T4032-ON(E) Rev. 24 This guide uses plain language to explain the most common tax situations. If you need more help, contact 1-800-959-5525 .
The major changes made to this guide since the last edition are outlined.
This guide reflects some income tax changes recently announced which, if enacted as proposed, would be effective January 1, 2024. At the time of publishing, some of these proposed changes were not law. We recommend that you use the new payroll deductions tables in this guide for withholding starting with the first payroll in January 2024.
As per Canada Pension Plan Regulations Subsection 5.1 (1), for the year 2024 and each subsequent year, pensionable earnings between the Year’s Maximum Pensionable Earnings (YMPE) and a second earnings ceiling, referred to as the Year’s Additional Maximum Pensionable Earnings (YAMPE), are subject to CPP2 contributions. Therefore, in order to accurately calculate CPP2 contributions, users are required to keep track of the year-to-date pensionable income during the year.
A new table has been added to help users calculate the CPP2 contributions (Section B(ii)). Generally, users will be consulting the Section B(i) and Section B(ii) tables as follows:
Pensionable income | Contributions | Section |
---|---|---|
Up to $68,500 | CPP contributions | Section B(i) |
$68,500 to $73,200 | CPP2 contributions | Section B(ii) |
Above $73,200 | - | - |
See the “How to use the tables in this guide” section for instructions.
Starting January 1, 2024, a new administrative policy on province of employment will come into effect. Where a full-time remote work agreement was made, an employee will also be considered to report to your establishment where they are reasonably considered "attached to an establishment of the employer". For more information, visit our webpage on Determine the province of employment (POE).
You can download guides T4008, Payroll Deductions Supplementary Tables, and T4032, Payroll Deductions Tables, from our webpage at canada.ca/payroll. You can also choose to print only the pages or information that you need.
For your 2024 payroll deductions, we strongly recommend using our PDOC. The online calculator makes it faster and easier to calculate payroll deductions. The calculator also uses exact salary figures and provides more accurate calculations. It calculates payroll deductions for the most common pay periods, as well as the applicable province (except Quebec) or territory.
The calculator includes an option to help you make sure that enough Canada Pension Plan contributions and employment insurance premiums have been withheld for full-year employees in 2023.
The salary and the commission stream on PDOC will be updated to reflect the changes related to the CPP2 contributions.
PDOC is available at canada.ca/pdoc.
We provide a digital service that can notify you immediately, free of charge, of any changes for payroll deductions.
To subscribe, visit our webpage at canada.ca/cra-email-lists and enter your business's email address for each mailing list that you want to join.
The Canada Revenue Agency is no longer publishing the paper and CD versions of the Guide T4032, Payroll Deductions Tables. The digital versions of the guide continue to be available on our website at canada.ca/payroll.
This guide is intended for the employer and the payer. It contains tables for federal and provincial tax deductions, CPP contributions and EI premiums. It will help you determine the payroll deductions for your employees or pensioners.
The provincial and federal tables are designed to accurately calculate the deductions provided by the CPP additional contributions in most situations. However, for the following situations, we recommend using the PDOC for more accurate calculations:
If the tables are used in these situations, it may result in over or under deduction of federal and provincial taxes during the year.
For more information on deducting, remitting, and reporting payroll deductions, see the following employers' guides:
These guides are available on our website at canada.ca/taxes.
Refer to the 2023 edition of Payroll Deductions Tables to resolve any pensionable and insurable earnings review (PIER) deficiencies that we identify in processing your 2023 T4 return.
This guide contains the most common pay periods: weekly, biweekly (every two weeks), semi-monthly, and monthly. If you have unusual pay periods, such as daily (240 working days), or 10, 13, or 22 pay periods a year, see the Guide T4008, Payroll Deductions Supplementary Tables, or the PDOC to determine tax deductions.
Before you decide which tax table to use, you have to determine your employee's province or territory of employment. This depends on whether you require the employee to report for work at your place of business.
If the employee reports for work at your place of business, the province or territory of employment is considered to be the province or territory where your business is located.
To withhold payroll deductions, use the tax table for that province or territory of employment.
If you do not require the employee to report for work at your place of business, the province or territory of employment is the province or territory in which your business is located and from which you pay your employee's salary.
For more information and examples, see Chapter 1, "General Information" in Guide T4001 Employers' Guide – Payroll Deductions and Remittances.
For 2024, the federal income thresholds, the personal amounts and the Canada employment amount have been changed based on changes in the consumer price index.
