Payroll and tax in Canada

In Canada, most payroll and income tax requirements fall under federal jurisdiction. However, provincial and territorial governments also apply their own rules, with Québec having unique payroll tax laws and reporting processes.

As an employer, you are responsible for correctly withholding and remitting statutory deductions, including income tax, the Canada Pension Plan (CPP) or Québec Pension Plan (QPP), Employment Insurance (EI), and the Quebec Parental Insurance Plan (QPIP), as applicable. Understanding these obligations and how they differ across jurisdictions helps your business with compliance.

Federal payroll resources

The following resources may help employers navigate federal payroll and tax requirements:

• Canada Revenue Agency (CRA)
• Government of Canada: How payroll works
• Service Canada: Employer services
• Revenu Québec
• Income Tax
• CRA: Employers’ Guide – Payroll Deductions and Remittances

Pension and employment insurance

• Canada Pension Plan (CPP): Applies in all provinces and territories except Québec. Employers must deduct contributions and remit them to the Canada Revenue Agency (CRA).
• Québec Pension Plan (QPP): Employers in Québec must deduct contributions and remit them to Revenu Québec instead of CPP. 
• Employment Insurance (EI): Provides temporary income support to eligible employees. Employers must deduct EI premiums from employees and remit them with employer contributions. 
• Québec Parental Insurance Plan (QPIP): QPIP provides maternity, paternity, paternal and adoption benefits to eligible employees in Québec. Employers must deduct the employee’s QPIP premium and remit them with employer contributions.
• Record of Employment (ROE): Employers are responsible for issuing an ROE when an employee experiences an interruption in earnings. The ROE is used by Service Canada to determine eligibility for EI benefits.

Provincial payroll resources

In addition to federal obligations, some jurisdictions impose additional payroll-related taxes and requirements, including:

• Ontario employer health tax
• Provincial tax services offices and tax centres
• Revenu Québec

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