As we have begun 2014, there are some very important steps that every employee should consider to ensure a smooth payment process. Your employers will have updated their payroll system and payroll software, but you must also be responsible for your part of the payroll system. Please take note of the following:
TD1’s- Personal Tax Credit Return
This tax from is used to calculate the amount of income tax and other payroll deductions that will be deducted from your pay or pension income throughout the year and there are both provincial and federal forms.
Every employee must fill out their TD1’s, especially those who are claiming more than the personal exemption that is stipulated both federally and provincially depending on where you are located. This form also can help determine what credits you are eligible for as it lists each category where credits can be applied. If the TD1 form is not submitted to the employer, the deductions will be based on the basic personal amount only.
Another important thing to remember is that there is the option in your company’s payroll system to increase the amount of tax taken off in payroll deductions each pay to reduce any tax owing at the end of the year.
These factors mentioned above are the reasons why it is imperative that employees send this information to the employer as soon as possible in the New Year. At the start of every year the payroll software updates the basic exemption to match the new figures and can erase any additions that an employee may have provided in the previous year. Furthermore, if a situation arises (birth of a child), an employee has no more than seven days to get this information to the employer so they can update the payroll system and payroll software.
If you have not done so, please ensure that this step is completed. All forms can be found at this address: https://www.canada.ca/en/revenue-agency/services/forms-publications/td1-personal-tax-credits-returns.html. Please select the federal from that the provincial form that applies. There are different forms for Alberta payroll, Ontario payroll deductions, and other provinces.
If an employee incurs expenses to earn commission income can choose to complete the TD1X form, Statement of Commission Income and Expenses for Payroll Tax Deductions. This allows for an employee’s tax payroll deductions to be adjusted as the commission expenses are taken into account.
Change of Address
If you have moved throughout 2013 and are currently at a new address, if you have not already done so, please ensure that you have provided your new address to either your employer or payroll system contact. T4 preparation is underway and we need to have the correct address on file to ensure that you receive the T4. A failure to do so results in lost time as we must wait for the T4 to be retuned, get the new address and send again.
Stephanie Nadeau / Bilingual Payroll Administrator / PEO Canada