Canadian payroll tax functions

ActivityHD supports the Canadian tax functions discussed in the following sections along with their required arguments. Refer to "Payroll Deductions Formulas for Computer Programs" for more information.

Tax is reported as a single number on cheque stubs and T4 slips, so it is a single cheque line. A typical calculation calls both federal and province tax functions and adds the amounts together.

Example of tax function (Ontario)

CAN(Source, Type:Tax:TC, SumCheck('CPP Withheld'), SumYTD('CPP Withheld'), SumCheck('EI Withheld'), SumYTD('EI Withheld'), Type:Tax:HDF1, Type:Tax:K3, Type:Tax:LCF) + ON(Source, Tax:ON:Depend, Tax:ON:TCP, SumCheck('CPP Withheld'), SumYTD('CPP Withheld'), SumCheck('EI Withheld'), SumYTD('EI Withheld'), Type:Tax:HDF1, Tax:ON:K3), Type:Tax:LCF)

Canada (CAN)

CAN(GrossRemuneration, TotalClaimAmount, CPPThisCheque, CPPYearToDate, EIThisCheque, EIYearToDate, AnnualDeductions, OtherTaxCredits, LabourCreditShares)

  • GrossRemuneration = Gross remuneration for the pay period (I - F - F2 - U1)
  • TotalClaimAmount = The total claim amount reported on Form TD1 (TC).
  • CPPThisCheque = Canada Pension Plan contributions for the pay period (C)
  • CPPYearToDate = Canada Pension Plan contributions for the year.
  • EIThisCheque = Employment Insurance contributions for the pay period (EI)
  • EIYearToDate = Employment Insurance contributions for the year.
  • AnnualDeductions = Annual deduction for living in a prescribed zone (HD) + other annual deductions (F1)
  • OtherTaxCredits = Other federal tax credits (K3)
  • LabourCreditShares = Approved shares of the capital stock of a prescribed labour-sponsored venture capital corporation

Alberta (AB)

AB tax deduction calculation

AB(GrossRemuneration, TotalClaimAmount, CPPThisCheque, CPPYearToDate, EIThisCheque, EIYearToDate, AnnualDeductions, OtherTaxCredits, LabourCreditShares)

  • GrossRemuneration = Gross remuneration for the pay period (I - F - F2 - U1)
  • TotalClaimAmount = The total claim amount reported on Form TD1AB (TCP).
  • CPPThisCheque = Canada Pension Plan contributions for the pay period (C)
  • CPPYearToDate = Canada Pension Plan contributions for the year.
  • EIThisCheque = Employment Insurance contributions for the pay period (EI)
  • EIYearToDate = Employment Insurance contributions for the year.
  • AnnualDeductions = Annual deduction for living in a prescribed zone (HD) + other annual deductions (F1)
  • OtherTaxCredits = Other provincial tax credits (K3P)
  • LabourCreditShares = Approved shares of the capital stock of a prescribed labour-sponsored venture capital corporation

British Columbia (BC)

BC tax deduction calculation

BC(GrossRemuneration, TotalClaimAmount, CPPThisCheque, CPPYearToDate, EIThisCheque, EIYearToDate, AnnualDeductions, OtherTaxCredits, LabourCreditShares)

  • GrossRemuneration = Gross remuneration for the pay period (I - F - F2 - U1)
  • TotalClaimAmount = The total claim amount reported on Form TD1BC (TCP).
  • CPPThisCheque = Canada Pension Plan contributions for the pay period (C)
  • CPPYearToDate = Canada Pension Plan contributions for the year.
  • EIThisCheque = Employment Insurance contributions for the pay period (EI)
  • EIYearToDate = Employment Insurance contributions for the year.
  • AnnualDeductions = Annual deduction for living in a prescribed zone (HD) + other annual deductions (F1)
  • OtherTaxCredits = Other provincial tax credits (K3P)
  • LabourCreditShares = Approved shares of the capital stock of a prescribed labour-sponsored venture capital corporation

