Add or Modify an Employee's Tax Information

Related topics

Add or modify an employee's T4 or RL-1 report information

Update the personal tax credit amounts for all employees

To add or modify an employee's tax information:

  1. Open the Taxes tab in the employee record.
    1. In the Home window, click Employees & Payroll on the navigation pane.
    2. In the Tasks pane, right-click the Employees icon and select Modify Employee from the menu.
    3. Select an employee from the list and click OK.
    4. Click the Taxes tab.
  2. Enter the following information:
    • Personal Tax Credits. In the Personal Tax Credits area, enter the employee's federal and provincial claims and deductions.
      Where to enter Personal Tax Credits for an employee
       Federal Provincial
      Basic Personal AmountEnter the basic personal amount (line 1) printed on the federal TD-1 form.Enter the basic personal amount (line 1) printed on the provincial or territorial TD-1 form.
      Other Indexed Amounts
      		Add the amounts (if any) on lines 2, 3, 6, 7, 8, 9, and 10 from the federal TD-1 form and enter the total in this field. Do not include line 1 in the total.

      Provincial and territorial governments set their own indexation requirements. Review the indexation requirements set by each province or territory before entering the employee's claim. Do not include the line 1 amount in this total.

      Note: Indexing means that certain personal tax credit amounts go up based on changes to the Consumer Price Index.

      Non-Indexed AmountsAdd the amounts (if any) on lines 4, 5, 11, and 12 from the federal TD-1 form and enter the total in this field.Add the amounts (if any) that are not subjected to indexing, and enter the total in this field.
    • Calculate Tax. Turn on or off income tax deduction if an employee's total income is less than the total claim amount on the TD-1 form.
    • Additional Federal Tax. Enter additional federal income tax that an employee asks you to deduct from their pay. This amount will be deducted from each paycheque.
    • Additional Quebec Tax. Enter additional Quebec income tax that an employee, who lives and works in Quebec, asks you to deduct from their pay. This amount will be deducted from each paycheque.

      • Note: The employee must complete one of the following forms, available from the Ministère du Revenu du Québec, and submit it to you:

      • TP-1017-V, Request to Have Additional Income Tax Withheld at Source
      • TP-1015.3-V, Source Deductions Return

  3. Calculate EI. If Employment Insurance (EI) premiums should be deducted from the employee's paycheque, select this box. If you, the employer, qualify for a reduced EI rate for this employee, enter the reduced EI Factor Rate.
  4. Calculate CPP/QPP. If Canada/Quebec Pension Plan premiums should be deducted from the employee's paycheque, select this box. Clear the box if the employee is exempt from paying CPP or QPP premiums for reasons other than age. This box calculates both CPP and CPP2 as well as QPP and QPP2, if applicable.
  5. Calculate QPIP. Select this box to deduct Quebec parental insurance plan premiums for a Quebec employee. If an employee pays EI premiums, they should be paying QPIP as well.
  6. Click Save and Close.