Canada Revenue Agency

 

Guidelines for withholding income tax, and deducting Canada Pension Plan (CPP) and employment insurance (EI) for Sea

It is important for the success of the Seasonal Agricultural Workers Program, as well as for the workers, that all employers properly withhold the required amounts of income tax, CPP contributions, and EI premiums. For information regarding the Program, see Guide RC4004, Seasonal Agricultural Workers Program. For information regarding withholding and deducting these amounts, see Guide T4001, Employers’ Guide – Payroll Deductions and Remittances.

Form TD1, Personal Tax Credits Return – federal and provincial

In Canada, taxation is based on residency. A worker must determine his residency status before determining how he will be taxed. Workers in the Seasonal Agricultural Workers Program are considered non-residents, deemed non-residents or deemed residents. For more information, see Guide RC4004, Seasonal Agricultural Workers Program.

The federal and provincial TD1 forms outline personal credits that employees can claim when filing their income tax return. There are different federal and provincial personal claim amounts and claim codes, and separate payroll deductions tables. Claim codes do not appear on the TD1 forms, but are included in Guide T4032, Payroll Deductions Tables.

•      A revised TD1 form only needs to be completed if there is a change that will affect an employee’s income tax return.

•      A copy of the original TD1 form must accompany any worker who is transferred between employers.

•      Do not accept TD1 forms that have been physically altered. Contact the liaison officer if you encounter an altered TD1 form.

Canada Pension Plan (CPP)

CPP contributions must be deducted for all workers who are in pensionable employment. For more information, see Guide T4001, Employers’ Guide – Payroll Deductions and Remittances.

Employment insurance (EI)

EI premiums must be deducted for all workers who are in insurable employment.  For more information, see Guide T4001, Employers’ Guide – Payroll Deductions and Remittances.

T4 information return and slips

Employers have to file 2015 T4 information return by the last day of February 2016. Employers must deliver or mail two copies of the 2015 T4 slips to their workers by the last day of February 2016 . Make sure that code 15 is entered in box 29 “Employment code” on the T4 slip for each of your foreign seasonal agricultural workers. This will identify the worker as being in the Program. For more information, see Guide RC4120, Employers’ Guide – Filing the T4 Slip and Summary.

Income tax returns

The Canada Revenue Agency (CRA) encourages all foreign seasonal agricultural workers to file a T1 income tax return for every year that they are employed in

Canada. If you complete T1 income tax returns on behalf of your workers, make sure of the following:

Workers from  countries with which Canada has a tax treaty should file  a 

T1 General -  Income Tax and Benefit Return for the province or territory where they were employed;   

Workers from countries that do not have a tax-treaty who were in Canada less than 183 days are considered non-residents and should file a T1 General - Income Tax and Benefit Return for the province or territory where they were employed.

.        Workers from non-treaty countries who are in Canada for more than 182 days should file Form 5013-R, T1 General Income Tax and Benefit Return for Non-residents and Deemed Residents of Canada;

.        In certain situations, a worker my be subject to taxation in two or more jurisdictions (employed in more than one province in the same tax year). For more information regarding multiple jurisdictions, see Guide RC4004, Seasonal Agricultural Worker Program;

•        All  2015 T1 returns are sent by April 30, 2016 to the  International and  Ottawa Tax Services Office, Returns Processing Division, Post Office Box 9769, Station T, Ottawa  ON  K1G 3Y4;     

.        Write “Seasonal Agricultural Worker” on the top of page 1 of each return;

On page 1 – Information about your residence, do the following:

♦  On the first line, enter the province or territory where the worker earned employment income in Canada. If the worker is from a non-treaty country and is in Canada for more than 182 days, enter “Other” on the first line;

♦  On the second line, enter the name of the country where the worker normally resides; and    

•        The following schedules and forms must be completed and attached to each return:

         −  Form T1248 (Schedule D), Information About Your Residency Status;

         −  Schedule 1, Federal Tax, to claim federal non-refundable tax credits;

         −  Provincial tax  Form 428, to claim provincial non-refundable tax credits. This does not apply to workers who are from a non-treaty country who are filing Form 5013-R, T1 General Income Tax and Benefit Return for Non-residents and Deemed Residents of Canada;

         -  TD1 forms, copies of the federal and provincial TD1s;

         −  T4 slips;

         −  Schedule A, Statement of World Income (Form 5013SA); and

         −  Schedule 5, Amounts for Spouse or Common-law Partner and Dependants (only if the worker is claiming the eligible dependant amount).

