Regulation 100

Subsection 100(1)


See Also

Dare Human Resources Corporation v. Ontario (Revenue), 2019 ONCA 549

placement agencies were the workers’ employer

The appellants were placement agencies who supplied temporary workers to the Public Service of Canada and federal agencies. When these clients put out a call for temporary workers, the appellants identified appropriately qualified and willing candidates from their inventory, and negotiated an hourly rate of pay for the placement that exceeded what they paid to the workers.

The appellants’ primary function during the assignment was to provide the payroll on the basis of time sheets signed off by the client, whereas the client managed and directed the workers. However, both could be involved in dealing with performance or discipline issues.

In dismissing the appeal from the decision of Hackland J that the appellants were liable for Ontario employer health tax (a payroll tax imposed on employers who pay remuneration to their employees) on the basis that they were the employers of the workers (who were acknowledged not to be independent contractors), the Court stated (at para. 15) that Hackland J had appropriately taken into account “that the appellants are the only parties with contractual relationships with the workers and that the contractual documentation with the Government of Canada makes it clear that it was the government’s intention that the workers be the employees of the placement agencies,” and also stated (at para. 21):

The appeal judge acknowledged, as is typical in a tripartite arrangement, that the appellants and the Government of Canada each appeared to possess some of the traditional attributes of an employer. He explicitly referenced recruitment, payroll administration, discipline issues, testing, and security clearances. While some factors may have pointed to the Government of Canada as the employer, after an analysis of all of the factors, the trial judge determined that the appellants were the employers. The appeal judge did not … fail to consider any relevant factor.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 153 - Subsection 153(1) - Paragraph 153(1)(a) payor of remuneration was the employer 186

Des Groseillers v. Agence du revenu du Québec, 2019 QCCQ 1430, rev'd 2021 QCCA 906

Opco paid directors’ fees of Pubco parent as agent

All the shares of an operating corporation (“ATBM”) were held by a publicly-listed holding company (“BMTC”). ATBM paid the attendance fees of the outside directors of BMTC and included those amounts in what it reported for Quebec (“FDRCMO”) payroll taxation purposes. BMTC had not opened any source deduction or payroll account for taxation purposes.

In confirming the ARQ assessments of BMTC to add those amounts instead to its payroll, Bourgeois, JCQ stated (at paras. 120-121, TaxInterpretations translation):

[I]t appears incontestable that ATBM had the mandate to pay the source deductions for the account of BMTC. …

[P]ermitting the consolidation, within a single corporation, of tax charges related to remuneration of employees or directors of different corporations would risk … the inducing of an erosion of FDRCMO assessments which usually would be separately assumed by the corporations.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 7 - Subsection 7(1) - Paragraph 7(1)(b) no s. 7(1)(b) application to option cash-out amount assignments 514
Tax Topics - Income Tax Act - Section 7 - Subsection 7(3) - Paragraph 7(3)(a) no s. 69(1)(b) application to s. 7(1)(b) dispositions 393

Administrative Policy

20 February 2008 External T.I. 2007-0232621E5 F - Pourboires versés électroniquement

“employer” can include agent that handles the payment of tips

Regarding a situation where one corporation is the employer of waiters and a related corporation handles the electronic payment of the tips to those employees, CRA stated:

In the light of the facts submitted, the responsibility for paying the tips of each employee into their bank account by electronic transfer suggests that the tips were under the control of one of the two corporations. Thus, the employer or the person paying the tips on its behalf has an obligation to make the appropriate deductions at source.


See Also

Coopers & Lybrand Limitéé v. MNR, 94 D.T.C 1626, [1994] 2 CTC 2244 (TCC)

The appellant took possession on November 4, 1981 of the business of a debtor and, with the banks' authorization, paid the net amount of the employees' back wages pursuant to the usual payroll procedures of the debtor (including the preparation of payroll slips showing the deduction of source deductions). Before receiving the payments, the employees were required to assign all rights to their wages to the appellant.

Tremblay TCJ. found that the assignment did not change the nature of the claim that was paid (i.e., wages) and that even if the nature of the claim changed as a result of the assignment, the amounts received by the employees were "in respect of" salary or wages.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 153 - Subsection 153(1.3) 175

Administrative Policy

24 September 2015 External T.I. 2013-0495611E5 - Withholding on incentive payments to non-residents

no withholding on payment to non-resident employee of 3rd party

A Canadian resident manufacturing corporation ("Canco") pays the non-resident employees ("Dealer Employees"), of non-resident dealers selling its products outside Canada, incentive payments ("Incentive Payments") for each warranty registered on Canco's products. Are the Incentive Payments subject to withholding or to a reporting obligation? After referring to the commission branch of the "remuneration" definition, CRA stated:

Whether Canco and the Dealer Employees have an employer/employee relationship, as developed through Canadian common law, is a question of fact. Provided no such relationship exists, the Incentive Payment would not meet this definition and Regulations 102 and 103 should not apply to require Canco to deduct or withhold any amount from the Incentive Payments… .

Notwithstanding that no withholding tax is required… where there is no employer/employee relationship…Canco would still be required to file an information return (T4A…)… .