Manitoba (MB)

MB tax deduction calculation

MB(GrossRemuneration, TotalClaimAmount, CPPThisCheque, CPPYearToDate, EIThisCheque, EIYearToDate, AnnualDeductions, OtherTaxCredits, LabourCreditShares)

  • GrossRemuneration = Gross remuneration for the pay period (I - F - F2 - U1)
  • TotalClaimAmount = The total claim amount reported on Form TD1MB (TCP).
  • CPPThisCheque = Canada Pension Plan contributions for the pay period (C)
  • CPPYearToDate = Canada Pension Plan contributions for the year.
  • EIThisCheque = Employment Insurance contributions for the pay period (EI)
  • EIYearToDate = Employment Insurance contributions for the year.
  • AnnualDeductions = Annual deduction for living in a prescribed zone (HD) + other annual deductions (F1)
  • OtherTaxCredits = Other provincial tax credits (K3P)
  • LabourCreditShares = Approved shares of the capital stock of a prescribed labour-sponsored venture capital corporation

Ontario (ON)

ON tax deduction calculation

ON(GrossRemuneration, NumberOfDependents, TotalClaimAmount, CPPThisCheque, CPPYearToDate, EIThisCheque, EIYearToDate, AnnualDeductions, OtherTaxCredits, LabourCreditShares)

  • GrossRemuneration = Gross remuneration for the pay period (I - F - F2 - U1)
  • NumberOfDependents = The total number of disabled dependents (on Form TD1ON plus other written requests)
  • TotalClaimAmount = The total claim amount reported on Form TD1ON (TCP).
  • CPPThisCheque = Canada Pension Plan contributions for the pay period (C)
  • CPPYearToDate = Canada Pension Plan contributions for the year.
  • EIThisCheque = Employment Insurance contributions for the pay period (EI)
  • EIYearToDate = Employment Insurance contributions for the year.
  • AnnualDeductions = Annual deduction for living in a prescribed zone (HD) + other annual deductions (F1)
  • OtherTaxCredits = Other provincial tax credits (K3P)
  • LabourCreditShares = Approved shares of the capital stock of a prescribed labour-sponsored venture capital corporation

Saskatchewan (SK)

SK tax deduction calculation

SK(GrossRemuneration, TotalClaimAmount, CPPThisCheque, CPPYearToDate, EIThisCheque, EIYearToDate, AnnualDeductions, OtherTaxCredits, LabourCreditShares)

  • GrossRemuneration = Gross remuneration for the pay period (I - F - F2 - U1)
  • TotalClaimAmount = The total claim amount reported on Form TD1SK (TCP).
  • CPPThisCheque = Canada Pension Plan contributions for the pay period (C)
  • CPPYearToDate = Canada Pension Plan contributions for the year.
  • EIThisCheque = Employment Insurance contributions for the pay period (EI)
  • EIYearToDate = Employment Insurance contributions for the year.
  • AnnualDeductions = Annual deduction for living in a prescribed zone (HD) + other annual deductions (F1)
  • OtherTaxCredits = Other provincial tax credits (K3P)
  • LabourCreditShares = Approved shares of the capital stock of a prescribed labour-sponsored venture capital corporation

Outside Canada (OC)

There is no tax function for employees who live in Canada but work outside the country. According to CRA Plublication T4127, such employees pay a surtax on their federal income tax. Instead of adding a province tax to the federal tax, multiply the federal tax by 1 plus the surtax rate (defined in a segment item parameter).

CAN(Source, Type:Tax:TC, SumCheck('CPP Withheld'), SumYTD('CPP Withheld'), SumCheck('EI Withheld'), SumYTD('EI Withheld'), Type:Tax:HDF1, Type:Tax:K3, Type:Tax:LCF) * (1 + (Tax:OC:Surtax / 100))