Tax deductions from commission remuneration from OnCanada Payroll.ca

If an employee is paid on commission or receives a salary plus commission, you can deduct tax in one of the following ways:

• Employees who earn commission without expensesIf you pay commission at the same time you pay salary, add this amount to the salary, then use the table method.If you pay commissions periodically or the amounts fluctuate, you may want to use the bonus method to determine the tax to deduct from the commission payment. See the article on “Bonuses and retroactive pay increases” in our next Newsletter to find out how to do this.
• Employees who earn commission with expenses To calculate the amount of tax to deduct, you can use the tables on diskette (TOD), the formula method or the manual calculation method found in Part A of the Payroll Deductions Tables (T4032).

Note

If an employee does not file Form TD1X, or revokes in writing-during the year-the election he or she made in completing Form TD1X, calculate the tax deductions using the table method.

Employees who claim employment expenses on their income tax return must have their employer complete Form T2200, Declaration of Conditions of Employment.

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