1+T2 minus M1) divided by S1: see* M: minus 409.80 TB: 69.99 PP: 15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 + K2 + K4: 1,871.50 T1: 861.10 K1P + K2P: 609.41 M1: minus 98.91 (T1+T2 minus M1) divided by S1: 439.73 M: minus 409.80 T: 29.93 PP: 16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 + K2 + K4: 1,871.57 T1: 862.09 K1P + K2P: 609.43 M1: minus 98.91 (T1+T2 minus M1) divided by S1: 469.65 M: minus 439.73 T: 29.92 PP: 17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 + K2 + K4: 1,871.63 T1: 862.96 K1P + K2P: 609.46 M1: minus 98.91 (T1+T2 minus M1) divided by S1: 499.57 M: minus 469.65 T: 29.92 PP: 18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 + K2 + K4: 1,871.69 T1: 863.73 K1P + K2P: 609.47 M1: minus 98.91 (T1+T2 minus M1) divided by S1: 529.49 M: minus 499.57 T: 29.92 PP: 19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 + K2 + K4: 1,871.74 T1: 864.42 K1P + K2P: 609.49 M1: minus 98.91 (T1+T2 minus M1) divided by S1: 559.41 M: minus 529.49 T: 29.92 PP: 20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 + K2 + K4: 1,871.79 T1: 865.04 K1P + K2P: 609.50 M1: minus 98.91 (T1+T2 minus M1) divided by S1: 589.33 M: minus 559.41 T: 29.92 PP: 21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 + K2 + K4: 1,871.83 T1: 865.60 K1P + K2P: 609.52 M1: minus 98.91 (T1+T2 minus M1) divided by S1: 619.25 M: minus 589.33 T: 29.92 PP: 22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 + K2 + K4: 1,871.86 T1: 866.12 K1P + K2P: 609.53 M1: minus 98.91 (T1+T2 minus M1) divided by S1: 649.18 M: minus 619.25 T: 29.93 PP: 23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 + K2 + K4: 1,871.90 T1: 866.58 K1P + K2P: 609.54 M1: minus 98.91 (T1+T2 minus M1) divided by S1: 679.09 M: minus 649.18 T: 29.91 PP: 24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 + K2 + K4: 1,871.92 T1: 867.02 K1P + K2P: 609.55 M1: minus 98.91 (T1+T2 minus M1) divided by S1: 709.02 M: minus 679.09 T: 29.93 PP: 25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 + K2 + K4: 1,871.95 T1: 867.41 K1P + K2P: 609.57 M1: minus 98.91 (T1+T2 minus M1) divided by S1: 738.94 M: minus 709.02 T: 29.92 PP: 26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 + K2 + K4: 1,871.98 T1: 867.77 K1P + K2P: 609.57 M1: minus 98.91 (T1+T2 minus M1) divided by S1: 768.86 M: minus 738.94 T: 29.92 Total tax deducted for the year on regular salary $768.86 Total tax deducted for the year on non-periodic payments 98.91 Total tax deducted for the year on salary and non-periodic payments $867.77 * 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 66. YTD = year-to-date PAGE 72 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: 1,881.75 T1: 1,004.25 K1P+ K2P: 998.57 T2: 1,079.35 (T1+T2 minus M1) divided by S1: 80.14 T: 80.14 PP: 2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P+ K2P: 998.57 T2: 1,079.35 (T1+T2 minus M1) divided by S1: 160.28 M: minus 80.14 T: 80.14 PP: 3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P+ K2P: 998.57 T2: 1,079.35 (T1+T2 minus M1) divided by S1: 240.42 M: minus 160.28 T: 80.14 PP: 4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P+ K2P: 998.57 T2: 1,079.35 (T1+T2 minus M1) divided by S1: 320.55 M: minus 240.42 T: 80.13 PP: 4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1 + K2 + K4: 1,882.75 T1: 1,018.25 K1P+ K2P: 999.28 T2: 1,089.44 (T1+T2 minus M1) divided by S1: see* M: minus 320.55 TB: 24.09 PP: 5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 + K2 + K4: 1,879.63 T1: 974.57 K1P+ K2P: 997.03 T2: 1,057.99 M1: minus 24.09 (T1+T2 minus M1) divided by S1: 386.24 M: minus 320.55 T: 65.69 PP: 6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 + K2 + K4: 1,870.16 T1: 842.34 K1P+ K2P: 990.22 T2: 962.78 M1: minus 24.09 (T1+T2 minus M1) divided by S1: 411.01 M: minus 386.24 T: 24.77 PP: 7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 + K2 + K4: 1,869.72 T1: 836.28 K1P+ K2P: 989.91 T2: 958.41 M1: minus 24.09 (T1+T2 minus M1) divided by S1: 476.70 M: minus 411.01 T: 65.69 PP: 7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1 + K2 + K4: 1,870.22 T1: 843.28 K1P+ K2P: 990.27 T2: 963.45 M1: minus 24.09 (T1+T2 minus M1) divided by S1: see* M: minus 476.70 TB: 12.04 PP: 8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 + K2 + K4: 1,869.90 T1: 838.73 K1P+ K2P: 990.03 T2: 960.18 M1: minus 36.13 (T1+T2 minus M1) divided by S1: 542.39 M: minus 476.70 T: 65.69 PP: 9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 + K2 + K4: 1,869.64 T1: 835.19 K1P+ K2P: 989.85 T2: 957.63 M1: minus 36.13 (T1+T2 minus M1) divided by S1: 608.09 M: minus 542.39 T: 65.70 PP: 10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 + K2 + K4: 1,869.44 T1: 832.36 K1P+ K2P: 989.70 T2: 955.60 M1: minus 36.13 (T1+T2 minus M1) divided by S1: 673.78 M: minus 608.09 T: 65.69 PP: 11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1 + K2 + K4: 1,869.28 T1: 830.04 K1P+ K2P: 989.58 T2: 953.93 M1: minus 36.13 (T1+T2 minus M1) divided by S1: 739.47 M: minus 673.78 T: 65.69 PP: 12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 + K2 + K4: 1,864.91 T1: 768.97 K1P+ K2P: 986.44 T2: 909.95 M1: minus 36.13 (T1+T2 minus M1) divided by S1: 758.21 M: minus 739.47 T: 18.74 PP: 13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 + K2 + K4: 1,865.11 T1: 771.89 K1P+ K2P: 986.59 T2: 912.05 M1: minus 36.13 (T1+T2 minus M1) divided by S1: 823.91 M: minus 758.21 T: 65.70 PP: 14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 + K2 + K4: 1,866.41 T1: 789.98 K1P+ K2P: 987.52 T2: 925.08 M1: minus 36.13 (T1+T2 minus M1) divided by S1: 904.04 M: minus 823.91 T: 80.13 PP: 14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1 + K2 + K4: 1,871.42 T1: 859.97 K1P+ K2P: 991.13 T2: 975.47 M1: minus 36.13 (T1+T2 minus M1) divided by S1: see* M: minus 904.04 TB: 120.38 PP: 15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 + K2 + K4: 1,871.50 T1: 861.10 K1P+ K2P: 991.19 T2: 976.28 M1: minus 156.51 (T1+T2 minus M1) divided by S1: 969.73 M: minus 904.04 T: 65.69 PP: 16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 + K2 + K4: 1,871.57 T1: 862.09 K1P+ K2P: 991.24 T2: 976.99 M1: minus 156.51 (T1+T2 minus M1) divided by S1: 1,035.43 M: minus 969.73 T: 65.70 PP: 17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 + K2 + K4: 1,871.63 T1: 862.96 K1P+ K2P: 991.28 T2: 977.62 M1: minus 156.51 (T1+T2 minus M1) divided by S1: 1,101.12 M: minus 1,035.43 T: 65.69 PP: 18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 + K2 + K4: 1,871.69 T1: 863.73 K1P+ K2P: 991.32 T2: 978.18 M1: minus 156.51 (T1+T2 minus M1) divided by S1: 1,166.82 M: minus 1,101.12 T: 65.70 PP: 19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 + K2 + K4: 1,871.74 T1: 864.42 K1P+ K2P: 991.36 T2: 978.67 M1: minus 156.51 (T1+T2 minus M1) divided by S1: 1,232.50 M: minus 1,166.82 T: 65.68 PP: 20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 + K2 + K4: 1,871.79 T1: 865.04 K1P+ K2P: 991.39 T2: 979.12 M1: minus 156.51 (T1+T2 minus M1) divided by S1: 1,298.19 M: minus 1,232.50 T: 65.69 PP: 21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 + K2 + K4: 1,871.83 T1: 865.60 K1P+ K2P: 991.42 T2: 979.53 M1: minus 156.51 (T1+T2 minus M1) divided by S1: 1,363.89 M: minus 1,298.19 T: 65.70 PP: 22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 + K2 + K4: 1,871.86 T1: 866.12 K1P+ K2P: 991.44 T2: 979.90 M1: minus 156.51 (T1+T2 minus M1) divided by S1: 1,429.59 M: minus 1,363.89 T: 65.70 PP: 23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 + K2 + K4: 1,871.90 T1: 866.58 K1P+ K2P: 991.47 T2: 980.23 M1: minus 156.51 (T1+T2 minus M1) divided by S1: 1,495.27 M: minus 1,429.59 T: 65.68 PP: 24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 + K2 + K4: 1,871.92 T1: 867.02 K1P+ K2P: 991.49 T2: 980.54 M1: minus 156.51 (T1+T2 minus M1) divided by S1: 1,560.97 M: minus 1,495.27 T: 65.70 PP: 25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 + K2 + K4: 1,871.95 T1: 867.41 K1P+ K2P: 991.51 T2: 980.83 M1: minus 156.51 (T1+T2 minus M1) divided by S1: 1,626.66 M: minus 1,560.97 T: 65.69 PP: 26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 + K2 + K4: 1,871.98 T1: 867.77 K1P+ K2P: 991.53 T2: 981.09 M1: minus 156.51 (T1+T2 minus M1) divided by S1: 1,692.35 M: minus 1,626.66 T: 65.69 Total tax deducted for the year on regular salary $1,692.35 Total tax deducted for the year on non-periodic payments 156.51 Total tax deducted for the year on salary and non-periodic payments $1,848.86 * 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 66. YTD = year-to-date PAGE 73 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: 1,881.75 T1: 1,004.25 K1P + K2P: 919.68 T2: 869.64 (T1+T2 minus M1) divided by S1: 72.07 T: 72.07 PP:2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 919.68 T2: 869.64 (T1+T2 minus M1) divided by S1: 144.15 M: minus 72.07 T: 72.08 PP:3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 919.68 T2: 869.64 (T1+T2 minus M1) divided by S1: 216.22 M: minus 144.15 T: 72.07 PP:4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 919.68 T2: 869.64 (T1+T2 minus M1) divided by S1:288.29 M: minus 216.22 T: 72.07 PP:4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1 + K2 + K4: 1,882.75 T1: 1,018.25 K1P + K2P: 920.30 T2: 878.32 (T1+T2 minus M1) divided by S1: see* M: minus 288.29 TB: 22.68 PP:5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 + K2 + K4: 1,879.63 T1: 974.57 K1P + K2P: 918.35 T2: 851.25 M1: minus 22.68 (T1+T2 minus M1) divided by S1: 346.76 M: minus 288.29 T: 58.47 PP:6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 + K2 + K4: 1,870.16 T1: 842.34 K1P + K2P: 912.48 T2: 769.27 M1: minus 22.68 (T1+T2 minus M1) divided by S1: 366.68 M: minus 346.76 T: 19.92 PP:7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 + K2 + K4: 1,869.72 T1: 836.28 K1P + K2P: 912.21 T2: 765.51 M1: minus 22.68 (T1+T2 minus M1) divided by S1: 425.15 M: minus 366.68 T: 58.47 PP:7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1 + K2 + K4: 1,870.22 T1: 843.28 K1P + K2P: 912.54 T2: 769.83 M1: minus 22.68 (T1+T2 minus M1) divided by S1: see* M: minus 425.15 TB: 11.32 PP:8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 + K2 + K4: 1,869.90 T1: 838.73 K1P + K2P: 912.33 T2: 767.02 M1: minus 34.00 (T1+T2 minus M1) divided by S1: 483.62 M: minus 425.15 T: 58.47 PP:9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 + K2 + K4: 1,869.64 