Income tax

Information: Life events disclaimer

The following material is intended to provide you with information about some of the common types of change in employment situations and the effects it will have on your employment.

Income tax is withheld from your earnings in accordance with federal, provincial and territorial income tax regulations.

You may want to know...

Will income tax be withheld from my cheque based on my province of work or my province of residence?

Income tax is withheld based on the province where you report to work.

Will the appropriate amount of income tax be withheld from my cheque if I reside in a province and work in another province?

If you are an employee who works in a province other than the one in which you reside, or if you have another source of taxable income other than the taxable income paid to you by your employer, you may owe income tax upon the filing of your income tax return. If you think this may be your situation, you have the option of having additional income tax deducted at source. In order to initiate the deduction of additional income tax, a pay action request form must be sent to the Pay Centre accompanied by either a completed TD1 Personal Tax Credits Return form if you reside in a province or territory outside of Quebec, or a TP-1015.3-V Source Deductions Return form if you reside in Quebec.

As an alternative you can apply to have additional federal or Quebec income tax deducted from your salary by logging into the Compensation Web Applications (accessible only on the Government of Canada network) and indicating the amount you wish to have withheld from salary.

I only see one deduction for income tax on my pay stub, should I not have a deduction for federal income tax and one for provincial income tax?

The total amount to be deducted for federal and provincial income tax is determined from tax tables established by Canada Revenue Agency and Revenu Quebec applicable to the province or territory in which you report for work. If your province of work is Quebec, you will see both provincial and federal deductions on your pay stub. If your province of work is other than Quebec, you will see one income tax deduction on your pay stub. In these cases, behind the scenes and on a monthly basis, both the federal and provincial shares of income tax are adjusted but doesn’t mean that it’s sufficient.

Can I request to have income tax withheld at a reduced rate?

Under certain circumstances, you may be entitled to have tax withheld at a reduced rate. You will be required to apply in writing to the District Taxation Office at Canada Revenue Agency or the Revenue Quebec, advising of the details of your situation. If your request to have income tax withheld at a reduced rate is approved you will receive a letter of authority which should be provided to the Pay Centre under cover of a pay action request form in order that adjustments are made to the amount of income tax to be withheld.

Does the authority to have income tax withheld at a reduced rate continue from one year to the next?

The letter of authority from Canada Revenue Agency or Revenue Quebec will provide particulars as to the exemption amount and the period that the authority covers. Should the period expire or the exemption amount change you will be required to reapply to have the amount of income tax withheld at a reduced rate.

Can I request to have federal and or Quebec income tax withheld at a higher rate?

Should you wish to have additional federal income tax withheld from your earnings you should complete a TD1 Personal Tax Credits Return, indicating the additional amount you want to have deducted from each payment and forward it undercover of a pay action request form to the Pay Centre.

If you are a resident of Quebec and wish to have an additional specific amount of Quebec income tax deducted at source, you may do so by completing the pertinent section of the form TP-1015.3-V Source Deductions Return and forward it undercover of a pay action request form to the Pay Centre.

As an alternative, you can apply to have additional federal and/or Quebec income tax deducted from your salary by logging into the Compensation Web Applications (accessible only on the Government of Canada network) and indicating the amount you wish to have withheld from salary.

Will my request to have income tax withheld at a higher rate continue from one year to the next?

Your request to have income tax withheld at a higher rate will continue to apply until such time as you decide to change the amount and complete a new TD1 Personal Tax Credits Return to change your federal income tax or TP-1015.3-V Source Deductions Return to change your Quebec income tax deduction.

If I am entitled to earnings in one year but the payment date on my cheque is dated in January of the following year, which year will I be taxed in?

Income you have earned in one taxation year which you receive after January 1st of the following year is taxed in the year in which it is received.

If my income for the year will be less than my tax exemption, will tax be withheld from my pay cheque(s)?

If your estimated total income for the year will be less than your total claim amount, complete the Total income less than total claim amount on the reverse side of the TD1 Personal Tax Credits Return and forward it under cover of a pay action request form to the Pay Centre.

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