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(iii) no withholding on payments based on sales warranties sold by dealers 126
Tax Topics - Income Tax Regulations - Regulation 200 - Subsection 200(1) T4A reporting of payments to non-resident employee of 3rd party 84

13 June 2003 TI

Where a lawyer, who is a member of a professional partnership, is a director of a corporation, the director's fees paid to him will not be subject to source deductions if it is the partnership that has earned those amounts.

7 December 2009 External T.I. 2009-0344691E5 F - Versement d'un droit salarial

withholding on salary catch-up payment in the usual manner

Teachers accrue a salary entitlement over the school year but are paid on an even instalment basis over the full 12 months that include their months not teaching. However, when a teacher goes on maternity leave, she receives a catch-up payment to bring her pay up to the total accrued entitlement to that point. CRA stated that such catch-up payment “represents payment of salary or wages that must be deducted at source in the usual manner.”

8 October 1996 T.I. 962701 (C.T.O. "Loss of Employment, Mental Distress, Damages")

Reimbursements of the legal fees incurred in a wrongful dismissal action are not "remuneration".

24 May 2007 External T.I. 2006-0209081E5 F - Withholding Source Deductions - Trustee Fees

fees received by REIT trustees including per-meeting fees were salary and wages subject to source deductions and T4 reporting

The trustees of a REIT (who in that regard were not acting in the course of a business) received fees from the REIT equaling $20,000 per year, plus $1,000 for each meeting attended in person (or $500 if attended by telephone) plus reimbursements for out-of-pocket expenses incurred in the performance of their duties as trustees. CRA concluded that such fees were from an “office,” and that:

[T]he REIT would therefore be required to withhold tax from the fees paid to its Trustees by virtue of paragraph 153(1)(a) and to issue a T4 information slip to each of them in that regard.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Office fees if trustees of REIT based partly on the number of meetings they attended were from an office 136

18 June 1993 T.I. (Tax Window, No. 32, p. 10, ¶2603)

A plan under which sick leave benefits to which an employee is entitled under the terms of an employment contract or collective agreement are paid to her through an employee benefit trust will be considered to give rise to salary or wages and, therefore, will be subject to the usual deductions for UIC and CPP.

4 February 1993 Memorandum (Tax Window, No. 29, p.18, ¶2425)

Payments made by an employer to an employee profit sharing plan are subject to source deductions.

Ladd, "Verification and Collection Issues", 83 C.R., p. 771

Although RC's position is that "payment" is to be read in a broader context than a mere exchange of cash, RC recognizes that it would be unreasonable to insist upon deductions from non-cash benefits when there is not an accompanying cash payment. Therefore, RC will waive withholding where there is no accompanying cash payment or when deducting would cause undue hardship.

Paragraph (h)

Administrative Policy

12 February 2007 External T.I. 2006-0205981E5 F - DAS programme de soutien financier pour handicapés

assistance paid to those with disabilities to assisting taking up employment was “remuneration” subject to source deductions

A not-for-profit organization ("NPO") receives funds from the federal Opportunities Fund for Persons with Disabilities program of Human Resources and Skills Development Canada in order to provide funding to individuals with disabilities to assist them to enter or re-enter the labour market. CRA confirmed that the services provided by the NPO came within ITA s. 56(1)(r), so that they were “remuneration” under para. (h) of the definition thereof in Reg. 100(1) so that the payments were subject to source deductions and subject to an obligation to issue a T4A under Reg. 200(2)(c).

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(r) assistance paid to those with disabilities to assisting taking up employment came within s. 56(1)(r) 94

Subsection 100(4)

Administrative Policy

9 July 2020 Internal T.I. 2020-0854701I7 - Withholdings from CERB/CSB payments

there is a deemed establishment of a deemed employer of a deemed employee where s. 56(1)(r) government assistance is paid

The Directorate found that the source deduction requirements (including graduated rates) under Reg. 102(1) applied to Canada emergency response benefit (CERB) and Canada emergency student benefit (CESB) payments. In this regard, it noted that the payments are governmental financial assistance under s. 56(1)(r), so that they are deemed “remuneration,” and the payer and payees are deemed to be “employer” and “employee,” under the Reg. 100(1) definitions. The Directorate went on to state:

Since the payment recipients would not be reporting for work, in our view, subsection 100(4) provides an appropriate deeming provision in that regard. Where the employee is not required to report for work at any of the employer's establishments, subsection 100(4) of the Regulations contains a number of relevant deeming provisions. For the remunerations other than salary, wages, or commissions, paragraph 100(4)(b) provides that the employee shall be deemed to report for work at the employer's establishment in the province where he or she resides. Paragraph 100(4)(b) further provides that if the employer does not have an establishment in that province, the employer shall be deemed to have an establishment there.

Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 102 - Subsection 102(1) CERB and CESB payments are deemed remuneration for source deduction purposes 125
Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(r) CERB and CESB payments are government assistance 58

21 July 1992 Memorandum 921453 (January - February 1993 Access Letter, p. 34, ¶C144-197)

An establishment of an employer would have many of the same characteristics as that of a permanent establishment, as defined in Regulation 400(2).

14 May 1991 T.I. (Tax Window, No. 3, p. 10, ¶1237)

Where a U.S. corporation sends its employees to a Canadian subsidiary for work assignments, and the employees report for work at the Canadian subsidiary but remain employees of the U.S. corporation, Regulation 100(4) will deem the employees to report for work at an establishment of the U.S. corporation outside Canada.

Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 5 64