T1: 835.19 K1P + K2P: 912.17 T2: 764.83 M1: minus 34.00 (T1+T2 minus M1) divided by S1: 542.08 M: minus 483.62 T: 58.46 PP:10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 + K2 + K4: 1,869.44 T1: 832.36 K1P + K2P: 912.05 T2: 763.07 M1: minus 34.00 (T1+T2 minus M1) divided by S1: 600.55 M: minus 542.08 T: 58.47 PP:11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1 + K2 + K4: 1,869.28 T1: 830.04 K1P + K2P: 911.94 T2: 761.64 M1: minus 34.00 (T1+T2 minus M1) divided by S1: 659.02 M: minus 600.55 T: 58.47 PP:12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 + K2 + K4: 1,864.91 T1: 768.97 K1P + K2P: 909.23 T2: 723.77 M1: minus 34.00 (T1+T2 minus M1) divided by S1: 673.26 M: minus 659.02 T: 14.24 PP:13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 + K2 + K4: 1,865.11 T1: 771.89 K1P + K2P: 909.36 T2: 725.58 M1: minus 34.00 (T1+T2 minus M1) divided by S1: 731.74 M: minus 673.26 T: 58.48 PP:14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 + K2 + K4: 1,866.41 T1: 789.98 K1P + K2P: 910.16 T2: 736.80 M1: minus 34.00 (T1+T2 minus M1) divided by S1: 803.80 M: minus 731.74 T: 72.06 PP:14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1 + K2 + K4: 1,871.42 T1: 859.97 K1P + K2P: 913.27 T2: 780.19 M1: minus 34.00 (T1+T2 minus M1) divided by S1: see* M: minus 803.80 TB 113.38 PP:15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 + K2 + K4: 1,871.50 T1: 861.10 K1P + K2P: 913.32 T2: 780.89 M1: minus 147.38 (T1+T2 minus M1) divided by S1: 862.28 M: minus 803.80 T: 58.48 PP:16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 + K2 + K4: 1,871.57 T1: 862.09 K1P + K2P: 913.36 T2: 781.51 M1: minus 147.38 (T1+T2 minus M1) divided by S1: 920.75 M: minus 862.28 T: 58.47 PP:17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 + K2 + K4: 1,871.63 T1: 862.96 K1P + K2P: 913.40 T2: 782.04 M1: minus 147.38 (T1+T2 minus M1) divided by S1: 979.21 M: minus 920.75 T: 58.46 PP:18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 + K2 + K4: 1,871.69 T1: 863.73 K1P + K2P: 913.44 T2: 782.52 M1: minus 147.38 (T1+T2 minus M1) divided by S1: 1,037.68 M: minus 979.21 T: 58.47 PP:19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 + K2 + K4: 1,871.74 T1: 864.42 K1P + K2P: 913.47 T2: 782.95 M1: minus 147.38 (T1+T2 minus M1) divided by S1: 1,096.15 M: minus 1,037.68 T: 58.47 PP:20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 + K2 + K4: 1,871.79 T1: 865.04 K1P + K2P: 913.50 T2: 783.33 M1: minus 147.38 (T1+T2 minus M1) divided by S1: 1,154.61 M: minus 1,096.15 T: 58.46 PP:21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 + K2 + K4: 1,871.83 T1: 865.60 K1P + K2P: 913.52 T2: 783.69 M1: minus 147.38 (T1+T2 minus M1) divided by S1: 1,213.08 M: minus 1,154.61 T: 58.47 PP:22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 + K2 + K4: 1,871.86 T1: 866.12 K1P + K2P: 913.55 T2: 784.00 M1: minus 147.38 (T1+T2 minus M1) divided by S1: 1,271.55 M: minus 1,213.08 T: 58.47 PP:23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 + K2 + K4: 1,871.90 T1: 866.58 K1P + K2P: 913.56 T2: 784.30 M1: minus 147.38 (T1+T2 minus M1) divided by S1: 1,330.02 M: minus 1,271.55 T: 58.47 PP:24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 + K2 + K4: 1,871.92 T1: 867.02 K1P + K2P: 913.59 T2: 784.55 M1: minus 147.38 (T1+T2 minus M1) divided by S1: 1,388.48 M: minus 1,330.02 T: 58.46 PP:25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 + K2 + K4: 1,871.95 T1: 867.41 K1P + K2P: 913.60 T2: 784.80 M1: minus 147.38 (T1+T2 minus M1) divided by S1: 1,446.95 M: minus 1,388.48 T: 58.47 PP:26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 + K2 + K4: 1,871.98 T1: 867.77 K1P + K2P: 913.62 T2: 785.03 M1: minus 147.38 (T1+T2 minus M1) divided by S1: 1,505.42 M: minus 1,446.95 T: 58.47 Total tax deducted for the year on regular salary $1,505.42 Total tax deducted for the year on non-periodic payments 147.38 Total tax deducted for the year on salary and non-periodic payments $1,652.80 * 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 66. YTD = year-to-date PAGE 74 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: 1,881.75 T1: 1,004.25 K1P + K2P: 688.76 T2: 792.72 (T1+T2- M1) divided by S1: 69.11 T: 69.11 PP:2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1+ K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 688.76 T2: 792.72 (T1+T2- M1) divided by S1: 138.23 M: minus 69.11 T: 69.12 PP:3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1+ K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 688.76 T2: 792.72 (T1+T2- M1) divided by S1: 207.34 M: minus 138.23 T: 69.11 PP:4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1+ K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 688.76 T2: 792.72 (T1+T2- M1) divided by S1: 276.46 M: minus 207.34 T: 69.12 PP:4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1+ K2 + K4: 1,882.75 T1: 1,018.25 K1P + K2P: 689.27 T2: 799.91 (T1+T2- M1) divided by S1: see* M: minus 276.46 TB: 21.19 PP:5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1+ K2 + K4: 1,879.63 T1: 974.57 K1P + K2P: 687.68 T2: 777.48 M1: minus 21.19 (T1+T2- M1) divided by S1: 332.86 M: minus 276.46 T: 56.40 PP:6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1+ K2 + K4: 1,870.16 T1: 842.34 K1P + K2P: 682.81 T2: 709.61 M1: minus 21.19 (T1+T2- M1) divided by S1: 353.25 M: minus 332.86 T: 20.39 PP:7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1+ K2 + K4: 1,869.72 T1: 836.28 K1P + K2P: 682.59 T2: 706.49 M1: minus 21.19 (T1+T2- M1) divided by S1: 409.66 M: minus 353.25 T: 56.41 PP:7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1+ K2 + K4: 1,870.22 T1: 843.28 K1P + K2P: 682.85 T2: 710.08 M1: minus 21.19 (T1+T2- M1) divided by S1: see* M: minus 409.66 TB: 10.59 PP:8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1+ K2 + K4: 1,869.90 T1: 838.73 K1P + K2P: 682.68 T2: 707.75 M1: minus 31.78 (T1+T2- M1) divided by S1: 466.06 M: minus 409.66 T: 56.40 PP:9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1+ K2 + K4: 1,869.64 T1: 835.19 K1P + K2P: 682.55 T2: 705.93 M1: minus 31.78 (T1+T2- M1) divided by S1: 522.46 M: minus 466.06 T: 56.40 PP:10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1+ K2 + K4: 1,869.44 T1: 832.36 K1P + K2P: 682.44 T2: 704.48 M1: minus 31.78 (T1+T2- M1) divided by S1: 578.87 M: minus 522.46 T: 56.41 PP:11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1+ K2 + K4: 1,869.28 T1: 830.04 K1P + K2P: 682.36 T2: 703.29 M1: minus 31.78 (T1+T2- M1) divided by S1: 635.27 M: minus 578.87 T: 56.40 PP:12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1+ K2 + K4: 1,864.91 T1: 768.97 K1P + K2P: 680.12 T2: 671.94 M1: minus 31.78 (T1+T2- M1) divided by S1: 650.37 M: minus 635.27 T: 15.10 PP:13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1+ K2 + K4: 1,865.11 T1: 771.89 K1P + K2P: 680.23 T2: 673.43 M1: minus 31.78 (T1+T2- M1) divided by S1: 706.77 M: minus 650.37 T: 56.40 PP:14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1+ K2 + K4: 1,866.41 T1: 789.98 K1P + K2P: 680.89 T2: 682.73 M1: minus 31.78 (T1+T2- M1) divided by S1: 775.89 M: minus 706.77 T: 69.12 PP:14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1+ K2 + K4: 1,871.42 T1: 859.97 K1P + K2P: 683.46 T2: 718.66 M1: minus 31.78 (T1+T2- M1) divided by S1: see* M: minus 775.89 TB: 105.92 PP:15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1+ K2 + K4: 1,871.50 T1: 861.10 K1P + K2P: 683.51 T2: 719.22 M1: minus 137.70 (T1+T2- M1) divided by S1: 832.28 M: minus 775.89 T: 56.39 PP:16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1+ K2 + K4: 1,871.57 T1: 862.09 K1P + K2P: 683.54 T2: 719.74 M1: minus 137.70 (T1+T2- M1) divided by S1: 888.70 M: minus 832.28 T: 56.42 PP:17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1+ K2 + K4: 1,871.63 T1: 862.96 K1P + K2P: 683.58 T2: 720.18 M1: minus 137.70 (T1+T2- M1) divided by S1: 945.10 M: minus 888.70 T: 56.40 PP:18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1+ K2 + K4: 1,871.69 T1: 863.73 K1P + K2P: 683.60 T2: 720.58 M1: minus 137.70 (T1+T2- M1) divided by S1: 1,001.50 M: minus 945.10 T: 56.40 PP:19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1+ K2 + K4: 1,871.74 T1: 864.42 K1P + K2P: 683.63 T2: 720.93 M1: minus 137.70 (T1+T2- M1) divided by S1: 1,057.90 M: minus 1,001.50 T: 56.40 PP:20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1+ K2 + K4: 1,871.79 T1: 865.04 K1P + K2P: 683.65 T2: 721.25 M1: minus 137.70 (T1+T2- M1) divided by S1: 1,114.30 M: minus 1,057.90 T: 56.40 PP:21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1+ K2 + K4: 1,871.83 T1: 865.60 K1P + K2P: 683.67 T2: 721.54 M1: minus 137.70 (T1+T2- M1) divided by S1: 1,170.70 M: minus 1,114.30 T: 56.40 PP:22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1+ K2 + K4: 1,871.86 T1: 866.12 K1P + K2P: 683.69 T2: 721.80 M1: minus 137.70 (T1+T2- M1) divided by S1: 1,227.11 M: minus 1,170.70 T: 56.41 PP:23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1+ K2 + K4: 1,871.90 T1: 866.58 K1P + K2P: 683.70 T2: 722.05 M1: minus 137.70 (T1+T2- M1) divided by S1: 1,283.52 M: minus 1,227.11 T: 56.41 PP:24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1+ K2 + K4: 1,871.92 T1: 867.02 K1P + K2P: 683.72 T2: 722.27 M1: minus 137.70 (T1+T2- M1) divided by S1: 1,339.93 M: minus 1,283.52 T: 56.41 PP:25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1+ K2 + K4: 1,871.95 T1: 867.41 K1P + K2P: 683.74 T2: 722.46 M1: minus 137.70 (T1+T2- M1) divided by S1: 1,396.32 M: minus 1,339.93 T: 56.39 PP:26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1+ K2 + K4: 1,871.98 T1: 867.77 K1P + K2P: 683.75 T2: 722.66 M1: minus 137.70 (T1+T2- M1) divided by S1: 1,452.73 M: minus 1,396.32 T: 56.41 Total tax deducted for the year on regular salary $1,452.73 Total tax deducted for the year on non-periodic payments 137.70 Total tax deducted for the year on salary and non-periodic payments $1,590.43 * 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 66. YTD = year-to-date PAGE 75 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: 1,881.75 T1: 1,004.25 K1P + K2P: 817.27 T2: 317.89 (T1+T2 minus M1) divided by S1: 50.85 T: 50.85 PP:2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 817.27 T2: 317.89 (T1+T2 minus M1) divided by S1: 101.70 M: minus 50.85 T: 50.85 PP:3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 817.27 T2: 317.89 (T1+T2 minus M1) divided by S1: 152.55 M: minus 