Find out if you need to make payroll deductions

Are you a trustee, an employer, or a payer of other amounts related to employment? If:

• no, payroll will not apply
• yes, you have to follow the payroll requirements

Employers

We generally consider you to be an employer if you:

• pay salaries, wages (including advances), bonuses, vacation pay, or tips to your employees
• provide certain taxable benefits to your employees (for example, an automobile or allowances)

An individual is an employee if the worker and the payer have an employer-employee relationship. This relationship is referred to as employment under a contract of service.

Although a written contract might mean that an individual is self-employed (and therefore working under a contract for services), we cannot consider the individual as self-employed if there is evidence of an employer-employee relationship.

If you or a person working for you is not sure of the worker's employment status, either one of you can request a ruling to determine the status. If you are a business owner, you can use the "Request a CPP/EI ruling" service in My Business Account. You can also use Form CPT1, Request for a Ruling as to the Status of a Worker Under the Canada Pension Plan and/or the Employment Insurance Act and send it to your tax services office.

For more information on employment status, see Guide RC4110, Employee or Self-Employed?.

Forms and publications for employers

• Guide RC4110, Employee or Self-Employed?
• Form CPT1, Request for a Ruling as to the Status of a Worker Under the Canada Pension Plan and/or the Employment Insurance Act

Trustees

A trustee includes a liquidator, a receiver, a receiver-manager, a trustee in bankruptcy, an assignee, an executor, an administrator, a sequestrator, or any other person who performs a function similar to the one a trustee performs.
A trustee :

• authorizes a payment or causes a payment to be made for another person
• administers, manages, distributes, winds up, controls, or otherwise deals with another person's property, business, estate, or income

Payers of other amounts related to employment

A payer of other amounts can be an employer, a trustee, an estate executor, a liquidator, an administrator, or a corporate director who pays other types of income related to an employment. This income can include:

• pension or superannuation
• lump-sum payments
• self-employed commissions
• annuities
• retiring allowances
• patronage allowances
• accumulated income payments (AIPs)
• educational assistance payments (EAPs)
• fees or other amounts for services
• other income such as:
  • research grants
  • payments from a Registered disability savings plan (RDSP)
  • wage-loss replacement plan payments if you were not required to withhold Canada Pension Plan (CPP) contributions and employment insurance (EI) premiums
  • death benefits
  • certain benefits paid to:
    • partnerships
    • shareholders

To see if you should deduct CPP, EI or tax from these payments, see the Special payments chart.

If you determine that you are a payer, you have to fill out the T4A slip, Statement of Pension, Retirement, Annuity, and Other Income, if you made any of the payments listed above and: 

• the total of all payments in the calendar year was more than $500; or
• you deducted tax from any payment.

There are exceptions to this rule. For more information, go to When to fill out a T4A slip.

Related links

• Calculate deductions and contributions
• Send your deductions
• Report income deductions
• Penalties, interest or other consequences