T4008-YT-7-20(E)

This guide uses plain language to explain the most common tax situations. If you need more help, contact your tax services office.

Note
You must look up amount in two tax deductions tables – a federal table and a provincial table.

This guide is a supplement to the guide T4032, Payroll Deductions Tables. If you need more information, see the Payroll Deductions Tables for your province or territory.

What’s new as of July 1, 2020

Payroll Deductions Tables

You can download Guides T4008, Payroll Deductions Supplementary Tables, and T4032, Payroll Deductions Tables, from our website at canada.ca/payroll. You can also choose to print only the pages or information that you need.

Payroll Deductions Online Calculator

For your 2020 payroll deductions, you can use our Payroll Deductions Online Calculator (PDOC). This online calculator makes it easier to calculate payroll deductions. PDOC is available at canada.ca/pdoc.

Let us notify you

We provide a digital service that can notify you immediately, free of charge, of any changes for payroll deductions.
To subscribe, visit our webpage at canada.ca/cra-email-lists and enter your business’s email address for each mailing list that you want to join.

Special Notice

Payroll Deductions Tables (T4032)

Effective with the January 1, 2017 edition, the Canada Revenue Agency is no longer publishing the paper and CD versions of the Guide T4032, Payroll Deduction Tables. The digital versions of the guides continue to be available on our website at canada.ca/payroll.

General information

This guide is a supplement to the Guide T4032, Payroll Deductions Tables. See the Payroll Deductions Tables for your province or territory if you need more information about:

• what’s new for July 1, 2020
• how to calculate tax deductions when you cannot use the tables
• how to deduct income tax, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums and
• the payroll deductions required for pay periods other than those included in this guide

For information on deducting, remitting, and reporting payroll deductions, go to the following employers’ guides:

• T4001, Employers’ Guide – Payroll Deductions and Remittances
• T4130, Employers’ Guide – Taxable Benefits and Allowances
• RC4110, Employee or Self-employed?
• RC4120, Employers’ Guide – Filing the T4 Slip and Summary
• RC4157, Deducting Income Tax on Pension and Other Income, and Filing the T4A Slip and Summary

You can download and print a copy of the above noted guides. Our guides are available from our webpage at canada.ca/payroll . You can also use the Payroll Deductions Online Calculator free of charge.

Note

You may also want to refer to the 2019 edition of this guide until the end of 2020 to resolve any pensionable and insurable earnings review (PIER) deficiencies that may arise after we have processed your 2019 T4 return.

Claim codes

You may have to ask your employees or your pensioners to complete a federal and a provincial personal tax credits return using a federal Form TD1 and a provincial Form TD1.
The total personal amount an employee claims on a TD1 form will determine which claim code you use. The claim amounts that correspond to the federal claim codes are not the same as the claim amounts that correspond to the provincial claim codes. Go to Chart 1 and Chart 2.

The claim codes and corresponding amounts do not appear on either the federal or the provincial TD1 form.

Explanation of claim codes

Claim code 0

This code represents no claim amount. If the federal claim code is “0” because the employee is a non-resident, the provincial claim code must also be “0.” This code may also be used if the employee indicated they have more than one employer or payer at the same time and have entered “0” on the front page of Form TD1 for 2020.

Claim codes 1 to 10

You match the total claim amount reported on your employee’s or pensioner’s TD1 forms with the appropriate claim codes. Then, you look up the tax for the employee’s pay under the claim code in the federal and provincial tax tables for the pay period.

Indexing of federal claim codes amounts

The credits that apply to each federal and provincial claim code have been automatically changed in the tax tables by the indexing factor for the current year. If your employee did not complete the federal and provincial TD1 forms for 2020, you continue to deduct income tax using the same claim code that you used last year.

Chart 1 – 2020 Federal claim codes

Note:
Due to the December 9, 2019 announcement, legislative changes to the Federal Basic Personal Amount, the Claim Code Chart cannot be produced with ranges, as was previously done. Accordingly, the Federal Claim Code Chart will not be produced with this edition

Chart 2 – 2020 Yukon claim codes

Employment income from all sources

On the federal and territorial TD1 forms, under the heading “Income from other employers or payers,” employees can indicate that their expected employment income from all sources will be less than their total claim amount. If an employee states that his or her total expected income will be less than the “Total claim amount” of the TD1 forms, do not deduct any federal or territorial tax.

However, as an employer, if you know that this statement is false, you must deduct federal and territorial tax from the salary. Deduct tax according to the claim code that applies to the “Total claim amount” of the TD1 forms.

It is a serious offence to knowingly accept a Form TD1 that contains false or deceptive statements. If you are not sure a statement is true, contact your tax services office for advice.