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Which Province's Tax Tables Should I Use for my Employee?
The employee's province or territory of employment (POE) depends on whether or not your employee is required to report for work at your place of business.
Employee Reports to Employer's Place of Business
Employee Not Required to Report for Work to Your Place of Business
- New Administrative Policy January 1, 2024
Non-Resident/Part-Year Resident/Deemed Resident Employees
Business Has No Permanent Establishment in Canada
Taxes Deducted Differ From Employee's Province of Residence
Canada Revenue Agency (CRA) Resources
Employee Reports to Employer's Place of Business
If your employee lives in one province, but reports to your place of business in another province, then use the tax tables for the province of your place of business.
Employee Not Required to Report for Work to Your Place of Business
Previous policy: If your employee is not required to report for work to your place of business, then you should use the tax tables for the province or territory in which your business is located, and from where you pay the employee's salary. If the employee is working from home in another province, you would still use the tax tables for the province or territory from where you pay the employee's salary.
New CRA Administrative Policy January 1, 2024
If your employee is not required to report for work to your place of business, then all facts relevant to the employee's situation must be considered, to determine if the employee can be reasonably considered "attached to an establishment of the employer". The POE is where the employee physically reports for work or is considered attached.
If the employee does not physically report and is not considered attached, then the POE is where the establishment of the employee's salary is paid or located, which is either:
 | the location of the employer's payroll department or payroll records, or |
| the establishment which actually incurs the expense. |
If a full-time remote work agreement was made between the employee and employer, the employee can be reasonably considered "attached to an establishment of the employer".
Your "place of business" does not have to be a permanent location, but can include temporary locations such as a construction site.
When the POE is Quebec, QPP and QPIP contributions must be deducted, not CPP contributions, regardless of the employee's province of residence.
See Canada Revenue Agency Determine the province of employment (POE), which includes interactive questions to help employers what POE to use.
Non-Resident/Part-Year Resident/Deemed Resident Employees
If an employee is a non-resident, but works in Canada for the employer, even if the employer does not have an establishment in Canada, the POE is where the employment duties are performed.
If the employee is a part-year resident, for the part of the year that they are a resident, their POE will be determined in the same manner as any other resident. For the part of the year that they are not a resident of Canada, the POE is where the employment duties are performed.
If the employee is a deemed resident or sojourner, but works in Canada for the employer, even if the employer does not have an establishment in Canada, the TD1 federal form will be used, and the tax tables titled "In Canada Beyond the Limits of any Province or Outside Canada Payroll Deductions Tables" would be used.
Business Has No Permanent Establishment in Canada
If your business does not have a permanent establishment in Canada, but you have Canadian resident employees working in Canada, then you would use the tax tables titled "In Canada Beyond the Limits of any Province or Outside Canada Payroll Deductions Tables".
Taxes Deducted Differ From Employee's Province of Residence
Due to the fact that the employee will file their tax return for their province of residence, the amount of taxes deducted at source may be too much or too little. If there will be a big difference at the end of the year, the employee can request either increased or reduced income tax deductions. Increasing tax deductions can be done by requesting this on the TD1 form. To reduce tax deductions in this situation, the employee must complete a Letter of Authority which takes Canada Revenue Agency (CRA) 4 to 6 weeks to process.
For more information and examples, see the link below to the CRA information on this topic.
Non-employment Income
For payments of pensions and retiring allowances, the provincial or territorial tables of the recipient's province or territory of residence should be used.
Canada Revenue Agency (CRA) Resources
Payroll Deductions Online Calculator which is free of charge
Determine the province of employment (POE) - includes January 1, 2024 new CRA administrative policy.
Payroll deductions and contributions
Which provincial or territorial tax tables should you use?
Related Article:
For Which Province do I File a Tax Return?
Revised: November 19, 2024