This decision tool helps determine the Province of Employment (POE) and the required payroll tax forms and deductions for Canadian-resident employees, including remote work scenarios.
Answer the following questions to determine the correct province of employment and applicable tax requirements and considerations.
Non-Resident Employee
This tool is intended solely for employers with Canadian resident employees. The tax obligations of non-resident employees shall be determined in accordance with applicable tax treaties and the relevant facts and circumstances of each individual case.
A full-time remote work arrangement exists between the employer and the employee when the agreement is either temporary or permanent. The employer directs or allows employees to perform their employment duties full-time remotely. The employment duties are to be performed at one or more locations that are not establishments of the employer.
Where a remote work arrangement is in effect, based on the applicable indicators, can the employee reasonably be considered attached to an establishment of the employer?
Primary Indicator
If no remote work agreement existed, would the employee physically come to work at the employer's establishment?
Secondary Indicators
To determine the appropriate employer establishment, consider where the employee would ordinarily report for work if the remote work arrangement did not exist. Relevant factors include:
The establishment where the employee would attend in-person meetings (through any method of communication)
The establishment where the employee would receive work-related materials, assistance, or equipment
The establishment where the employee would come in person to receive instructions from the employer (through any method of communication)
The establishment that would be responsible for or supervise the employee as indicated in their contract
The establishment where the employee would report, based on the nature of the duties performed
Employee physically reports to a single establishment
The Province of Employment (POE) is where the employee physically reports for work at the employer's permanent or deemed establishment.
Employee physically reports for work at multiple establishments
The Province of Employment (POE) is the location of the employer's establishment where the employee spent the most time. If the employee spent equal time at multiple establishments, use the establishment where the employee worked last.
If equal time was spent in Quebec and another province/territory, RQ would consider the entire pay period as having been worked in Quebec, even if Quebec was not the last location.
Does not report to an establishment
The Province of Employment (POE) is the province of the employer's establishment from which the employee is paid, or where revenue and expenses are incurred for T2 (Business/Corporate Income Tax Return) reporting.
Employer has no establishment in Canada
Employment is considered in Canada beyond the limits of any province or territory.
Tax Requirements:
Tax Form: TD1
Source Deductions: CPP, EI, Federal Income Tax
Workers' Compensation: Coverage requirements vary by province or territory and generally depend on where the employee physically performs their employment duties. Employer registration may be required, optional, or exempt.
Employment Standards Act: Province/territory where the employee physically performs employment duties. Employees who are covered under federal jurisdiction fall under the Canada Labour Code Part III. Employees who are part of a union are covered under the terms of their collective agreement.
Tax slip: T4
Province of Employment:
Tax Requirements:
Tax Forms: TD1 and TD1 ()
Source Deductions: CPP, EI, Federal and Provincial Income Tax
Workers' Compensation: Coverage requirements vary by province or territory and generally depend on where the employee physically performs their employment duties. Employer registration may be required, optional, or exempt.
Employment Standards Act: Province/territory where the employee physically performs employment duties. Employees who are covered under federal jurisdiction fall under the Canada Labour Code Part III. Employees who are part of a union are covered under the terms of their collective agreement.
Tax slip: T4
Payroll Tax: Employees who work in either the Northwest Territories and/or Nunavut may be subject to a 2% Payroll Tax, which the employer is responsible for deducting from their pay. For further details, refer to the Guide Province of Employment Payroll Best Practices.
Province of Employment: Quebec (QC)
Tax Requirements:
Tax Forms: TD1 and TP-1015.3
Source Deductions: QPP, EI, QPIP, Federal and Quebec Income Tax
Workers' Compensation: Coverage requirements vary by province or territory and generally depend on where the employee physically performs their employment duties. Employer registration may be required, optional, or exempt.
Employment Standards Act: Province/territory where the employee physically performs employment duties. Employees who are covered under federal jurisdiction fall under the Canada Labour Code Part III. Employees who are part of a union are covered under the terms of their collective agreement.
Tax slip: T4 and RL-1
Provincial Health Tax: Quebec Health Service Fund (QHSF)
Payroll Tax: Employees who work in either the Northwest Territories and/or Nunavut may be subject to a 2% Payroll Tax, which the employer is responsible for deducting from their pay. For further details, refer to the Guide Province of Employment Payroll Best Practices.
Please send an email to Infoline@payroll.ca including your member number if you require further payroll compliance assistance with determining the province of employment.