101.70 T: 50.85 PP:4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 817.27 T2: 317.89 (T1+T2 minus M1) divided by S1: 203.41 M: minus 152.55 T: 50.86 PP:4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1 + K2 + K4: 1,882.75 T1: 1,018.25 K1P + K2P: 817.66 T2: 323.40 (T1+T2 minus M1) divided by S1: see* M: minus 203.41 TB: 19.51 PP:5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 + K2 + K4: 1,879.63 T1: 974.57 K1P + K2P: 816.43 T2: 306.22 M1: minus 19.51 (T1+T2 minus M1) divided by S1: 242.55 M: minus 203.41 T: 39.14 PP:6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 + K2 + K4: 1,870.16 T1: 842.34 K1P + K2P: 812.71 T2: 254.21 M1: minus 19.51 (T1+T2 minus M1) divided by S1: 248.55 M: minus 242.55 T: 6.00 PP:7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 + K2 + K4: 1,869.72 T1: 836.28 K1P + K2P: 812.53 T2: 251.83 M1: minus 19.51 (T1+T2 minus M1) divided by S1: 287.70 M: minus 248.55 T: 39.15 PP:7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1 + K2 + K4: 1,870.22 T1: 843.28 K1P + K2P: 812.73 T2: 254.58 M1: minus 19.51 (T1+T2 minus M1) divided by S1: see* M: minus 287.70 TB: 9.75 PP:8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 + K2 + K4: 1,869.90 T1: 838.73 K1P + K2P: 812.61 T2: 252.78 M1: minus 29.26 (T1+T2 minus M1) divided by S1: 326.85 M: minus 287.70 T: 39.15 PP:9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 + K2 + K4: 1,869.64 T1: 835.19 K1P + K2P: 812.51 T2: 251.39 M1: minus 29.26 (T1+T2 minus M1) divided by S1: 366.00 M: minus 326.85 T: 39.15 PP:10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 + K2 + K4: 1,869.44 T1: 832.36 K1P + K2P: 812.42 T2: 250.29 M1: minus 29.26 (T1+T2 minus M1) divided by S1: 405.15 M: minus 366.00 T: 39.15 PP:11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1 + K2 + K4: 1,869.28 T1: 830.04 K1P + K2P: 812.36 T2: 249.37 M1: minus 29.26 (T1+T2 minus M1) divided by S1: 444.29 M: minus 405.15 T: 39.14 PP:12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 + K2 + K4: 1,864.91 T1: 768.97 K1P + K2P: 810.64 T2: 225.35 M1: minus 29.26 (T1+T2 minus M1) divided by S1: 445.41 M: minus 444.29 T: 1.12 PP:13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 + K2 + K4: 1,865.11 T1: 771.89 K1P + K2P: 810.72 T2: 226.50 M1: minus 29.26 (T1+T2 minus M1) divided by S1: 484.57 M: minus 445.41 T: 39.16 PP:14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 + K2 + K4: 1,866.41 T1: 789.98 K1P + K2P: 811.24 T2: 233.61 M1: minus 29.26 (T1+T2 minus M1) divided by S1: 535.41 M: minus 484.57 T: 50.84 PP:14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1 + K2 + K4: 1,871.42 T1: 859.97 K1P + K2P: 813.21 T2: 261.14 M1: minus 29.26 (T1+T2 minus M1) divided by S1: see* M: minus 535.41 TM: 97.52 PP:15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 + K2 + K4: 1,871.50 T1: 861.10 K1P + K2P: 813.23 T2: 261.59 M1: minus 126.78 (T1+T2 minus M1) divided by S1: 574.56 M: minus 535.41 T: 39.15 PP:16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 + K2 + K4: 1,871.57 T1: 862.09 K1P + K2P: 813.26 T2: 261.98 M1: minus 126.78 (T1+T2 minus M1) divided by S1: 613.72 M: minus 574.56 T: 39.16 PP:17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 + K2 + K4: 1,871.63 T1: 862.96 K1P + K2P: 813.29 T2: 262.31 M1: minus 126.78 (T1+T2 minus M1) divided by S1: 652.86 M: minus 613.72 T: 39.14 PP:18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 + K2 + K4: 1,871.69 T1: 863.73 K1P + K2P: 813.31 T2: 262.62 M1: minus 126.78 (T1+T2 minus M1) divided by S1: 692.01 M: minus 652.86 T: 39.15 PP:19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 + K2 + K4: 1,871.74 T1: 864.42 K1P + K2P: 813.33 T2: 262.89 M1: minus 126.78 (T1+T2 minus M1) divided by S1: 731.16 M: minus 692.01 T: 39.15 PP:20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 + K2 + K4: 1,871.79 T1: 865.04 K1P + K2P: 813.34 T2: 263.14 M1: minus 126.78 (T1+T2 minus M1) divided by S1: 770.31 M: minus 731.16 T: 39.15 PP:21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 + K2 + K4: 1,871.83 T1: 865.60 K1P + K2P: 813.37 T2: 263.35 M1: minus 126.78 (T1+T2 minus M1) divided by S1: 809.45 M: minus 770.31 T: 39.14 PP:22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 + K2 + K4: 1,871.86 T1: 866.12 K1P + K2P: 813.38 T2: 263.56 M1: minus 126.78 (T1+T2 minus M1) divided by S1: 848.61 M: minus 809.45 T: 39.16 PP:23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 + K2 + K4: 1,871.90 T1: 866.58 K1P + K2P: 813.39 T2: 263.74 M1: minus 126.78 (T1+T2 minus M1) divided by S1: 887.75 M: minus 848.61 T: 39.14 PP:24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 + K2 + K4: 1,871.92 T1: 867.02 K1P + K2P: 813.41 T2: 263.91 M1: minus 126.78 (T1+T2 minus M1) divided by S1: 926.91 M: minus 887.75 T: 39.16 PP:25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 + K2 + K4: 1,871.95 T1: 867.41 K1P + K2P: 813.41 T2: 264.07 M1: minus 126.78 (T1+T2 minus M1) divided by S1: 966.06 M: minus 926.91 T: 39.15 PP:26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 + K2 + K4: 1,871.98 T1: 867.77 K1P + K2P: 813.42 T2: 264.22 M1: minus 126.78 (T1+T2 minus M1) divided by S1: 1,005.21 M: minus 966.06 T: 39.15 Total tax deducted for the year on regular salary $1,005.21 Total tax deducted for the year on non-periodic payments 126.78 Total tax deducted for the year on salary and non-periodic payments $1,131.99 * 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 66. YTD = year-to-date PAGE 76 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: 1,881.75 T1: 1,004.25 K1P + K2P: 821.25 T2: 869.95 (T1+T2 minus M1) divided by S1: 72.08 T: 72.08 PP: 2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 821.25 T2: 869.95 (T1+T2 minus M1) divided by S1: 144.17 M: minus 72.08 T: 72.09 PP: 3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 821.25 T2: 869.95 (T1+T2 minus M1) divided by S1: 216.25 M: minus 144.17 T: 72.08 PP: 4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 821.25 T2: 869.95 (T1+T2 minus M1) divided by S1: 288.34 M: minus 216.25 T: 72.09 PP: 4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1 + K2 + K4: 1,882.75 T1: 1,018.25 K1P + K2P: 821.83 T2: 878.16 (T1+T2 minus M1) divided by S1: see* M: minus 288.34 TB: 22.21 PP: 5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 + K2 + K4: 1,879.63 T1: 974.57 K1P + K2P: 819.99 T2: 852.57 M1: minus 22.21 (T1+T2 minus M1) divided by S1: 347.10 M: minus 288.34 T: 58.76 PP: 6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 + K2 + K4: 1,870.16 T1: 842.34 K1P + K2P: 814.45 T2: 775.07 M1: minus 22.21 (T1+T2 minus M1) divided by S1: 368.12 M: minus 347.10 T: 21.02 PP: 7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 + K2 + K4: 1,869.72 T1: 836.28 K1P + K2P: 814.19 T2: 771.53 M1: minus 22.21 (T1+T2 minus M1) divided by S1: 426.89 M: minus 368.12 T: 58.77 PP: 7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1 + K2 + K4: 1,870.22 T1: 843.28 K1P + K2P: 814.49 T2: 775.62 M1: minus 22.21 (T1+T2 minus M1) divided by S1: see* M: minus 426.89 TB: 11.09 PP: 8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 + K2 + K4: 1,869.90 T1: 838.73 K1P + K2P: 814.30 T2: 772.95 M1: minus 33.30 (T1+T2 minus M1) divided by S1: 485.66 M: minus 426.89 T: 58.77 PP: 9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 + K2 + K4: 1,869.64 T1: 835.19 K1P + K2P: 814.15 T2: 770.88 M1: minus 33.30 (T1+T2 minus M1) divided by S1: 544.42 M: minus 485.66 T: 58.76 PP: 10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 + K2 + K4: 1,869.44 T1: 832.36 K1P + K2P: 814.03 T2: 769.22 M1: minus 33.30 (T1+T2 minus M1) divided by S1: 603.18 M: minus 544.42 T: 58.76 PP: 11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1 + K2 + K4: 1,869.28 T1: 830.04 K1P + K2P: 813.94 T2: 767.86 M1: minus 33.30 (T1+T2 minus M1) divided by S1: 661.95 M: minus 603.18 T: 58.77 PP: 12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 + K2 + K4: 1,864.91 T1: 768.97 K1P + K2P: 811.37 T2: 732.08 M1: minus 33.30 (T1+T2 minus M1) divided by S1: 677.42 M: minus 661.95 T: 15.47 PP: 13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 + K2 + K4: 1,865.11 T1: 771.89 K1P + K2P: 811.49 T2: 733.79 M1: minus 33.30 (T1+T2 minus M1) divided by S1: 736.19 M: minus 677.42 T: 58.77 PP: 14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 + K2 + K4: 1,866.41 T1: 789.98 K1P + K2P: 812.26 T2: 744.39 M1: minus 33.30 (T1+T2 minus M1) divided by S1: 808.27 M: minus 736.19 T: 72.08 PP: 14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1 + K2 + K4: 1,871.42 T1: 859.97 K1P + K2P: 815.19 T2: 785.41 M1: minus 33.30 (T1+T2 minus M1) divided by S1: see* M: minus 808.27 TB: 111.01 PP: 15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 + K2 + K4: 1,871.50 T1: 861.10 K1P + K2P: 815.24 T2: 786.06 M1: minus 144.31 (T1+T2 minus M1) divided by S1: 867.03 M: minus 808.27 T: 58.76 PP: 16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 + K2 + K4: 1,871.57 T1: 862.09 K1P + K2P: 815.28 T2: 786.64 M1: minus 144.31 (T1+T2 minus M1) divided by S1: 925.80 M: minus 867.03 T: 58.77 PP: 17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 + K2 + K4: 1,871.63 T1: 862.96 K1P + K2P: 815.31 T2: 787.16 M1: minus 144.31 (T1+T2 minus M1) divided by S1: 984.57 M: minus 925.80 T: 58.77 PP: 18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 + K2 + K4: 1,871.69 T1: 863.73 K1P + K2P: 815.35 T2: 787.60 M1: minus 144.31 (T1+T2 minus M1) divided by S1: 1,043.32 M: minus 984.57 T: 58.75 PP: 19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 + K2 + K4: 1,871.74 T1: 864.42 K1P + K2P: 815.38 T2: 788.01 M1: minus 144.31 (T1+T2 minus M1) divided by S1: 1,102.09 M: minus 1,043.32 T: 58.77 PP: 20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 + K2 + K4: 1,871.79 T1: 865.04 K1P + K2P: 815.41 T2: 788.37 M1: minus 144.31 (T1+T2 minus M1) divided by S1: 1,160.85 M: minus 1,102.09 T: 58.76 PP: 21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 + K2 + K4: 1,871.83 T1: 865.60 K1P + K2P: 815.43 T2: 788.70 M1: minus 144.31 (T1+T2 minus M1) divided by S1: 1,219.61 M: minus 1,160.85 T: 58.76 PP: 22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 + K2 + K4: 1,871.86 T1: 866.12 K1P + K2P: 815.45 T2: 789.00 M1: minus 144.31 (T1+T2 minus M1) divided by S1: 1,278.38 M: minus 1,219.61 T: 58.77 PP: 23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 + K2 + K4: 1,871.90 T1: 866.58 K1P + K2P: 815.47 T2: 789.28 M1: minus 144.31 (T1+T2 minus