The federal indexing factor for January 1, 2024 is 4.7%. The tax credits corresponding to the claim codes in the tables have been indexed accordingly. Employees will automatically receive the indexing increase, whether or not they file Form TD1, 2024 Personal Tax Credits Return.
For 2024, the federal tax rates and income thresholds are:
Annual taxable income ($) from | Annual taxable income ($) to | Federal tax rate, R | Constant ($), K |
---|---|---|---|
0.00 | 55,867.00 | 0.1500 | 0 |
55,867.01 | 111,733.00 | 0.2050 | 3,073 |
111,733.01 | 173,205.00 | 0.2600 | 9,218 |
173,205.01 | 246,752.00 | 0.2900 | 14,414 |
246,752.01 | and over | 0.3300 | 24,284 |
The non-refundable tax credit for CEA is built into the federal payroll deductions tables. The federal CEA is the lesser of:
The maximum annual non-refundable tax credit is $214.95.
Pension income is not eligible for this credit. If you are paying pension income, use the PDOC to calculate the tax deduction.
Maximum basic personal amount ($) | Minimum basic personal amount ($) |
15,705 | 14,156 |
For 2024, the provincial income thresholds, the personal amounts, and the tax reduction amounts have been indexed. They have been changed based on changes in the consumer price index.
The indexing factor for January 1, 2024, is 4.5%. The tax credits corresponding to the claim codes in the tables have been indexed accordingly. Employees will automatically receive the indexing increase, whether or not they file Form TD1ON, 2024 Ontario Personal Tax Credits Return.
For 2024, the Ontario tax rates and income thresholds are:
Annual taxable income ($) from | Annual taxable income ($) to | Provincial tax rate, V | Constant ($), KP |
---|---|---|---|
0.00 | 51,446.00 | 0.0505 | 0 |
51,446.01 | 102,894.00 | 0.0915 | 2,109 |
102,894.01 | 150,000.00 | 0.1116 | 4,177 |
150,000.01 | 220,000.00 | 0.1216 | 5,677 |
220,000.01 | and over | 0.1316 | 7,877 |
For 2024, the Ontario health premium is:
For 2024, the Ontario’s surtax is:
For 2024, Ontario's tax reduction amounts are:
Basic personal amount. $286
Amount for each dependant under age 18. $529
Amount for each dependant with a disability that the
employee or pensioner has claimed on Form TD1ON. $529
The reduction is equal to twice the individual's personal amounts minus the provincial tax payable before reduction. The reduction cannot be more than the provincial tax payable before reduction. The reduction is nil when the provincial tax payable before reduction is more than twice the personal amounts. Because of the way the reduction for dependants with disabilities is determined, we include only the basic personal amount in the provincial tax tables.
For 2024, the Ontario non‑refundable personal tax credits are:
Basic personal amount ($) | Maximum spouse or common-law partner amount ($) | Maximum amount for an eligible dependant ($) |
---|---|---|
12,399 | 11,581 | 11,581 |
For more detailed information on the personal amounts, see Form TD1ON, 2024 Ontario Personal Tax Credits Return.
CPP | Year’s Maximum Pensionable Earnings (YMPE) | Basic Exemption | Year’s Maximum Contributory Earnings (YMCE) | Employee and Employer Contribution Rate | Maximum Employee and Employer Contribution |
---|---|---|---|---|---|
CPP base contribution | 68,500.00 | 3,500.00 | 65,000.00 | 0.0495 | 3,217.50 |
First additional CPP contribution | 68,500.00 | 3,500.00 | 65,000.00 | 0.0100 | 650.00 |
CPP contribution Footnote 1 | 68,500.00 | 3,500.00 | 65,000.00 | 0.0595 | 3,867.50 |
Year’s Maximum Pensionable Earnings (YMPE) | Year’s Additional Maximum Pensionable Earnings (YAMPE) | Pensionable earnings subject to Second Additional Contribution | Second Additional Employee and Employer Contribution Rate | Maximum Second Additional Employee and Employer Contribution | |
---|---|---|---|---|---|
Second additional CPP contribution | 68,500.00 | 73,200.00 | 4,700.00 | 0.0400 | 188.00 |
You stop deducting CPP and CPP2 (if applicable) when the employee reaches their maximum annual contribution for the year. For more information, see Chapter 2, “Canada Pension Plan contributions” in Guide T4001 Employers’ Guide – Payroll Deductions and Remittances.