Income Tax Withholding – Quick Rule of Thumb Table for 2016
 Country  Marital  Status 

 TD1 Total     Claim
  Amount   (Line 13)

 Worker      Earnings 

 Federal
  Claim
   
Code

Withholding requirements, based on federal TD1 total claim amount of:  Basic personal amount of $11,474; with spousal amount $22,948   
 All  Married    $22,948

 More than
 $22,948

       7 Begin withholding from the first day of employment
 All  Married    $22,948

 Less than
 $22,948

       E No tax required to be withheld immediately.  If the earnings exceed
$22,948, income tax must be withheld starting at that point using claim code "0"
 Barbados  Single   $11,474

 More than
 $10,000

        I Begin withholding from the first day of employment
 Barbados  Single   $11,474

 Less than
 $10,000

 E/Waiver  No tax required to be withheld immediately.  If the earnings exceed
$10,000, income tax must be withheld starting at that point using claim code "0"
 Mexico  Single   $11,474

 More than
 $16,000

        I Begin withholding fromt he first day of employment.
 Mexico  Single   $11,474

 Less than
 $16,000

       E No tax required to be withheld immediately.  If the earnings exceed
$16,000, income tax must be withheld starting at that point using claim code "0"

 All other
 Countries

 Single   $11,474

 More than
 $11,474

        I Begin withholding from the first day of employment.
 All other  Countries   Single   $11,474

 Less than
 $11,474

       E No tax required to be withheld immediately.  If the earnings exceed
$11,474, income tax must be withheld starting at that point using claim code "0"

Notes:

•      If you did not withhold based on a total claim amount less than $22,948 for a worker who is married, you have to withhold at claim code “0” once earnings $22,948. You should contact the liaison officer or consulate in this case, as the TD1 form may need to be revised.

•      Use either claim code “1” or “7” depending on the total claim on the TD1 form of all the personal tax credits for each worker. See the claim codes in the tax tables to determine the correct claim code for each worker.

•      “Married” refers to workers who are married, have a common-law partner, or are able to claim an amount for an eligible dependant (formerly called the equivalent-to-spouse amount).

•      "E/waiver" means that the tax tables indicate claim code E and/or the worker has a waiver on withholding approved by the CRA. The rule applies in either case.

Need more information?

You can get more information from the following publications, which are available on the CRA Web site at www.cra.gc.ca/forms or by calling CRA at 1-800-959-5525:

    •      Guide RC4004, Seasonal Agricultural Workers Program, provides details on the taxation of program participants, including filing workers’ income tax returns;

•      Guide T4001, Employers’ Guide – Payroll Deductions and Remittances;

•      Guide T4032, Payroll Deductions Tables; and

•      Guide RC4120, Employers’ Guide Filing the T4 Slip and Summary.

You can also get more information on employer issues by going to www.cra.gc.ca/payroll or by calling 1-800-959-5525.

If you want information about an individual worker’s tax return, refund cheque, balance owing, statement of account, on how to file income tax returns for workers, or how the provisions of tax treaties apply to seasonal agricultural workers, call the International and Ottawa Tax Services Office toll free at 1-800-959-8281 from anywhere in Canada and the United States or at 613-940-8495 from outside Canada or the United States.

The CRA accepts collect calls by automated response. Please note that you may hear a beep and experience a normal connection delay.

You can also write to :                      International and Ottawa Tax Services Office

                                                       Post Office Box 9769, Station T, Ottawa ON  K1G 3Y4

                                                       Fax:  613-941-2505

Note

Before CRA can give you a worker’s personal tax information, CRA must have received authorization (Form T1013, Authorizing or Cancelling a Representative or its equivalent) from the worker.