M1) divided by S1: 1,337.14 M: minus 1,278.38 T: 58.76 PP: 24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 + K2 + K4: 1,871.92 T1: 867.02 K1P + K2P: 815.49 T2: 789.53 M1: minus 144.31 (T1+T2 minus M1) divided by S1: 1,395.91 M: minus 1,337.14 T: 58.77 PP: 25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 + K2 + K4: 1,871.95 T1: 867.41 K1P + K2P: 815.50 T2: 789.76 M1: minus 144.31 (T1+T2 minus M1) divided by S1: 1,454.67 M: minus 1,395.91 T: 58.76 PP: 26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 + K2 + K4: 1,871.98 T1: 867.77 K1P + K2P: 815.51 T2: 789.98 M1: minus 144.31 (T1+T2 minus M1) divided by S1: 1,513.44 M: minus 1,454.67 T: 58.77 Total tax deducted for the year on regular salary $1,513.44 Total tax deducted for the year on non-periodic payments 144.31 Total tax deducted for the year on salary and non-periodic payments $1,657.75 * 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 66. YTD = year-to-date PAGE 77 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: 1,881.75 T1: 1,004.25 K1P + K2P: 513.04 T2: 256.56 (T1+T2 minus M1) divided by S1: 48.49 T: 48.49 PP: 2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 513.04 T2: 256.56 (T1+T2 minus M1) divided by S1: 96.99 M: minus 48.49 T: 48.50 PP: 3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 513.04 T2: 256.56 (T1+T2 minus M1) divided by S1: 145.48 M: minus 96.99 T: 48.49 PP: 4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 513.04 T2: 256.56 (T1+T2 minus M1) divided by S1: 193.97 M: minus 145.48 T: 48.49 PP: 4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1 + K2 + K4: 1,882.75 T1: 1,018.25 K1P + K2P: 513.30 T2: 260.30 (T1+T2 minus M1) divided by S1: see* M: minus 193.97 TB: 17.74 PP: 5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 + K2 + K4: 1,879.63 T1: 974.57 K1P + K2P: 512.48 T2: 248.64 M1: minus 17.74 (T1+T2 minus M1) divided by S1: 231.82 M: minus 193.97 T: 37.85 PP: 6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 + K2 + K4: 1,870.16 T1: 842.34 K1P + K2P: 509.94 T2: 213.39 M1: minus 17.74 (T1+T2 minus M1) divided by S1: 239.54 M: minus 231.82 T: 7.72 PP: 7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 + K2 + K4: 1,869.72 T1: 836.28 K1P + K2P: 509.83 T2: 211.77 M1: minus 17.74 (T1+T2 minus M1) divided by S1: 277.39 M: minus 239.54 T: 37.85 PP: 7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1 + K2 + K4: 1,870.22 T1: 843.28 K1P + K2P: 509.97 T2: 213.63 M1: minus 17.74 (T1+T2 minus M1) divided by S1: see* M: minus 277.39 TB: 8.86 PP: 8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 + K2 + K4: 1,869.90 T1: 838.73 K1P + K2P: 509.88 T2: 212.42 M1: minus 26.60 (T1+T2 minus M1) divided by S1: 315.25 M: minus 277.39 T: 37.86 PP: 9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 + K2 + K4: 1,869.64 T1: 835.19 K1P + K2P: 509.81 T2: 211.48 M1: minus 26.60 (T1+T2 minus M1) divided by S1: 353.10 M: minus 315.25 T: 37.85 PP: 10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 + K2 + K4: 1,869.44 T1: 832.36 K1P + K2P: 509.75 T2: 210.73 M1: minus 26.60 (T1+T2 minus M1) divided by S1: 390.96 M: minus 353.10 T: 37.86 PP: 11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1 + K2 + K4: 1,869.28 T1: 830.04 K1P + K2P: 509.71 T2: 210.11 M1: minus 26.60 (T1+T2 minus M1) divided by S1: 428.81 M: minus 390.96 T: 37.85 PP: 12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 + K2 + K4: 1,864.91 T1: 768.97 K1P + K2P: 508.55 T2: 193.82 M1: minus 26.60 (T1+T2 minus M1) divided by S1: 432.09 M: minus 428.81 T: 3.28 PP: 13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 + K2 + K4: 1,865.11 T1: 771.89 K1P + K2P: 508.61 T2: 194.59 M1: minus 26.60 (T1+T2 minus M1) divided by S1: 469.94 M: minus 432.09 T: 37.85 PP: 14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 + K2 + K4: 1,866.41 T1: 789.98 K1P + K2P: 508.94 T2: 199.43 M1: minus 26.60 (T1+T2 minus M1) divided by S1: 518.44 M: minus 469.94 T: 48.50 PP: 14B I YTD: 9,455 B: 500 B1:650 A: 18,209.29 K1 + K2 + K4: 1,871.42 T1: 859.97 K1P + K2P: 510.28 T2: 218.09 M1: minus 26.60 (T1+T2 minus M1) divided by S1: see* M: minus 518.44 TB: 88.65 PP: 15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 + K2 + K4: 1,871.50 T1: 861.10 K1P + K2P: 510.31 T2: 218.38 M1: minus 115.25 (T1+T2 minus M1) divided by S1: 556.29 M: minus 518.44 T: 37.85 PP: 16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 + K2 + K4: 1,871.57 T1: 862.09 K1P + K2P: 510.32 T2: 218.66 M1: minus 115.25 (T1+T2 minus M1) divided by S1: 594.15 M: minus 556.29 T: 37.86 PP: 17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 + K2 + K4: 1,871.63 T1: 862.96 K1P + K2P: 510.35 T2: 218.87 M1: minus 115.25 (T1+T2 minus M1) divided by S1: 631.99 M: minus 594.15 T: 37.84 PP: 18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 + K2 + K4: 1,871.69 T1: 863.73 K1P + K2P: 510.36 T2: 219.08 M1: minus 115.25 (T1+T2 minus M1) divided by S1: 669.85 M: minus 631.99 T: 37.86 PP: 19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 + K2 + K4: 1,871.74 T1: 864.42 K1P + K2P: 510.37 T2: 219.27 M1: minus 115.25 (T1+T2 minus M1) divided by S1: 707.71 M: minus 669.85 T: 37.86 PP: 20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 + K2 + K4: 1,871.79 T1: 865.04 K1P + K2P: 510.39 T2: 219.43 M1: minus 115.25 (T1+T2 minus M1) divided by S1: 745.55 M: minus 707.71 T: 37.84 PP: 21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 + K2 + K4: 1,871.83 T1: 865.60 K1P + K2P: 510.39 T2: 219.59 M1: minus 115.25 (T1+T2 minus M1) divided by S1: 783.41 M: minus 745.55 T: 37.86 PP: 22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 + K2 + K4: 1,871.86 T1: 866.12 K1P + K2P: 510.40 T2: 219.73 M1: minus 115.25 (T1+T2 minus M1) divided by S1: 821.28 M: minus 783.41 T: 37.87 PP: 23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 + K2 + K4: 1,871.90 T1: 866.58 K1P + K2P: 510.41 T2: 219.85 M1: minus 115.25 (T1+T2 minus M1) divided by S1: 859.12 M: minus 821.28 T: 37.84 PP: 24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 + K2 + K4: 1,871.92 T1: 867.02 K1P + K2P: 510.42 T2: 219.96 M1: minus 115.25 (T1+T2 minus M1) divided by S1: 896.98 M: minus 859.12 T: 37.86 PP: 25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 + K2 + K4: 1,871.95 T1: 867.41 K1P + K2P: 510.43 T2: 220.07 M1: minus 115.25 (T1+T2 minus M1) divided by S1: 934.84 M: minus 896.98 T: 37.86 PP: 26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 + K2 + K4: 1,871.98 T1: 867.77 K1P + K2P: 510.43 T2: 220.17 M1: minus 115.25 (T1+T2 minus M1) divided by S1: 972.69 M: minus 934.84 T: 37.85 Total tax deducted for the year on regular salary $972.69 Total tax deducted for the year on non-periodic payments 115.25 Total tax deducted for the year on salary and non-periodic payments $1,087.94 * 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 66. YTD = year-to-date PAGE 78 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: 1,881.75 T1: 1,004.25 K1P + K2P: 507.78 T2: 463.84 (T1+T2 minus M1) divided by S1: 56.47 T: 56.47 PP: 2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 507.78 T2: 463.84 (T1+T2 minus M1) divided by S1: 112.93 M: minus 56.47 T: 56.46 PP: 3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 507.78 T2: 463.84 (T1+T2 minus M1) divided by S1: 169.40 M: minus 112.93 T: 56.47 PP: 4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 507.78 T2: 463.84 (T1+T2 minus M1) divided by S1: 225.86 M: minus 169.40 T: 56.46 PP: 4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1 + K2 + K4: 1,882.75 T1: 1,018.25 K1P + K2P: 508.12 T2: 468.55 (T1+T2 minus M1) divided by S1: see* M: minus 225.86 TB: 18.71 PP: 5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 + K2 + K4: 1,879.63 T1: 974.57 K1P + K2P: 507.06 T2: 453.85 M1: minus 18.71 (T1+T2 minus M1) divided by S1: 271.10 M: minus 225.86 T: 45.24 PP: 6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 + K2 + K4: 1,870.16 T1: 842.34 K1P + K2P: 503.87 T2: 406.68 M1: minus 18.71 (T1+T2 minus M1) divided by S1: 283.92 M: minus 271.10 T: 12.82 PP: 7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 + K2 + K4: 1,869.72 T1: 836.28 K1P + K2P: 503.73 T2: 402.58 M1: minus 18.71 (T1+T2 minus M1) divided by S1: 328.50 M: minus 283.92 T: 44.58 PP: 7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1 + K2 + K4: 1,870.22 T1: 843.28 K1P + K2P: 503.89 T2: 407.32 M1: minus 18.71 (T1+T2 minus M1) divided by S1: see* M: minus 328.50 TB: 11.74 PP: 8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 + K2 + K4: 1,869.90 T1: 838.73 K1P + K2P: 503.79 T2: 404.22 M1: minus 30.45 (T1+T2 minus M1) divided by S1: 373.08 M: minus 328.50 T: 44.58 PP: 9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 + K2 + K4: 1,869.64 T1: 835.19 K1P + K2P: 503.70 T2: 401.86 M1: minus 30.45 (T1+T2 minus M1) divided by S1: 417.67 M: minus 373.08 T: 44.59 PP: 10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 + K2 + K4: 1,869.44 T1: 832.36 K1P + K2P: 503.64 T2: 399.94 M1: minus 30.45 (T1+T2 minus M1) divided by S1: 462.25 M: minus 417.67 T: 44.58 PP: 11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1 + K2 + K4: 1,869.28 T1: 830.04 K1P + K2P: 503.57 T2: 398.40 M1: minus 30.45 (T1+T2 minus M1) divided by S1: 506.84 M: minus 462.25 T: 44.59 PP: 12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 + K2 + K4: 1,864.91 T1: 768.97 K1P + K2P: 502.10 T2: 357.28 M1: minus 30.45 (T1+T2 minus M1) divided by S1: 505.75 M: minus 506.84 T: 0.00 PP: 13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 + K2 + K4: 1,865.11 T1: 771.89 K1P + K2P: 502.18 T2: 359.22 M1: minus 30.45 (T1+T2 minus M1) divided by S1: 550.33 M: minus 506.84 T: 43.49 PP: 14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 + K2 + K4: 1,866.41 T1: 789.98 K1P + K2P: 502.61 T2: 371.42 M1: minus 30.45 (T1+T2 minus M1) divided by S1: 608.97 M: minus 550.33 T: 58.64 PP: 14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1 + K2 + K4: 1,871.42 T1: 859.97 K1P + K2P: 504.30 T2: 415.27 M1: minus 30.45 (T1+T2 minus M1) divided by S1: see* M: minus 608.97 TB: 113.84 PP: 15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 + K2 + K4: 1,871.50 T1: 861.10 K1P + K2P: 504.33 T2: 415.65 M1: minus 144.29 (T1+T2 minus M1) divided by S1: 653.34 M: minus 608.97 T: 44.37 PP: 16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 + K2 + K4: 1,871.57 T1: 862.09 K1P + K2P: 504.35 T2: 415.98 M1: minus 144.29 (T1+T2 minus M1) divided by S1: 697.71 M: minus 