Payroll Taxes are withheld at both the Federal and Provincial level. It is the responsibility of the employer to properly calculate these taxes for employees on each pay and remit them to the Canadian government.
TD1 Forms & Tax Credits
Before the beginning of the new year you must request the employee complete the TD1 form for both the Federal and Province of employment. This is also true for any new hire or rehire during the year. These values must be entered into your payroll system as these amounts drive certain tax credits and tax rates for each employee as every employee is unique. The total amounts are usually compared to the claim codes for the payroll system properly calculate taxes.
Taxable benefits can be tricky to determine how it’s taxed and what is taxed. Non-cash vs. cash benefits? It is applicable for EI taxes or not? Do you need to tax the tax (PST, HST)? It is your responsibility to figure this out as the employer. CRA provides a detailed list here to help determine.
TD1 forms and worksheets for Federal and each Province
Taxable Benefits: Do you deduct CPP, EI? Does it include the GST/HST value? Find them here.