Calculating deductions

After you have determined that you are an employer, a trustee or a payer and have opened a payroll program account, you have to calculate the CPP contributions, EI premiums, and income tax deductions based on the amounts you pay your employees. You also have to calculate your share. You should hold these amounts in trust for the Receiver General in a separate account from your operating business account.

To find out if a payment requires CPP, EI, and income tax withholding, see the topics below.

All rates

Topics

• Canada Pension Plan (CPP)
• Employment insurance (EI)
• Income tax
• Methods of calculating deductions – CPP, EI, and income tax
• Special payments chart
• Benefits and allowances
  To find out if you should deduct CPP, EI, and income tax from benefits and allowances you give or pay, such as gifts, meals and housing.
• Deduction errors
  What to do if you overdeducted or underdeducted.
• Failure to deduct
  Penalty for failing to deduct the required amounts.
• Remitting payroll deductions
  How and when to remit payroll deductions.
• Non-resident deductions

Forms and publications

• Guide T4001, Employers' Guide – Payroll Deductions and Remittances
• Guide T4130, Employers' Guide – Taxable Benefits and Allowances
• Guide T4032, Payroll Deductions Tables
• Guide T4008, Payroll Deductions Supplementary Tables
• Guide T4127, Payroll Deductions Formulas for Computer Programs
• Form TD1, Personal Tax Credits Return
• Form TD1X, Statement of Commission Income and Expenses for Payroll Tax Deductions
• Form TD3F, Fisher's Election to Have Tax Deductions at Source
• Other publications for Canada Pension Plan and employment insurance (CPP/EI)

Related topics

• Correcting errors – Salary overpayment, and CPP and EI recovery and overpayment
• Employment Insurance Premium Rebate
• Administration of the Canada Pension Plan and the Employment Insurance Act (Canada Pension Plan and employment insurance explained)
• Employment Insurance (ESDC)
• Tax deduction estimator (form TD1) – Access this online tool to estimate deductions

Multimedia

• Video series: Payroll Information for a New Small Business

Date modified:

2015-12-29