653.34 T: 44.37 PP: 17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 + K2 + K4: 1,871.63 T1: 862.96 K1P + K2P: 504.37 T2: 416.27 M1: minus 144.29 (T1+T2 minus M1) divided by S1: 742.08 M: minus 697.71 T: 44.37 PP: 18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 + K2 + K4: 1,871.69 T1: 863.73 K1P + K2P: 504.39 T2: 416.53 M1: minus 144.29 (T1+T2 minus M1) divided by S1: 786.44 M: minus 742.08 T: 44.36 PP: 19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 + K2 + K4: 1,871.74 T1: 864.42 K1P + K2P: 504.41 T2: 416.76 M1: minus 144.29 (T1+T2 minus M1) divided by S1: 830.80 M: minus 786.44 T: 44.36 PP: 20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 + K2 + K4: 1,871.79 T1: 865.04 K1P + K2P: 504.42 T2: 416.98 M1: minus 144.29 (T1+T2 minus M1) divided by S1: 875.18 M: minus 830.80 T: 44.38 PP: 21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 + K2 + K4: 1,871.83 T1: 865.60 K1P + K2P: 504.43 T2: 417.17 M1: minus 144.29 (T1+T2 minus M1) divided by S1: 919.54 M: minus 875.18 T: 44.36 PP: 22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 + K2 + K4: 1,871.86 T1: 866.12 K1P + K2P: 504.45 T2: 417.34 M1: minus 144.29 (T1+T2 minus M1) divided by S1: 963.91 M: minus 919.54 T: 44.37 PP: 23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 + K2 + K4: 1,871.90 T1: 866.58 K1P + K2P: 504.46 T2: 417.49 M1: minus 144.29 (T1+T2 minus M1) divided by S1: 1,008.27 M: minus 963.91 T: 44.36 PP: 24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 + K2 + K4: 1,871.92 T1: 867.02 K1P + K2P: 504.47 T2: 417.64 M1: minus 144.29 (T1+T2 minus M1) divided by S1: 1,052.65 M: minus 1,008.27 T: 44.38 PP: 25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 + K2 + K4: 1,871.95 T1: 867.41 K1P + K2P: 504.47 T2: 417.78 M1: minus 144.29 (T1+T2 minus M1) divided by S1: 1,097.02 M: minus 1,052.65 T: 44.37 PP: 26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 + K2 + K4: 1,871.98 T1: 867.77 K1P + K2P: 504.49 T2: 417.89 M1: minus 144.29 (T1+T2 minus M1) divided by S1: 1,141.37 M: minus 1,097.02 T: 44.35 Total tax deducted for the year on regular salary $1,141.37 Total tax deducted for the year on non-periodic payments 144.29 Total tax deducted for the year on salary and non-periodic payments $1,285.66 * 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 66. YTD = year-to-date PAGE 79 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: 1,881.75 T1: 1,004.25 K1P + K2P: 864.35 T2: 1,021.17 (T1+T2 minus M1) divided by S1: 77.90 T: 77.90 PP: 2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 864.35 T2: 1,021.17 (T1+T2 minus M1) divided by S1: 155.80 M: minus 77.90 T: 77.90 PP: 3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 864.35 T2: 1,021.17 (T1+T2 minus M1) divided by S1: 233.70 M: minus 155.80 T: 77.90 PP: 4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 864.35 T2: 1,021.17 (T1+T2 minus M1) divided by S1: 311.60 M: minus 233.70 T: 77.90 PP: 4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1 + K2 + K4: 1,882.75 T1: 1,018.25 K1P + K2P: 865.01 T2: 1,030.31 (T1+T2 minus M1) divided by S1: see* M: minus 311.60 TB: 23.14 PP: 5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 + K2 + K4: 1,879.63 T1: 974.57 K1P + K2P: 862.97 T2: 1,001.77 M1: minus 23.14 (T1+T2 minus M1) divided by S1: 375.62 M: minus 311.60 T: 64.02 PP: 6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 + K2 + K4: 1,870.16 T1: 842.34 K1P + K2P: 856.78 T2: 915.39 M1: minus 23.14 (T1+T2 minus M1) divided by S1: 400.29 M: minus 375.62 T: 24.67 PP: 7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 + K2 + K4: 1,869.72 T1: 836.28 K1P + K2P: 856.49 T2: 911.43 M1: minus 23.14 (T1+T2 minus M1) divided by S1: 464.31 M: minus 400.29 T: 64.02 PP: 7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1 + K2 + K4: 1,870.22 T1: 843.28 K1P + K2P: 856.83 T2: 915.99 M1: minus 23.14 (T1+T2 minus M1) divided by S1: see* M: minus 464.31 TB: 11.56 PP: 8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 + K2 + K4: 1,869.90 T1: 838.73 K1P + K2P: 856.61 T2: 913.03 M1: minus 34.70 (T1+T2 minus M1) divided by S1: 528.33 M: minus 464.31 T: 64.02 PP: 9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 + K2 + K4: 1,869.64 T1: 835.19 K1P + K2P: 856.45 T2: 910.71 M1: minus 34.70 (T1+T2 minus M1) divided by S1: 592.34 M: minus 528.33 T: 64.01 PP: 10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 + K2 + K4: 1,869.44 T1: 832.36 K1P + K2P: 856.32 T2: 908.86 M1: minus 34.70 (T1+T2 minus M1) divided by S1: 656.35 M: minus 592.34 T: 64.01 PP: 11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1 + K2 + K4: 1,869.28 T1: 830.04 K1P + K2P: 856.21 T2: 907.34 M1: minus 34.70 (T1+T2 minus M1) divided by S1: 720.36 M: minus 656.35 T: 64.01 PP: 12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 + K2 + K4: 1,864.91 T1: 768.97 K1P + K2P: 853.35 T2: 867.45 M1: minus 34.70 (T1+T2 minus M1) divided by S1: 739.26 M: minus 720.36 T: 18.90 PP: 13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 + K2 + K4: 1,865.11 T1: 771.89 K1P + K2P: 853.48 T2: 869.36 M1: minus 34.70 (T1+T2 minus M1) divided by S1: 803.28 M: minus 739.26 T: 64.02 PP: 14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 + K2 + K4: 1,866.41 T1: 789.98 K1P + K2P: 854.33 T2: 881.18 M1: minus 34.70 (T1+T2 minus M1) divided by S1: 881.17 M: minus 803.28 T: 77.89 PP: 14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1 + K2 + K4: 1,871.42 T1: 859.97 K1P + K2P: 857.60 T2: 926.91 M1: minus 34.70 (T1+T2 minus M1) divided by S1: see* M: minus 881.17 TB: 115.72 PP: 15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 + K2 + K4: 1,871.50 T1: 861.10 K1P + K2P: 857.66 T2: 927.64 M1: minus 150.42 (T1+T2 minus M1) divided by S1: 945.18 M: minus 881.17 T: 64.01 PP: 16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 + K2 + K4: 1,871.57 T1: 862.09 K1P + K2P: 857.71 T2: 928.28 M1: minus 150.42 (T1+T2 minus M1) divided by S1: 1,009.20 M: minus 945.18 T: 64.02 PP: 17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 + K2 + K4: 1,871.63 T1: 862.96 K1P + K2P: 857.75 T2: 928.85 M1: minus 150.42 (T1+T2 minus M1) divided by S1: 1,073.22 M: minus 1,009.20 T: 64.02 PP: 18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 + K2 + K4: 1,871.69 T1: 863.73 K1P + K2P: 857.79 T2: 929.35 M1: minus 150.42 (T1+T2 minus M1) divided by S1: 1,137.23 M: minus 1,073.22 T: 64.01 PP: 19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 + K2 + K4: 1,871.74 T1: 864.42 K1P + K2P: 857.82 T2: 929.80 M1: minus 150.42 (T1+T2 minus M1) divided by S1: 1,201.24 M: minus 1,137.23 T: 64.01 PP: 20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 + K2 + K4: 1,871.79 T1: 865.04 K1P + K2P: 857.84 T2: 930.22 M1: minus 150.42 (T1+T2 minus M1) divided by S1: 1,265.26 M: minus 1,201.24 T: 64.02 PP: 21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 + K2 + K4: 1,871.83 T1: 865.60 K1P + K2P: 857.87 T2: 930.58 M1: minus 150.42 (T1+T2 minus M1) divided by S1: 1,329.27 M: minus 1,265.26 T: 64.01 PP: 22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 + K2 + K4: 1,871.86 T1: 866.12 K1P + K2P: 857.90 T2: 930.91 M1: minus 150.42 (T1+T2 minus M1) divided by S1: 1,393.29 M: minus 1,329.27 T: 64.02 PP: 23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 + K2 + K4: 1,871.90 T1: 866.58 K1P + K2P: 857.91 T2: 931.23 M1: minus 150.42 (T1+T2 minus M1) divided by S1: 1,457.31 M: minus 1,393.29 T: 64.02 PP: 24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 + K2 + K4: 1,871.92 T1: 867.02 K1P + K2P: 857.94 T2: 931.50 M1: minus 150.42 (T1+T2 minus M1) divided by S1: 1,521.32 M: minus 1,457.31 T: 64.01 PP: 25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 + K2 + K4: 1,871.95 T1: 867.41 K1P + K2P: 857.95 T2: 931.77 M1: minus 150.42 (T1+T2 minus M1) divided by S1: 1,585.35 M: minus 1,521.32 T: 64.03 PP: 26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 + K2 + K4: 1,871.98 T1: 867.77 K1P + K2P: 857.98 T2: 931.99 M1: minus 150.42 (T1+T2 minus M1) divided by S1: 1,649.34 M: minus 1,585.35 T: 63.99 Total tax deducted for the year on regular salary $1,649.34 Total tax deducted for the year on non-periodic payments 150.42 Total tax deducted for the year on salary and non-periodic payments $1,799.76 * 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 66. YTD = year-to-date PAGE 80 Option 2 - Examples when calculating the tax deductions on salary and non- periodic payments separately (continued) Quebec T: TB PP: 1 Salary: 740 I YTD: 740 A: 19,240.00 K1 +K2 + K4: 1,885.67 T3: 1,000.33 Abatement: 165.05 T1: 835.28 (T1 minus M1) divided S1: 32.13 T: 32.13 PP: 2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 +K2 + K4: 1,885.67 T3: 1,000.33 Abatement: 165.05 T1: 835.28 (T1 minus M1) divided S1: 64.25 M: minus 32.13 T: 32.12 PP: 3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 +K2 + K4: 1,885.67 T3: 1,000.33 Abatement: 165.05 T1: 835.28 (T1 minus M1) divided S1: 96.38 M: minus 64.25 T: 32.13 PP: 4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 +K2 + K4: 1,885.67 T3: 1,000.33 Abatement: 165.05 T1: 835.28 (T1 minus M1) divided S1: 128.50 M: minus 96.38 T: 32.12 PP: 4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1 +K2 + K4: 1,886.69 T3: 1,014.31 Abatement: 167.36 T1: 846.95 (T1 minus M1) divided S1: see* M: minus 128.50 TB: 11.67 PP: 5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 +K2 + K4: 1,883.51 T3: 970.69 Abatement: 160.16 T1: 810.53 M1: minus 11.67 (T1 minus M1) divided S1: 153.63 M: minus 128.50 T: 25.13 PP: 6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 +K2 + K4: 1,873.85 T3: 838.65 Abatement: 138.38 T1: 700.27 M1: minus 11.67 (T1 minus M1) divided S1: 158.91 M: minus 153.63 T: 5.28 PP: 7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 +K2 + K4: 1,873.40 T3: 832.60 Abatement: 137.38 T1: 695.22 M1: minus 11.67 (T1 minus M1) divided S1: 184.03 M: minus 158.91 T: 25.12 PP: 7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1 +K2 + K4: 1,873.91 T3: 839.59 Abatement: 138.53 T1: 701.06 M1: minus 11.67 (T1 minus M1) divided S1: see* M: minus 184.03 TB: 5.84 PP: 8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 +K2 + K4: 1,873.59 T3: 835.04 Abatement: 137.78 T1: 697.26 M1: minus 17.51 (T1 minus M1) divided S1: 209.15 M: minus 184.03 T: 25.12 PP: 9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 +K2 + K4: 1,873.33 T3: 831.50 Abatement: 137.20 T1: 694.30 M1: minus 17.51 (T1 minus M1) divided S1: 