Individuals may be elected or appointed to various positions. Some examples of elected or appointed officials include mayors, municipal councillors, school commissioners, chiefs of Indian bands, band councillors, executors, liquidators, or administrators of estates, members of a board of referee at the Commission of Canada Employment Insurance, corporation directors, or any other position when a person is elected or appointed to that office. These individuals are said to be in tenure of office. If you paid stipends, fees or remuneration to these individuals you have to deduct the following amounts:

• Canada Pension Plan (CPP) contributions, except for chiefs of Indian bands unless there is an election (Form CPT124) in place to pay CPP
• income tax

Generally, there are no employment insurance (EI) premiums deducted from these amounts. For more information, see EI premiums.

CPP contributions

Deduct CPP contributions from the following amounts:

• honorariums from employment or office
• a share of profit that an employer paid
• incentive payments
• directors’ fees, management fees, fees paid to board or committee members, and executor’s, liquidator’s, or administrator’s fees earned to administer an estate (as long as the executor, liquidator, or administrator does not act in this capacity in the regular course of business)
• stipends, fees or remuneration paid to elected or appointed officials

Do not deduct CPP contributions from the following amounts:

• stipends, fees or remuneration paid to a chief of an Indian band or band councillors, unless an application for coverage under CPP has been completed
• employment income of an individual in tenure of office in a provincial government department or agency if their employment is listed in Schedule IV of the Canada Pension Plan Regulations

EI premiums

Deduct EI premiums from the following amounts:

• employment income of a person holding an office in the private sector where the individual is in a tenure of office in a union or an association of unions
• stipends, fees or remuneration paid to elected or appointed officials who hold an office in any federal department or agency listed in Schedules I, II, III, IV or V of the Financial Administration Act
• the employment income of individuals who hold an office in the provincial government if they are appointed and remunerated under an act governing the public service of a province
• the employment income of individuals who hold an office for a corporation, a commission, or another body that is an agent to Her Majesty in right of a province, even if they are not appointed and remunerated under an act governing the public service of a province

Do not deduct EI premiums from the income you pay to:

• mayors
• municipal councillors
• school commissioners
• chiefs of Indian bands
• band councillors
• executors, liquidators, or administrators of an estate
• corporation directors
• any person elected or appointed to an office in the private sector, other than in a union or association of unions
• ministers
• members of the House of Commons
• members of the Senate
• the Lieutenant Governor
• judges
• magistrates
• members of a board of referees at the Commission of Canada Employment Insurance
• prothonotaries of the Federal Court of Canada
• individuals who hold an office in the provincial government when they are not appointed and remunerated under an act governing the public service of a province

Income tax

Deduct income tax from the following amounts:

• salary, wages, bonuses, taxable stock option benefits or other remuneration
• honorariums, share of profits an employer pays, incentive payments, directors’ fees, management fees, fees paid to board or committee members, and executor’s, liquidator’s, or administrator’s fees earned to administer an estate (as long as the executor, liquidator, or administrator does not act in this capacity in the regular course of business)
• stipends, fees or remuneration paid to elected or appointed officials

For more information about deducting income tax, see Special payments chart or Guide T4001, Employers’ Guide – Payroll Deductions and Remittances.

Related topics

• CPP/EI explained – Tenure of office