Economical Monthly Payroll Services for Canadian Businesses

Not in the way a US employee can. Canadian employers must withhold based on the personal tax credits return you complete when hired, and claiming the credits you are entitled to there lowers the deduction. Where withholding will still exceed your real tax because of large RRSP contributions, support payments or deductible expenses, you can ask the CRA in writing to authorise reduced deductions at source. Otherwise the excess comes back as a refund after filing.

A flat monthly cash allowance for a phone is taxable employment income and appears on the T4. If the employer instead pays the carrier directly, or reimburses the business portion of a bill on receipts, and the plan is reasonable and mainly for work, there is normally no taxable benefit; personal use of a basic plan the employer already pays for is generally accepted. Keep records showing the business purpose.

Yes. Tips and gratuities are taxable income in Canada, whether paid in cash, added to a card payment or shared through a tip pool. Amounts your employer controls and distributes usually run through payroll and appear on your T4 with CPP and EI withheld. Tips you receive directly are still reportable even though nobody reports them for you, so keep a daily record. Leaving them out is a common reason a server's return is reassessed.

Withhold three things from each pay: income tax, CPP and EI. For 2026, CPP is 5.95% from the employee and 5.95% from the employer on pensionable earnings between the $3,500 basic exemption and the $74,600 ceiling, plus CPP2 at 4% up to $85,000. EI is $1.63 per $100 of insurable earnings for the employee, and the employer pays 1.4 times that. Use the CRA payroll deductions online calculator, then remit by your assigned due date.

Yes. Severance is employment income, so your employer withholds income tax before paying you. Lump sums are withheld at flat lump-sum rates that are often below your real marginal rate, so a large payout can still leave a balance owing at filing time. If part of the payment is a retiring allowance, some of it may be transferred directly to an RRSP and taxed later. Check the CRA's payroll deductions and lump-sum withholding pages.

In Canada, tax revenue funds public services rather than a single account. Federal revenue pays for elderly benefits, the Canada child benefit, health and social transfers to the provinces, defence, debt interest and federal operations; employment insurance is funded separately by premiums. Provincial and municipal taxes fund health care delivery, schools, roads, policing and waste collection. Actual amounts appear each year in the federal budget and the Public Accounts of Canada, and in each province's budget.

It means asking your employer not to deduct income tax from your pay. In Canada you do this on the personal tax credits return your employer gives you at hiring, where you confirm that total income for the year will be below your total claim amount. It covers income tax only, never CPP or EI. If you end up earning more than expected, the tax is still owed at filing with interest, so update the form when things change.

The Canada child benefit follows whoever is primarily responsible for the child's daily care, so the change is made by updating that with the CRA, not by signing the benefit over. The parent who should receive it applies for child benefits and both parents confirm the date care changed; the CRA may ask for supporting letters. Where custody is shared roughly equally, the CRA splits the payments. Provincial and territorial amounts follow the same determination.

Ontario's Employment Standards Act lists the public holidays and gives most employees public holiday pay whether or not they work that day. Eligibility turns on the last-and-first rule: the employee must work the scheduled shift before and the one after the holiday unless there is reasonable cause. Public holiday pay is set by a formula in the Act using regular wages earned in the weeks before the holiday, and an employee who works the day receives premium pay or a substitute day off.

No. Property tax is set by your municipality from the assessed value of the property and the annual tax rate, and neither changes because a mortgage was discharged. What changes is who pays it. Many lenders collect tax along with the mortgage payment and remit it for you, so once the loan is gone the municipality bills you directly and the full amount appears as its own instalment. Enrol in the municipality's payment plan so a bill is not missed.

A T4E is the slip Service Canada issues for Employment Insurance and certain related benefits. It shows the total benefits paid, income tax already withheld, any benefits you had to repay and any benefit repayment required because of your income level. Report the amounts on your personal return on the line for Employment Insurance and other benefits, not on the employment income line — EI benefits are taxable but they are not employment income. Keep the slip even where no tax was withheld, because the benefits remain taxable and the CRA already holds a copy.

Short-term disability benefits are taxable when the employer paid any part of the premiums for the wage-loss replacement plan, and the insurer reports them much like employment income. If the employee paid all of the premiums, the benefits arrive tax free. Where a plan is only partly employee funded, premiums the employee paid in earlier years can reduce the taxable amount. EI sickness benefits are taxable and appear on the slip the government issues.