234.27 M: minus 209.15 T: 25.12 PP: 10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 +K2 + K4: 1,873.11 T3: 828.69 Abatement: 136.73 T1: 691.96 M1: minus 17.51 (T1 minus M1) divided S1: 259.40 M: minus 234.27 T: 25.13 PP: 11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1 +K2 + K4: 1,872.95 T3: 826.37 Abatement: 136.35 T1: 690.02 M1: minus 17.51 (T1 minus M1) divided S1: 284.52 M: minus 259.40 T: 25.12 PP: 12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 +K2 + K4: 1,868.49 T3: 765.39 Abatement: 126.29 T1: 639.10 M1: minus 17.51 (T1 minus M1) divided S1: 286.89 M: minus 284.52 T: 2.37 PP: 13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 +K2 + K4: 1,868.69 T3: 768.31 Abatement: 126.77 T1: 641.54 M1: minus 17.51 (T1 minus M1) divided S1: 312.02 M: minus 286.89 T: 25.13 PP: 14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 +K2 + K4: 1,870.02 T3: 786.37 Abatement: 129.75 T1: 656.62 M1: minus 17.51 (T1 minus M1) divided S1: 344.14 M: minus 312.02 T: 32.12 PP: 14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1 +K2 + K4: 1,875.14 T3: 856.25 Abatement: 141.28 T1: 714.97 M1: minus 17.51 (T1 minus M1) divided S1: see* M: minus 344.14 TB: 58.35 PP: 15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 +K2 + K4: 1,875.22 T3: 857.38 Abatement: 141.47 T1: 715.91 M1: minus 75.86 (T1 minus M1) divided S1: 369.26 M: minus 344.14 T: 25.12 PP: 16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 +K2 + K4: 1,875.29 T3: 858.37 Abatement: 141.63 T1: 716.74 M1: minus 75.86 (T1 minus M1) divided S1: 394.39 M: minus 369.26 T: 25.13 PP: 17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 +K2 + K4: 1,875.35 T3: 859.24 Abatement: 141.77 T1: 717.47 M1: minus 75.86 (T1 minus M1) divided S1: 419.51 M: minus 394.39 T: 25.12 PP: 18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 +K2 + K4: 1,875.41 T3: 860.01 Abatement: 141.90 T1: 718.11 M1: minus 75.86 (T1 minus M1) divided S1: 444.63 M: minus 419.51 T: 25.12 PP: 19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 +K2 + K4: 1,875.46 T3: 860.70 Abatement: 142.02 T1: 718.68 M1: minus 75.86 (T1 minus M1) divided S1: 469.75 M: minus 444.63 T: 25.12 PP: 20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 +K2 + K4: 1,875.51 T3: 861.32 Abatement: 142.12 T1: 719.20 M1: minus 75.86 (T1 minus M1) divided S1: 494.88 M: minus 469.75 T: 25.13 PP: 21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 +K2 + K4: 1,875.55 T3: 861.88 Abatement: 142.21 T1: 719.67 M1: minus 75.86 (T1 minus M1) divided S1: 520.00 M: minus 494.88 T: 25.12 PP: 22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 +K2 + K4: 1,875.58 T3: 862.40 Abatement: 142.30 T1: 720.10 M1: minus 75.86 (T1 minus M1) divided S1: 545.13 M: minus 520.00 T: 25.13 PP: 23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 +K2 + K4: 1,875.62 T3: 862.86 Abatement: 142.37 T1: 720.49 M1: minus 75.86 (T1 minus M1) divided S1: 570.25 M: minus 545.13 T: 25.12 PP: 24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 +K2 + K4: 1,875.65 T3: 863.29 Abatement: 142.44 T1: 720.85 M1: minus 75.86 (T1 minus M1) divided S1: 595.38 M: minus 570.25 T: 25.13 PP: 25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 +K2 + K4: 1,875.68 T3: 863.68 Abatement: 142.51 T1: 721.17 M1: minus 75.86 (T1 minus M1) divided S1: 620.49 M: minus 595.38 T: 25.11 PP: 26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 +K2 + K4: 1,875.70 T3: 864.05 Abatement: 142.57 T1: 721.48 M1: minus 75.86 (T1 minus M1) divided S1: 645.62 M: minus 620.49 T: 25.13 Total tax deducted for the year on regular salary $645.62 Total tax deducted for the year on non-periodic payments 75.86 Total tax deducted for the year on salary and non-periodic payments $721.48 * 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 66. YTD = year-to-date PAGE 81 Option 2 - Examples when calculating the tax deductions on salary and non- periodic payments separately (continued) Saskatchewan T: TB PP: 1 Salary: 740 I YTD: 740 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 1,590.59 T2: 525.81 (T1 + T2 minus M1) divided by S1: 58.85 T: 58.85 PP: 2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 1,590.59 T2: 525.81 (T1 + T2 minus M1) divided by S1: 117.70 M: minus 58.85 T: 58.85 PP: 3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 1,590.59 T2: 525.81 (T1 + T2 minus M1) divided by S1: 176.55 M: minus 117.70 T: 58.85 PP: 4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P: 1,590.59 T2: 525.81 (T1 + T2 minus M1) divided by S1: 235.39 M: minus 176.55 T: 58.84 PP: 4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1 + K2 + K4: 1,882.75 T1: 1,018.25 K1P + K2P: 1,591.33 T2: 536.07 (T1 + T2 minus M1) divided by S1: see* M: minus 235.39 TB: 24.26 PP: 5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 + K2 + K4: 1,879.63 T1: 974.57 K1P + K2P: 1,589.04 T2: 504.04 M1: minus 24.26 (T1 + T2 minus M1) divided by S1: 279.68 M: minus 235.39 T: 44.29 PP: 6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 + K2 + K4: 1,870.16 T1: 842.34 K1P + K2P: 1,582.10 T2: 407.07 M1: minus 24.26 (T1 + T2 minus M1) divided by S1: 282.73 M: minus 279.68 T: 3.05 PP: 7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 + K2 + K4: 1,869.72 T1: 836.28 K1P + K2P: 1,581.78 T2: 402.62 M1: minus 24.26 (T1 + T2 minus M1) divided by S1: 327.02 M: minus 282.73 T: 44.29 PP: 7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1 + K2 + K4: 1,870.22 T1: 843.28 K1P + K2P: 1,582.15 T2: 407.75 M1: minus 24.26 (T1 + T2 minus M1) divided by S1: see* M: minus 327.02 TB: 12.13 PP: 8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 + K2 + K4: 1,869.90 T1: 838.73 K1P + K2P: 1,581.91 T2: 404.42 M1: minus 36.39 (T1 + T2 minus M1) divided by S1: 371.31 M: minus 327.02 T: 44.29 PP: 9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 + K2 + K4: 1,869.64 T1: 835.19 K1P + K2P: 1,581.73 T2: 401.81 M1: minus 36.39 (T1 + T2 minus M1) divided by S1: 415.60 M: minus 371.31 T: 44.29 PP: 10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 + K2 + K4: 1,869.44 T1: 832.36 K1P + K2P: 1,581.58 T2: 399.74 M1: minus 36.39 (T1 + T2 minus M1) divided by S1: 459.89 M: minus 415.60 T: 44.29 PP: 11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1 + K2 + K4: 1,869.28 T1: 830.04 K1P + K2P: 1,581.46 T2: 398.04 M1: minus 36.39 (T1 + T2 minus M1) divided by S1: 504.18 M: minus 459.89 T: 44.29 PP: 12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 + K2 + K4: 1,864.91 T1: 768.97 K1P + K2P: 1,578.24 T2: 353.27 M1: minus 36.39 (T1 + T2 minus M1) divided by S1: 501.16 M: minus 504.18 T: 0.00 PP: 13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 + K2 + K4: 1,865.11 T1: 771.89 K1P + K2P: 1,578.40 T2: 355.40 M1: minus 36.39 (T1 + T2 minus M1) divided by S1: 545.45 M: minus 504.18 T: 41.27 PP: 14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 + K2 + K4: 1,866.41 T1: 789.98 K1P + K2P: 1,579.35 T2: 368.67 M1: minus 36.39 (T1 + T2 minus M1) divided by S1: 604.29 M: minus 545.45 T: 58.84 PP: 14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1 + K2 + K4: 1,871.42 T1: 859.97 K1P + K2P: 1,583.02 T2: 420.00 M1: minus 36.39 (T1 + T2 minus M1) divided by S1: see* M: minus 604.29 TB: 121.32 PP: 15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 + K2 + K4: 1,871.50 T1: 861.10 K1P + K2P: 1,583.09 T2: 420.82 M1: minus 157.71 (T1 + T2 minus M1) divided by S1: 648.58 M: minus 604.29 T: 44.29 PP: 16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 + K2 + K4: 1,871.57 T1: 862.09 K1P + K2P: 1,583.13 T2: 421.55 M1: minus 157.71 (T1 + T2 minus M1) divided by S1: 692.88 M: minus 648.58 T: 44.30 PP: 17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 + K2 + K4: 1,871.63 T1: 862.96 K1P + K2P: 1,583.18 T2: 422.18 M1: minus 157.71 (T1 + T2 minus M1) divided by S1: 737.17 M: minus 692.88 T: 44.29 PP: 18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 + K2 + K4: 1,871.69 T1: 863.73 K1P + K2P: 1,583.22 T2: 422.75 M1: minus 157.71 (T1 + T2 minus M1) divided by S1: 781.46 M: minus 737.17 T: 44.29 PP: 19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 + K2 + K4: 1,871.74 T1: 864.42 K1P + K2P: 1,583.25 T2: 423.27 M1: minus 157.71 (T1 + T2 minus M1) divided by S1: 825.75 M: minus 781.46 T: 44.29 PP: 20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 + K2 + K4: 1,871.79 T1: 865.04 K1P + K2P: 1,583.29 T2: 423.72 M1: minus 157.71 (T1 + T2 minus M1) divided by S1: 870.04 M: minus 825.75 T: 44.29 PP: 21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 + K2 + K4: 1,871.83 T1: 865.60 K1P + K2P: 1,583.32 T2: 424.13 M1: minus 157.71 (T1 + T2 minus M1) divided by S1: 914.32 M: minus 870.04 T: 44.28 PP: 22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 + K2 + K4: 1,871.86 T1: 866.12 K1P + K2P: 1,583.35 T2: 424.50 M1: minus 157.71 (T1 + T2 minus M1) divided by S1: 958.62 M: minus 914.32 T: 44.30 PP: 23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 + K2 + K4: 1,871.90 T1: 866.58 K1P + K2P: 1,583.37 T2: 424.85 M1: minus 157.71 (T1 + T2 minus M1) divided by S1: 1,002.91 M: minus 958.62 T: 44.29 PP: 24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 + K2 + K4: 1,871.92 T1: 867.02 K1P + K2P: 1,583.40 T2: 425.15 M1: minus 157.71 (T1 + T2 minus M1) divided by S1: 1,047.19 M: minus 1,002.91 T: 44.28 PP: 25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 + K2 + K4: 1,871.95 T1: 867.41 K1P + K2P: 1,583.41 T2: 425.45 M1: minus 157.71 (T1 + T2 minus M1) divided by S1: 1,091.49 M: minus 1,047.19 T: 44.30 PP: 26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 + K2 + K4: 1,871.98 T1: 867.77 K1P + K2P: 1,583.44 T2: 425.71 M1: minus 157.71 (T1 + T2 minus M1) divided by S1: 1,135.77 M: minus 1,091.49 T: 44.28 Total tax deducted for the year on regular salary $1,135.77 Total tax deducted for the year on non-periodic payments 157.71 Total tax deducted for the year on salary and non-periodic payments $1,293.48 * 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 66. YTD = year-to-date PAGE 82 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: 1,881.75 T1: 1,004.25 K1P + K2P + K4P: 883.16 T2: 471.34 (T1+T2 minus M1) divided by S1: 56.75 T: 56.75 PP: 2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P + K4P: 883.16 T2: 471.34 (T1+T2 minus M1) divided by S1: 113.51 M: minus 56.75 T: 56.76 PP: 3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P + K4P: 883.16 T2: 471.34 (T1+T2 minus M1) divided by S1: 170.26 M: minus 