As an employer, you must remit the employer’s and employee’s share of CPP and CPP2 contributions.
EI | Maximum Annual Insurable Earnings | Employee Contribution Rate | Employer Contribution Rate | Maximum Annual Employee Premium | Maximum Annual Employer Premium |
---|---|---|---|---|---|
Canada except QC | 63,200.00 | 0.0166 | 0.02324 | 1,049.12 | 1,468.77 |
You stop deducting EI when the employee reaches their maximum annual premium. For more information, see Chapter 3, "Employment Insurance premiums" in Guide T4001 Employers’ Guide – Payroll Deductions and Remittances.
As an employer, you must remit the employer’s and employee’s share of EI premiums.
You may have to ask your employees or your pensioners to complete a federal and a provincial personal tax credits return using a federal Form TD1 and a provincial Form TD1.
For more information, see Chapter 5, "Deducting income tax" in Guide T4001 Employers’ Guide – Payroll Deductions and Remittances.
The total personal amount an employee claims on a TD1 form will determine which claim code you use. The claim amounts that correspond to the federal claim codes are not the same as the claim amounts that correspond to the provincial claim codes. See Chart 3 and Chart 4.
This code represents no claim amount. If the federal claim code is "0" because the employee is a non-resident, the provincial claim code must also be "0." This code may also be used if the employee indicated they have more than one employee or payer at the same time and have entered "0" on the front page of Form TD1 for 2024.
The claim code amounts do not appear on either the federal or the provincial TD1 form.
You match the "Total claim amount" reported on your employee's or pensioner's TD1 forms with the appropriate claim codes. Then, you look up the tax for the employee's pay under the claim code in the federal and provincial tax tables for the pay period.
The credits that apply to each federal and provincial claim code have been automatically increased in the tax tables by the indexing factor for the current year. If your employee did not complete the federal and provincial TD1 forms for 2024, you continue to deduct income tax using the same claim code that you used last year.
If your employees want you to adjust their tax deductions to allow for commission expenses, they have to complete Form TD1X, Statement of Commission Income and Expenses for Payroll Tax Deductions.
You deduct tax from your employees' commission pay using the "Total claim amount" on their TD1 forms in the following situations:
Use the tables in this guide to determine the CPP contributions, EI premiums, federal tax, and provincial tax that you will deduct from your employees' remuneration.
Section B is now split into two tables: Section B(i) – CPP contributions table and Section B(ii) – Second additional CPP contributions table. Section B(ii) provides the CPP2 contributions that you are required to withhold from your employee’s pay. CPP2 contributions are required for pensionable earnings between the YMPE ( $68,500 ) and the YAMPE ( $73,200 ).
Use the following steps to determine the CPP contributions and if applicable, CPP2 contributions.
Step 1. Use Section B(i) to determine CPP contributions. If the maximum CPP contribution of $3,867.50 is reached, proceed to Step 2.
In the pay period where maximum CPP contribution is reached, you may be required to use both Section B(i) and Section B(ii).
Step 2. Once the maximum CPP contribution is reached, use the following formula to determine the “Pay” range for Section B(ii) to determine the first CPP2 contribution:
Pay subject to CPP2 contributions = PIYTD + PI – (YMPE × (PM/12))
If the result is positive, proceed to step 3, otherwise repeat step 2 in the subsequent pay period.
PIYTD = Year-to-date pensionable income. This does not include pensionable income for the current pay period.
PI = Pensionable income for the current pay period.
YMPE = Year’s maximum pensionable earnings.
PM = Number of months during which CPP and/or QPP contributions are required to be deducted. Refer to T4001 Employers’ Guide – Payroll Deductions and Remittances for more details.
Step 3. Use Section B(ii) to determine the remaining CPP2 contributions, until the maximum CPP2 contribution is reached. The maximum CPP2 contribution for 2024 is $188.00 . For the last payment made in the year, proceed to Step 4 if the annual pensionable earnings is between YMPE and YAMPE.
Step 4. Section B(ii) uses $0.05 increments for the CPP2 contributions. As a result, for employees with an annual pensionable earnings between YMPE and YAMPE, it may be required to calculate the CPP2 contributions for the last payment in the year. This is to avoid CPP2 under or over-contributions.
