Payroll Legislation Basics
Calendars and Important Dates
CRA and COVID-19
Canada Pension Plan (CPP) - Quebec Pension Plan (QPP)
Canada Pension Plan (CPP) is a national insurance program that provides income for Canadians when they retire or if they become disabled. The Quebec Pension Plan (QPP) fulfills the same role in that province.
Employers are required by law to deduct CPP/QPP contributions from their employees' pay and to provide a matching contribution when the employee is in pensionable employment during the year.
- Working Canadians between the ages of 18 and 65 must contribute to the CPP unless they receive a disability pension from the plan or are exempt for another reason.
- If an employee over 65 years of age files a CPT30 form with CRA and provides the employer with a copy, CPP contributions can stop before the employee turns 70. If a CPT30 form is not filed, CPP contributions are to continue until age 70.
- Canadians working in Quebec over age 18 must contribute to the QPP unless they receive a disability pension from the plan or are exempt for another reason. There is no upper age limit after which QPP contributions can stop for an employee.
|Annual maximum pensionable earnings||$61,600||$61,600|
|Annual basic exemption||$3,500||$3,500|
|Annual maximum contributory earnings||$58,100||$58,100|
|Employee / Employer contribution rate||5.45%||5.90%|
|Annual maximum employee/employer contribution||$3,166.45||$3,427.90|
|By Payroll Frequency|
Both the CPP and QPP are gradually being enhanced as of 2019. The enhancements will lead to higher retirement benefits, in exchange for employees and employers making higher contributions.
Employment Insurance (EI) - Quebec Parental Insurance Plan (QPIP)
Employment Insurance (EI) provides temporary income support for unemployed Canadians who cannot work for reasons of sickness, childbirth, or parenting; or who are providing care or support to a family member who is gravely ill with a significant risk of death.
- EI also provides temporary financial assistance for unemployed Canadians while they look for work or upgrade their skills.
- Employers must deduct EI premiums from each dollar of their employees’ insurable earnings up to the yearly maximum. Most earnings in Canada are insurable. There is no age limit for deducting EI premiums.
- Employers are also required to contribute at a rate 1.4 times the EI premium withheld for each employee (unless eligible for a reduced rate).
The province of Quebec manages the maternity, parental, and adoption benefits for residents of Quebec under the Quebec Parental Insurance Plan (QPIP). All employers who have employees working in Quebec, regardless of the employee’s province or territory of residence, have to deduct a reduced employment insurance (EI) premium using a reduced EI premium rate as well as QPIP premiums.
- Both employers and employees must contribute to the Québec parental insurance plan (QPIP) in order to provide for the payment of benefits to employees who take unpaid maternity, paternity, adoption or parental leave.
- QPIP premiums must be paid regardless of the employee's age, the employee's place of residence (in general) and whether or not the employee receives benefits under the plan.
|Annual maximum insurable earnings||$56,300||$56,300||$83,500|
|Employee contribution rate||1.58%||1.18%||0.494%|
|Annual maximum employee contribution||$889.54||$664.34||$412.49|
|Annual maximum employer contribution||$1,245.36||$930.08||$577.82|
|Employer contribution rate||2.212%||1.652%||0.692%|
Federal/Provincial - Personal Tax Credits Forms
Canada levies a personal income tax on income earned. The amount any individual must pay is based on their taxable income (income earned less allowed expenses) for the tax year.
- As an employer or payer, you are responsible for deducting income tax from the remuneration or other income you pay.
- There is no age limit for deducting income tax and there is no employer contribution required.
TD1 Basic Tax Credit Amounts
|Newfoundland and Labrador||$9,536|
|Nova Scotia 1||$8,481*|
|Prince Edward Island||$10,500|
* Nova Scotia Exemption amount began to use a new BPA calculation starting 2018
** Federal & Yukon Exemption amount began to use new BPA calculation starting in 2020
Nova Scotia only - An additional Basic Personal Amount of $3,000 can be claimed by employees with an annual income of $25,000 or less. A partial credit can be claimed by employees with an annual income between $25,000 and $75,000. See form TD1NS-WS for details.
Lump Sum Tax Rates
Lump Sum Payments 2021
|Tax Withholding||Under $5,000||$5,001 - $15,000||Over $15,000|
|Federal/Provincial Tax (outside Quebec)||10%||20%||30%|
|Federal Tax - Quebec||5%||10%||15%|
|Provincial Tax - Quebec||15%||20%||20%|
Employment Standards, Minimum Wage, Workers Compensation, Garnishment/Support
The information provided in the following section provides a table of links to Employment/Labour Standards, WCB and Family Support agencies for each applicable jurisdiction. Employers should always check with the appropriate authority for the most current information.
All Canadian employers must meet or exceed minimum standards relating to minimum wage, overtime pay, maternity/parental leave, vacation pay, statutory holidays and terminations. Specific legislative requirements vary between provinces and territories.
Each province and territory administers the workers' compensation system within its jurisdiction. This no-fault insurance system is funded by employer-paid premiums. It ensures that employers share collective liability for work related injuries and illnesses, and injured workers receive a full range of benefits such as wage replacement, healthcare treatments and rehabilitation services.
Links to information on family support orders are included in this section as a resource. Ceridian suggests employers consult legal counsel if an order is unclear.
WCB Maximum Assessable Earnings by Province/Territory
For a list of the earnings that are taken into consideration when determining the amount an employer is assessed on (by jurisdiction), please refer to the Association of Workers’ Compensation Boards of Canada website.
|Province||Filing Deadline||2021 WCB Maximum Assessable Earnings|
|BC||Last day of February (Quarterly), March 1-15 (annually)||$100, 000|
|AB||Last day of February||$98, 700|
|SK||Last day of February||$91, 100|
|MB||Last day of February||$127, 000|
|ON||Last day of March||$102, 800|
|QC||Before March 15||$83, 500|
|NB||Last day of February||$67, 100|
|PE||Last day of February||$55, 300|
|NL||Last day of February||$67, 985|
|YT||Last day of February||$90, 750|
|NT||Last day of February||$97, 300|
|NU||Last day of February||$97, 300|
Payroll Tax and Guides
- Employers Guide to Payroll Deductions
- How to determine Province of Employment
- How to complete the Record of Employment
- Payroll Deductions Online Calculator
- Employer Guide to Filing T4s
- Payroll Deduction Formulas (T4127)
- CRA Publications Listed by Number
This chart will help you determine whether or not to deduct Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums, and income tax on the special payments you make to your employees or recipients. If the payment you are looking for is not in this chart, go to the Calculating deductions alphabetical index.
- Quebec Pension Plan (QPP)
- Quebec Parental Insurance Plan (QPIP)
- Tax Debt Seizable Portion
- Workforce Skills Development/Recognition Fund
- RL1- Summary of Source Deductions
- Guide to Filing the Rl-1 Slip: Employment and Other Income
The table on this webpage lists the different types of remuneration and for each type, specifies whether the remuneration is subject to source deductions and employer contributions.
Appendix 1 in this guide includes a table that will help determine whether the remuneration you pay is subject to source deductions and employer contributions.
- Formula Guide TP-1015.F-V
- Taxable Benefits
- Online Services, Forms, Publications
Payroll and HR Associations
The information on this web page is provided by Ceridian Canada Ltd. as a convenience to you. Ceridian does not warrant the accuracy or completeness of the information. Contents may be subject to change. Always check your circumstances with the proper authority for the most accurate and current information available.