113.51 T: 56.75 PP: 4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 + K2 + K4: 1,881.75 T1: 1,004.25 K1P + K2P + K4P: 883.16 T2: 471.34 (T1+T2 minus M1) divided by S1: 227.01 M: minus 170.26 T: 56.75 PP: 4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1 + K2 + K4: 1,882.75 T1: 1,018.25 K1P + K2P + K4P: 883.63 T2: 477.91 (T1+T2 minus M1) divided by S1: see* M: minus 227.01 TB: 20.57 PP: 5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 + K2 + K4: 1,879.63 T1: 974.57 K1P + K2P + K4P: 882.16 T2: 457.41 M1: minus 20.57 (T1+T2 minus M1) divided by S1: 271.43 M: minus 227.01 T: 44.42 PP: 6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 + K2 + K4: 1,870.16 T1: 842.34 K1P + K2P + K4P: 877.72 T2: 395.35 M1: minus 20.57 (T1+T2 minus M1) divided by S1: 280.87 M: minus 271.43 T: 9.44 PP: 7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 + K2 + K4: 1,869.72 T1: 836.28 K1P + K2P + K4P: 877.52 T2: 392.50 M1: minus 20.57 (T1+T2 minus M1) divided by S1: 325.29 M: minus 280.87 T: 44.42 PP: 7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1 + K2 + K4: 1,870.22 T1: 843.28 K1P + K2P + K4P: 877.75 T2: 395.79 M1: minus 20.57 (T1+T2 minus M1) divided by S1: see* M: minus 325.29 TB: 10.29 PP: 8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 + K2 + K4: 1,869.90 T1: 838.73 K1P + K2P + K4P: 877.60 T2: 393.65 M1: minus 30.86 (T1+T2 minus M1) divided by S1: 369.70 M: minus 325.29 T: 44.41 PP: 9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 + K2 + K4: 1,869.64 T1: 835.19 K1P + K2P + K4P: 877.48 T2: 391.99 M1: minus 30.86 (T1+T2 minus M1) divided by S1: 414.11 M: minus 369.70 T: 44.41 PP: 10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 + K2 + K4: 1,869.44 T1: 832.36 K1P + K2P + K4P: 877.39 T2: 390.65 M1: minus 30.86 (T1+T2 minus M1) divided by S1: 458.52 M: minus 414.11 T: 44.41 PP: 11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1 + K2 + K4: 1,869.28 T1: 830.04 K1P + K2P + K4P: 877.31 T2: 389.57 M1: minus 30.86 (T1+T2 minus M1) divided by S1: 502.93 M: minus 458.52 T: 44.41 PP: 12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 + K2 + K4: 1,864.91 T1: 768.97 K1P + K2P + K4P: 875.26 T2: 360.91 M1: minus 30.86 (T1+T2 minus M1) divided by S1: 507.24 M: minus 502.93 T: 4.31 PP: 13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 + K2 + K4: 1,865.11 T1: 771.89 K1P + K2P + K4P: 875.36 T2: 362.27 M1: minus 30.86 (T1+T2 minus M1) divided by S1: 551.65 M: minus 507.24 T: 44.41 PP: 14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 + K2 + K4: 1,866.41 T1: 789.98 K1P + K2P + K4P: 875.97 T2: 370.76 M1: minus 30.86 (T1+T2 minus M1) divided by S1: 608.40 M: minus 551.65 T: 56.75 PP: 14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1 + K2 + K4: 1,871.42 T1: 859.97 K1P + K2P + K4P: 878.32 T2: 403.61 M1: minus 30.86 (T1+T2 minus M1) divided by S1: see* M: minus 608.40 TB: 102.84 PP: 15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 + K2 + K4: 1,871.50 T1: 861.10 K1P + K2P + K4P: 878.36 T2: 404.14 M1: minus 133.70 (T1+T2 minus M1) divided by S1: 652.81 M: minus 608.40 T: 44.41 PP: 16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 + K2 + K4: 1,871.57 T1: 862.09 K1P + K2P + K4P: 878.39 T2: 404.61 M1: minus 133.70 (T1+T2 minus M1) divided by S1: 697.23 M: minus 652.81 T: 44.42 PP: 17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 + K2 + K4: 1,871.63 T1: 862.96 K1P + K2P + K4P: 878.41 T2: 405.02 M1: minus 133.70 (T1+T2 minus M1) divided by S1: 741.64 M: minus 697.23 T: 44.41 PP: 18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 + K2 + K4: 1,871.69 T1: 863.73 K1P + K2P + K4P: 878.44 T2: 405.38 M1: minus 133.70 (T1+T2 minus M1) divided by S1: 786.05 M: minus 741.64 T: 44.41 PP: 19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 + K2 + K4: 1,871.74 T1: 864.42 K1P + K2P + K4P: 878.47 T2: 405.70 M1: minus 133.70 (T1+T2 minus M1) divided by S1: 830.46 M: minus 786.05 T: 44.41 PP: 20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 + K2 + K4: 1,871.79 T1: 865.04 K1P + K2P + K4P: 878.48 T2: 406.00 M1: minus 133.70 (T1+T2 minus M1) divided by S1: 874.88 M: minus 830.46 T: 44.42 PP: 21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 + K2 + K4: 1,871.83 T1: 865.60 K1P + K2P + K4P: 878.51 T2: 406.26 M1: minus 133.70 (T1+T2 minus M1) divided by S1: 919.28 M: minus 874.88 T: 44.40 PP: 22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 + K2 + K4: 1,871.86 T1: 866.12 K1P + K2P + K4P: 878.52 T2: 406.50 M1: minus 133.70 (T1+T2 minus M1) divided by S1: 963.70 M: minus 919.28 T: 44.42 PP: 23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 + K2 + K4: 1,871.90 T1: 866.58 K1P + K2P + K4P: 878.54 T2: 406.72 M1: minus 133.70 (T1+T2 minus M1) divided by S1: 1,008.11 M: minus 963.70 T: 44.41 PP: 24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 + K2 + K4: 1,871.92 T1: 867.02 K1P + K2P + K4P: 878.55 T2: 406.92 M1: minus 133.70 (T1+T2 minus M1) divided by S1: 1,052.53 M: minus 1,008.11 T: 44.42 PP: 25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 + K2 + K4: 1,871.95 T1: 867.41 K1P + K2P + K4P: 878.56 T2: 407.11 M1: minus 133.70 (T1+T2 minus M1) divided by S1: 1,096.94 M: minus 1,052.53 T: 44.41 PP: 26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 + K2 + K4: 1,871.98 T1: 867.77 K1P + K2P + K4P: 878.57 T2: 407.29 M1: minus 133.70 (T1+T2 minus M1) divided by S1: 1,141.36 M: minus 1,096.94 T: 44.42 Total tax deducted for the year on regular salary $1,141.36 Total tax deducted for the year on non-periodic payments 133.70 Total tax deducted for the year on salary and non-periodic payments $1,275.06 * 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 66. YTD = year-to-date PAGE 83 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: 1,881.75 T3: 1,004.25 Add'l Tax: 482.04 T1: 1,486.29 (T1 minus M1) divided by S1: 57.17 T: 57.17 PP: 2 Salary: 740 I YTD: 1,480 A: 19,240.00 K1 + K2 + K4: 1,881.75 T3: 1,004.25 Add'l Tax: 482.04 T1: 1,486.29 (T1 minus M1) divided by S1: 114.33 M: minus 57.17 T: 57.16 PP: 3 Salary: 740 I YTD: 2,220 A: 19,240.00 K1 + K2 + K4: 1,881.75 T3: 1,004.25 Add'l Tax: 482.04 T1: 1,486.29 (T1 minus M1) divided by S1: 171.50 M: minus 114.33 T:57.17 PP: 4 Salary: 740 I YTD: 2,960 A: 19,240.00 K1 + K2 + K4: 1,881.75 T3: 1,004.25 Add'l Tax: 482.04 T1: 1,486.29 (T1 minus M1) divided by S1: 228.66 M: minus 171.50 T: 57.16 PP: 4B I YTD: 2,960 B: 100 B1: 100 A: 19,340.00 K1 + K2 + K4: 1,882.75 T3: 1,018.25 Add'l Tax: 488.76 T1: 1,507.01 (T1 minus M1) divided by S1: see* M: minus 228.66 TB: 20.72 PP: 5 Salary: 680 I YTD: 3,640 B1: 100 A: 19,028.00 K1 + K2 + K4: 1,879.63 T3: 974.57 Add'l Tax: 467.79 T1: 1,442.36 M1: minus 20.72 (T1 minus M1) divided by S1: 273.39 M: minus 228.66 T: 44.73 PP: 6 Salary: 510 I YTD: 4,150 B1: 100 A: 18,083.33 K1 + K2 + K4: 1,870.16 T3: 842.34 Add'l Tax: 404.32 T1: 1,246.66 M1: minus 20.72 (T1 minus M1) divided by S1: 282.91 M: minus 273.39 T: 9.52 PP: 7 Salary: 680 I YTD: 4,830 B1: 100 A: 18,040.00 K1 + K2 + K4: 1,869.72 T3: 836.28 Add'l Tax: 401.41 T1: 1,237.69 M1: minus 20.72 (T1 minus M1) divided by S1: 327.65 M: minus 282.91 T: 44.74 PP: 7B I YTD: 4,830 B: 50 B1: 150 A: 18,090.00 K1 + K2 + K4: 1,870.22 T3: 843.28 Add'l Tax: 404.77 T1: 1,248.05 M1: minus 20.72 (T1 minus M1) divided by S1: see* M: minus 327.65 TB: 10.36 PP: 8 Salary: 680 I YTD: 5,510 B1: 150 A: 18,057.50 K1 + K2 + K4: 1,869.90 T3: 838.73 Add'l Tax: 402.59 T1: 1,241.32 M1: minus 31.08 (T1 minus M1) divided by S1: 372.38 M: minus 327.65 T: 44.73 PP: 9 Salary: 680 I YTD: 6,190 B1: 150 A: 18,032.22 K1 + K2 + K4: 1,869.64 T3: 835.19 Add'l Tax: 400.89 T1: 1,236.08 M1: minus 31.08 (T1 minus M1) divided by S1: 417.12 M: minus 372.38 T: 44.74 PP: 10 Salary: 680 I YTD: 6,870 B1: 150 A: 18,012.00 K1 + K2 + K4: 1,869.44 T3: 832.36 Add'l Tax: 399.53 T1: 1,231.89 M1: minus 31.08 (T1 minus M1) divided by S1: 461.85 M: minus 417.12 T: 44.73 PP: 11 Salary: 680 I YTD: 7,550 B1: 150 A: 17,995.45 K1 + K2 + K4: 1,869.28 T3: 830.04 Add'l Tax: 398.42 T1: 1,228.46 M1: minus 31.08 (T1 minus M1) divided by S1: 506.58 M: minus 461.85 T: 44.73 PP: 12 Salary: 485 I YTD: 8,035 B1: 150 A: 17,559.17 K1 + K2 + K4: 1,864.91 T3: 768.97 Add'l Tax: 369.11 T1: 1,138.08 M1: minus 31.08 (T1 minus M1) divided by S1: 510.92 M: minus 506.58 T: 4.34 PP: 13 Salary: 680 I YTD: 8,715 B1: 150 A: 17,580.00 K1 + K2 + K4: 1,865.11 T3: 771.89 Add'l Tax: 370.51 T1: 1,142.40 M1: minus 31.08 (T1 minus M1) divided by S1: 555.66 M: minus 510.92 T: 44.74 PP: 14 Salary: 740 I YTD: 9,455 B1: 150 A: 17,709.29 K1 + K2 + K4: 1,866.41 T3: 789.98 Add'l Tax: 379.19 T1: 1,169.17 M1: minus 31.08 (T1 minus M1) divided by S1: 612.82 M: minus 555.66 T: 57.16 PP: 14B I YTD: 9,455 B: 500 B1: 650 A: 18,209.29 K1 + K2 + K4: 1,871.42 T3: 859.97 Add'l Tax: 412.79 T1: 1,272.76 M1: minus 31.08 (T1 minus M1) divided by S1: see* M: minus 612.82 TB: 103.59 PP: 15 Salary: 680 I YTD: 10,135 B1: 650 A: 18,217.33 K1 + K2 + K4: 1,871.50 T3: 861.10 Add'l Tax: 413.33 T1: 1,274.43 M1: minus 134.67 (T1 minus M1) divided by S1: 657.55 M: minus 612.82 T: 44.73 PP: 16 Salary: 680 I YTD: 10,815 B1: 650 A: 18,224.38 K1 + K2 + K4: 1,871.57 T3: 862.09 Add'l Tax: 413.80 T1: 1,275.89 M1: minus 134.67 (T1 minus M1) divided by S1: 702.29 M: minus 657.55 T: 44.74 PP: 17 Salary: 680 I YTD: 11,495 B1: 650 A: 18,230.59 K1 + K2 + K4: 1,871.63 T3: 862.96 Add'l Tax: 414.22 T1: 1,277.18 M1: minus 134.67 (T1 minus M1) divided by S1: 747.03 M: minus 702.29 T: 44.74 PP: 18 Salary: 680 I YTD: 12,175 B1: 650 A: 18,236.11 K1 + K2 + K4: 1,871.69 T3: 863.73 Add'l Tax: 414.59 T1: 1,278.32 M1: minus 134.67 (T1 minus M1) divided by S1: 791.76 M: minus 747.03 T: 44.73 PP: 19 Salary: 680 I YTD: 12,855 B1: 650 A: 18,241.05 K1 + K2 + K4: 1,871.74 T3: 864.42 Add'l Tax: 414.92 T1: 1,279.34 M1: minus 134.67 (T1 minus M1) divided by S1: 836.49 M: minus 791.76 T: 44.73 PP: 20 Salary: 680 I YTD: 13,535 B1: 650 A: 18,245.50 K1 + K2 + K4: 1,871.79 T3: 865.04 Add'l Tax: 415.22 T1: 1,280.26 M1: minus 134.67 (T1 minus M1) divided by S1: 881.22 M: minus 836.49 T: 44.73 PP: 21 Salary: 680 I YTD: 14,215 B1: 650 A: 18,249.52 K1 + K2 + K4: 1,871.83 T3: 865.60 Add'l Tax: 415.49 T1: 1,281.09 M1: minus 134.67 (T1 minus M1) divided by S1: 925.95 M: minus 881.22 T: 44.73 PP: 22 Salary: 680 I YTD: 14,895 B1: 650 A: 18,253.18 K1 + K2 + K4: 1,871.86 T3: 866.12 Add'l Tax: 415.74 T1: 1,281.86 M1: minus 134.67 (T1 minus M1) divided by S1: 970.70 M: minus 925.95 T: 44.75 PP: 23 Salary: 680 I YTD: 15,575 B1: 650 A: 18,256.52 K1 + K2 + K4: 1,871.90 T3: 866.58 Add'l Tax: 415.96 T1: 1,282.54 M1: minus 134.67 (T1 minus M1) divided by S1: 1,015.42 M: minus 970.70 T: 44.72 PP: 24 Salary: 680 I YTD: 16,255 B1: 650 A: 18,259.58 K1 + K2 + K4: 1,871.92 T3: 867.02 Add'l Tax: 416.17 T1: 1,283.19 M1: minus 134.67 (T1 minus M1) divided by S1: 1,060.17 M: minus 1,015.42 T: 44.75 PP: 25 Salary: 680 I YTD: 16,935 B1: 650 A: 18,262.40 K1 + K2 + K4: 1,871.95 T3: 867.41 Add'l Tax: 416.36 T1: 1,283.77 M1: minus 134.67 (T1 minus M1) divided by S1: 1,104.90 M: minus 1,060.17 T: 44.73 PP: 26 Salary: 680 I YTD: 17,615 B1: 650 A: 18,265.00 K1 + K2 + K4: 1,871.98 T3: 867.77 Add'l Tax: 416.53 T1: 1,284.30 M1: minus 134.67 (T1 minus M1) divided by S1: 1,149.63 M: minus 1,104.90 T: 44.73 Total tax deducted for the year on regular salary $1,149.63 Total tax deducted for the year on non-periodic payments 134.67 Total tax deducted for the year on salary and non-periodic payments $1,284.30 * 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 66. YTD = year-to-date PAGE 84 Part B - Canada Pension Plan (CPP) Employee and employer CPP contributions for 2010 \\ For 2010, the Canada Pension Plan (CPP) maximum pensionable earnings are $47,200, 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 $2,163.15. 