CRA revises its tests for determining the location of the employer establishment to which the employee reports in the context of remote work

Regarding the determination of the location of the establishment of the employer for purposes of applying source deductions pursuant to Reg. 102(1), effective January 1, 2024 CRA’s policy will be that an employee will be considered to report for work at an establishment of the employer if:

• Where a “full-time remote work agreement” is in place, the employee can be reasonably considered “attached to an establishment of the employer”; or
• The employee physically reports for work at the establishment, which can include a temporary establishment such as a construction site (but not generally an employee home office) and with there now being no minimum amount of time for this test to be engaged [see previously, 2015-0620821I7].

CRA generally will consider there to be a full-time remote work agreement where the employer directs or allows employees to perform their employment duties full-time (100%) remotely, i.e., not at any employer establishment.

The primary indicator to determine if an employee can reasonably be considered "attached to an establishment of the employer" is whether the employee would physically come to work to carry out duties at that establishment, were it not for the full-time remote work agreement. Furthermore, for employees who physically reported to an establishment of the employer immediately before entering into a full-time remote work agreement, that establishment is considered to be the one to which they would be reasonably considered to be attached, unless the employees' circumstances or the nature of their duties have changed.

CRA also provides a list of secondary indicators as to the "attached to an establishment of the employer" test.

Neal Armstrong. Summary of CRA Webpage, “Determine the province of employment (POE)” 6 October 2023 under Reg. 102(1).