To calculate the CPP2 contributions for the last pay period in the year:
Calculate the employee's annual CPP contribution:
(Annual PI - YMPE) × 4%
Where
Annual PI is the employee's annual pensionable earnings
YMPE is the Year's Maximum Pensionable Earnings
Calculate the remaining contribution for the year:
Annual CPP contribution - Year-to-date CPP contributions
An employee is earning $3,000.00 per pay period. There are 26 pay periods in the year since this employee is getting paid biweekly. The employee’s maximum CPP and CPP2 contributions are $3,867.50 and $188.00 respectively.
Pay period | Section B(i) | Pay subject to CPP contributions | Section B(ii) | Pay subject to CPP2 contributions |
1-22 | $3,000.00 | |||
23 | Until maximum is reached | $500.00 Footnote 2 | ||
24 | $3,000.00 | |||
25 | Until maximum is reached | |||
26 |
The annual basic exemption is built into the CPP tables.
If you are using the income tax tables in this guide to determine your employees' and pensioners' total tax deductions, you have to look up the amounts in the federal tax table and the provincial tax table.
To determine the total tax you deduct for the pay period, you must add the federal and provincial tax amounts.
Even if the period of employment for which you pay a salary is less than a full pay period, you must continue to use the tax deductions table that corresponds to your regular pay period.
You are an employer in Ontario. Sara, your employee, earns $615 a week in 2024. She has a federal claim code 1 and a provincial claim code 1.
To determine Sara’s federal tax deductions, you look at the weekly federal tax deductions table and find the range for her weekly salary, which is 613-617. The federal tax deductions for $615 weekly under claim code 1 is $36.40.
To determine Sara’s provincial tax deductions, you use the weekly provincial tax deductions table. In the Ontario tax deductions table, the provincial tax deduction for $615 weekly under claim code 1 is $22.65.
Sara’s total tax deduction is $59.05 ($36.40 + $22.65). This amount of taxes will be included in your remittance to us.
We have built the tax credits and tax deductions for CPP contributions and EI premiums into the federal and provincial tax deductions tables in this guide. However, certain types of income, such as pension income, are not subject to CPP contributions and EI premiums. As a result, you will have to adjust the amount of federal and provincial income tax you are deducting.
To determine the amount of tax to deduct from income not subject to CPP contributions or EI premiums, use the Payroll Deductions Online Calculator, available at canada.ca/pdoc. On the "Salary calculation" and/or on the "Commission calculation" screen, go to Step 3 and select the "CPP exempt" and/or "EI exempt" option before clicking on the "Calculate" button.
You can use the following step-by-step calculations to calculate the tax deductions for your employee or pensioner.
The example shows you how to determine the amount of tax to deduct from all income.
However, if you design your own payroll program or spreadsheets to calculate tax deductions, do not use either of these calculations. Instead, see Guide T4127, Payroll Deductions Formulas.
This example applies to a person who earns $1,200 weekly and contributes $80 to a registered retirement savings plan (RRSP). This person claims the basic personal amount. The CPP contribution is $67.40 and the EI premiums are $19.92 for this pay period.
CPP contributions = 0.0595 × ( $1,200 – ($3,500/52)) = $67.40
EI premiums = 0.0166 × $1,200 = $19.92
Description | Sub-amounts | Amounts |
---|---|---|
(27) Total federal and provincial tax deductions for the year (line 13 plus line 26). If the result is negative, substitute $0. | $8,522.35 | |
(28) Tax deduction for the pay period: Divide the amount on line 27 by the number of pay periods in the year (52). | $163.89 |
This example applies to a person who earns $1,600.00 weekly and claims the basic personal amount. The maximum CPP contribution of $3,867.00 and the maximum EI premiums of $1,049.12 have been reached In addition, this person has started contributing to CPP2 and has contributed $140.00 year-to-date. The year-to-date pensionable income is $72,000 . The CPP2 contribution for this pay period is:
CPP2 contributions - The lesser of:
(i) (PIYTD + PI – (YMPE × (PM/12))) × 0.04 = ( $72,000 + $1,600 – ( $68,500 × (12/12))) × 0.04 = $204.00
(ii) ($ 188.00 × (PM/12)) – $140.00 = $48.00
Description | Sub-amounts | Amounts |
---|---|---|
(27) Total federal and provincial tax deductions for the year (line 13 plus line 26). If the result is negative, substitute $0. | $15,444.44 | |
(28) Tax deduction for the pay period: Divide the amount on line 27 by the number of pay periods in the year (52). | $297.01 |
CPP base and first additional contributions are included in the CPP contributions.
= PIYTD + PI – (YMPE × (PM/12))
= $66,000.00 + $3,000.00 – $68,500.00
= $500.00