Overseas employment tax credit

If you employ a resident of Canada to work outside Canada for more than six consecutive months, the employee may be entitled to an overseas employment tax credit. The six consecutive months of employment can start in the current year or in a previous year. The employment duties performed outside Canada must either be to get a contract for the employer or relate to a contract under which the employer carried on a business outside Canada. For more information, see archived Interpretation Bulletin IT-497R4, Overseas Employment Tax Credit.

How to fill out the T4 slip

Box 14 – Employment income

Report the total amount of remuneration you paid that relates to any employment outside Canada. Do this even if an employee has received a letter of authorization from a tax services office or tax centre that allows you to reduce the amount of income tax you deduct from the employee’s income.

On the slip, show the income that qualifies for the reduction and the number of days the employee worked outside Canada.

In the "Other information" area, enter in one of the boxes code 72 and the income qualifying under section 122.3 of the Income Tax Act. Also enter in one of the boxes code 73 and the number of days the employee worked outside Canada. The number of days should be a three-digit number that you enter at the beginning of the box "Amount."

Forms and publications

• Archived Interpretation Bulletin IT-497R4, Overseas Employment Tax Credit

Date modified:

2015-12-18