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 2010 is $47,290.90. \\ 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 divided by 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) $2,163.15 minus D; and (ii) 0.0495 multiplied by [PI minus ($3,500 divided by P)] \\ If the result is negative, C = $0. Formula to determine CPP contributions for employees remunerated by commission only C = The lesser of: \\ (i) $2,163.15 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. 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 85. 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 where applicable. For more information about income subject to Canada Pension Plan contributions, see the employers' guide called Payroll Deductions and Remittances. 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 PAGE 85 the employee on Form TD1X, under the heading "Statement of remuneration." 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 divided by P) used to determine the employee's contributions for the pay period has to remain 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 beginning of the year (e.g., for weekly, 52 or 53 pay periods may apply, and, for bi-weekly, 26 or 27 pay periods may apply.) This is to ensure that you have deducted the employees' contributions properly. Special CPP situations \\ You will have to either start deducting, 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 HRSDC - 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 ceases to be 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 QPP. For information, see the 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. \\ PAGE 86 Year-end calculation of deductions for employee's Canada Pension Plan (CPP) contributions \\\ The following year-end calculation will help you verify an employee's CPP contributions before you complete and file the T4 slips. This optional calculation is the only one we authorize. It is not, however, applicable 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. Subtract from line 1, 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 a CPP retirement pension $^ -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 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 applicable to the earnings listed in section B above ^ Line 4: Pro-rated 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 at line 9 is negative, you have over-deducted. If this is the case, verify the employee's master file to ensure 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 87 Employee's CPP basic exemption for various pay periods for 2010 \\\ 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 \\\ Pay period Basic exemption PAGE 88 Part C - Employment Insurance (EI) Employee and employer EI premiums for 2010 \\ For 2010, the maximum annual insurable earnings are $43,200 and the premium rate is 1.73% for a maximum annual premium of $747.36 for the country except for Quebec and 1.36% for a maximum annual premium of $587.52 for Quebec. \\ 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: Service Canada Premium Reduction Program 120 Harbourview Boulevard P.O. 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. Once 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 the employee may have had with another employer in the same year. Similarly, employers are not entitled to a refund of premiums if the employee leaves the employment during the year. Employees who earn $2,000 or less in a year can claim a refund on their personal tax returns for all the EI premiums they paid. However, the employer cannot reduce or refund premiums on this basis, nor is the employer entitled to a refund for such employees. For purposes of the Record of Employment, the employer will also need to determine the 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 Consult Service Canada for help and instructions on completing a Record of Employment. 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 the EI premiums for 2010 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) $747.36 minus D1; and (ii) 0.0173 multiplied by IE \\ For employees in Quebec only: \\ EI = the lesser of (i) $587.52 minus D1; and (ii) 0.0136 multiplied by IE* * Round the resulting amount(s) in (ii) to the nearest $0.01. PAGE 89 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 $43,200 of insurable earnings are paid. Example: An employee makes $30,000 of insurable earnings in Ontario and changes his province of employment to Quebec and makes an additional $40,000 with the same employer. The employee's maximum premium is calculated as follows: In Ontario: $30,000 multiplied by 1.73% = $519.00 In Quebec: $13,200 multiplied by 1.36% = $179.52 Totals: ($30,000 + $13,200) $43,200 = ($519.00 + $179.52) $698.52 Canada Revenue Agency and Revenu Québec will reconcile adjustments to EI and QPIP premiums for trans-border employees. It is anticipated that adjustments between the EI and QPIP deductions will be resolved through the filing of the income tax 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. 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 ensure that the amount on line 1 is correct. Refer to the employers' guide called Payroll Deductions and Remittances, for information on refunding EI overpayments. \\\ PAGE 90 Part D - Summary Sheet We have created this page as a simple information sheet that you can tear out of this publication and use as a quick summary for inputting the new figures into your programs. There is nothing new presented here so if you have any questions concerning the amounts below then 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: *** \\\ FED Tax Bracket Rates First: 0.15 Second: 0.22 Third: 0.26 Fourth: 0.29 Basic Amt: 10,382 Spouse Amt: 10,382 Child Amt: 2,101 Index Rate: 0.6% CEC: 1,051 AB Tax Bracket Rates First: 0.1 Basic Amt: 16,825 Spouse Amt: 16,825 Index Rate: 0.3% BC Tax Bracket Rates First: 0.0506 Second: 0.077 Third: 0.105 Fourth: 0.1229 Fifth: 0.147 Basic Amt: 11,000 Spouse Amt: 9,653 Index Rate: 0.4% MB Tax Bracket Rates First: 0.108 Second: 0.1275 Third: 0.174 Basic Amt: 8,134 Spouse Amt: 8,134 NB Tax Bracket Rates First: 0.093 Second: 0.125 Third: 0.133 Fourth: 0.143 Basic Amt: 8,777 Spouse Amt: 7,453 Index Rate: 2.0% NL Tax Bracket Rates First: 0.077 Second: 0.128 Third: 0.155 Basic Amt: 7,833 Spouse Amt: 6,400 Index Rate: 0.7% NT Tax Bracket Rates First: 0.059 Second: 0.086 Third: 0.122 Fourth: 0.1405 Basic Amt: 12,740 Spouse Amt: 12,740 Index Rate: 0.6% NS Tax Bracket Rates First: 0.0879 Second: 0.1495 Third: 0.1667 Fourth: 0.175 Basic Amt: 8,231 Spouse Amt: 6,989 NU Tax Bracket Rates First: 0.04 Second: 0.07 Third: 0.09 Fourth: 0.115 Basic Amt: 11,714 Spouse Amt: 11,714 Index Rate: 0.6% ON Tax Bracket Rates First: 0.0505 Second: 0.0915 Third: 0.1116 Basic Amt: 8,943 Spouse Amt: 7,594 Index Rate: 0.7% PE Tax Bracket Rates First: 0.098 Second: 0.138 Third: 0.167 Basic Amt: 7,708 Spouse Amt: 6,546 *QC Quebec Abatement is 16.5% SK Tax Bracket Rates First: 0.11 Second: 0.13 Third: 0.15 Basic Amt: 13,348 Spouse Amt: 13,348 Child Amt: 4,944 Index Rate: 0.6% YT Tax Bracket Rates First: 0.0704 Second: 0.0968 Third: 0.1144 Fourth: 0.1276 Basic Amt: 10,382 Spouse Amt: 10,382 Child Amt: 2,101 Index Rate: 0.6% CEC: 1,051 OC 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: *** \\\ FED Tax Bracket Income Thresholds First: 0 Second: 40,970 Third: 81,941 Fourth: 127,021 LCP Rate: 0.15 LCP Amt: 750 AB: Columns without information BC Tax Bracket Income Thresholds First: 0 Second: 35,859 Third: 71,719 Fourth: 82,342 Fifth: 99,987 LCP Rate: 0.15 LCP Amt: 2,000 S: 390 MB Tax Bracket Income Thresholds First: 0 Second: 31,000 Third: 67,000 LCP Rate: 0.15 LCP Amt: 1,800 NB Tax Bracket Income Thresholds First: 0 Second: 36,421 Third: 72,843 Fourth: 118,427 LCP Rate: 0.2 LCP Amt: 2,000 NL Tax Bracket Income Thresholds First: 0 Second: 31,278 Third: 62,556 LCP Rate: 0.2 LCP Amt: 2,000 NT Tax Bracket Income Thresholds First: 0 Second: 37,106 Third: 74,214 Fourth: 120,656 LCP Rate: 0.15 & 0.30 LCP Amt: 750 & 28,500 NS Tax Bracket Income Thresholds First: 0 Second: 29,590 Third: 59,180 Fourth: 93,000 V1 Rate: 0.1 V1 Amt: 10,000 LCP Rate: 0.20 LCP Amt: 2,000 NU Tax Bracket Income Thresholds First: 0 Second: 39,065 Third: 78,130 Fourth: 127,021 ON Tax Bracket Income Thresholds First: 0 Second: 37,106 Third: 74,214 V1 Rate: 0.2 & 0.36 V1 Amt: 4,006 & 5,127 LCP Rate: 0.1 LCP Amt: 750 S: 206 PE Tax Bracket Income Thresholds First: 0 Second: 31,984 Third: 63,969 V1 Rate: 0.1 V1 Amt: 12,500 *QC Quebec Abatement is 16.5% SK Tax Bracket Income Thresholds First: 0 Second: 40,354 Third: 115,297 LCP Rate: 0.20 LCP Amt: 1,000 YT Tax Bracket Income Thresholds First: 0 Second: 40,970 Third: 81,941 Fourth: 127,021 V1 Rate: 0.05 V1 Amt: 6,000 LCP Rate: 0.25 LCP Amt: 1,250 OC Outside Canada surtax rate is 48% \\\ * Note: Quebec calculates its own provincial amounts therefore they are not included here