Non residents of Canada working as employees in Canada will be subject to the same tax deductions as Canadian residents. These deductions include federal and provincial income tax, Employment Insurance premiums, and Canada Pension Plan contributions.
Non resident employees should complete form TD1 to determine which "claim code" the employer should use when calculating payroll deductions. If the taxable income earned in Canada by the non-resident employee is 90% or more of his/her world income for the calendar year, the non-resident employee will benefit from the same tax credits as a Canadian resident. If the exemptions are greater than the basic personal amount, then a provincial TD1 form should also be completed.
If the Canadian employment income is less than 90% of his/her world income for the year, there are no exemptions allowed in calculating payroll deductions for the non-resident employee.
Non resident employees may recover some of the taxes paid when filing a Canadian tax return.
If the country of residence has a tax treaty with Canada, all or part of the Canadian income may be exempt from Canadian tax.
Various options are available to non-residents of Canada. We can help you make an informed decision regarding your Canadian taxes.
Your trusted Chartered Accountant provides tax, assurance services and accounting engagements to individual and small business clients located in Calgary and area.