Search results
Apr 29, 2024 · For example, if the stipends are included in the portion of your taxable income that is $55,867 or less in 2024, the federal tax on them would be 15%. Similarly, the provincial income tax on stipends varies depending on the province in which you reside and your overall taxable income.
- On this page
- Employee wants to increase income tax deductions
- Employee wants to reduce income tax deductions
- Employer or payer wants to reduce income tax deductions (blanket waiver for $15,000 or less)
- Non-resident employer with non-resident employees working in Canada who want a waiver or to reduce income tax deductions
- Life events that affect CPP, EI and income tax deductions
- References
•Employee wants to increase income tax deductions
•Employee wants to reduce income tax deductions
•Employer or payer wants to reduce income tax deductions (blanket waiver for $15,000 or less)
•Non-resident employer with non-resident employees working in Canada who want a waiver or to reduce income tax deductions
•Life events that affect CPP, EI and income tax withholdings
•References
Employees may want to increase income tax deductions to avoid having to pay a large amount of tax when they file their income tax and benefit return. For example, in the following situations, insufficient income tax may be deducted:
•individual works part-time for different employers during the year
•individual no longer pays for child care
•employee's province of employment is not the same as their province of residence and they will not have enough income tax deducted
There are many other deductions from income, or non-refundable tax credits that are not part of the TD1 form that may be used to reduce income tax deducted at source.
These require the employee to apply for a letter of authority. A letter of authority from the CRA is required when employees want to reduce income tax deductions in the following situations:
•employee makes charitable donations to registered charities or other qualified donees
•employee has employment-related expenses
•employee pays for child care
•employee makes deductible RRSP contributions himself during the year
You may request blanket waivers when both of the following occur:
•You will be making a lump-sum payment to your employees
•You anticipate that your employees will want to contribute all or a portion of the lump-sum payment into an RRSP
Blanket waivers, when applicable, eliminate the need for each employee to request a letter of authority. If approved by the CRA, you will receive a blanket waiver letter providing the details of the approval. You will also receive a declaration of intent form which you will provide to each employee, as applicable. This form is completed by each employee and given to the employer to confirm that the employee will be contributing to an RRSP.
If you are a non-resident employer and you are sending non-resident employees to work in Canada, your tax withholding obligations are the same as for Canadian resident employers.
If you want to be relieved of your obligation to withhold income tax for your qualifying non-resident employees, you must become a certified non-resident employer by filling out Form RC473, Application for Non-Resident Employer Certification.
Depending on the situation, you may still have to withhold Canada Pension Plan (CPP) contributions and Employment Insurance (EI) premiums.
Learn more: Non-resident employer certification.
You may need to determine whether you should deduct CPP contributions, EI premiums and income tax from payments you make to employees in specific situations. For example:
•employee is turning 18
•employee is at least 65 years, but under 70, and provided Form CPT30, Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election
•employee is injured during work related duties
•employee is disabled under the CPP
•employee dies
Legislation
ITA: 153(1.1) Payment would cause undue hardship ITA: 153(1.2) Election to increase tax deductions ITA: 227(12) Employee/Employer cannot agree to waive tax
May 4, 2024 · Intern Stipends. Interns are one of the largest groups that receive stipends. Organizations provide stipends to help offset living and commuting costs for interns during their (usually) unpaid internship term. Stipend amounts vary based on the employer and internship duration but often range from $500 – $1,500 monthly.
- (1)
Apr 28, 2022 · Waiving Health & Dental Only: Mandatory plans do let employees opt-out / waive health and dental coverage only. If you have health and dental coverage elsewhere, you can choose to forgo the health and dental coverage offered through your employer’s plan. You do so by following the insurer-required process, which might have you provide proof ...
- Cindy Danielson
May 21, 2024 · It helps offset expenses, such as housing and food. Unlike a salary, a stipend is not a payment for hours worked or services provided. Stipends do not have to meet minimum wage requirements, and receiving a stipend does not make you an employee. People who receive a stipend don't have a right to overtime, vacation days, pay statements or ...
Mar 27, 2023 · Doing this could lower morale. Other cons of a health insurance stipend include the following: Employers must pay payroll tax on reimbursements totaling 7.65%. (6.2% for social security and 1.45% for Medicare) Employees must pay taxes on the amounts received as income, usually between 20% to 40%.
People also ask
Does a stipend make you an employee?
Are stipends tax-free?
Are employee stipends taxable income?
Do stipends have to meet minimum wage requirements?
Are stipends legal?
What are the benefits of a stipend?
The loan can be received by the employee or any other person or partnership, including, for example, the employee's spouse. A benefit can also arise from any other indebtedness such as the unpaid purchase price of goods or services, or an overpayment of salary that your employee repays you over a period of time.
