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How to use PDOC to – Calculate commissions

Information

Throughout the Payroll Deductions Online Calculator (PDOC), additional information about terms is available through the help button. If you select a link in the help text, a new browser window will open.

The information on the screens are customized for each province and/or territory.

Step-by-Step Commission Calculation

Welcome Page

The following options are available on the Payroll Deductions Online Calculator landing page:

Note 1: You can only do one type of calculation at a time.

Note 2: Use the commission tax calculation method for employees who incur expenses to earn commission income. Form TD1X, Statement of Commission Income and Expenses for Payroll Tax Deductions, has to be completed.

  1. Select the "Commission" icon.
  2. Select the "Next" button to start a new payroll deductions calculation.

Step 1: Employee Information

When you select the "Commission" icon and "Next" button, you will be directed to Step 1 of the commission calculation.

  1. The employee's name and/or the employer's name are optional fields.

    Note: If you enter the employee's name, it will be automatically included in the file name when you save the result at the end of the calculation. The application will accept a blank field.

  2. Select the province or territory of employment (normally where your business is located or where the employee reports for work). This is a required field. For more information, consult Determine the province of employment (POE) - Canada.ca.
  3. Select the date the employee is paid. This is a required field.

    Note: The employment payment date will determine the employee's income tax rate, as well as CPP/QPP and EI related figures, in order to generate the payroll deduction result. This date will also be included in the file name when you save the result at the end of the calculation.

  4. Select the "Next" button to continue or the "Previous" button to change the type of calculation. All of the information will be carried forward to the applicable screens as necessary.

    Note: If the "Province or territory of employment" and/or the "Date the employee is paid" fields are not selected, an error message will display after the "Next" button is selected.

Step 2: Commission

Gross Income:

  1. Enter the total remuneration amount for the year as indicated on the employee's Form TD1X. This is a required field.
  2. Enter the total commission expenses for the year as indicated on the employee's Form TD1X. This is a required field.
  3. Enter the estimated deductions for RRSP, RPP and PRPP from commission for the year, if applicable.
  4. Enter commission income for this pay period. This is a required field.
  5. Enter the number of days since the last payment for the current year. If this is the first payment of the year, enter the number of days since and including January 1 or since and including the date the employee began this employment (whichever is later).
  6. Select additional options for the pay period if applicable. If no additional options apply, select the "Next" button to continue.

    The options are:

    • If you selected "Employer's contributions to the employee's RRSP":
      1. Enter the contributions employer made to the employee's RRSP if applicable.
      2. The option stating that the employee cannot withdraw amounts from a group RRSP is selected by default. 
    • If you selected "Employee's Contributions to RRSPs or RPPs or PRPPs":
      1. Enter the contributions the employee made to an RRSP if applicable. This amount must be deducted at source and the amount entered will be displayed under salary or wages income on the result screen.
      2. Enter the contributions the employee made to an RPP if applicable. This amount must be deducted at source and the amount entered will be displayed under salary or wages income on the result screen.
      3. Enter the contributions the employee made to a PRPP if applicable. This amount must be deducted at source and the amount entered will be displayed under salary or wages income on the result screen.
    • If you selected "Number of dependent children age 18 years or under and/or number of dependents of any age with mental or physical impairment" (Ontario only)
      1. Enter the number of dependent children age 18 year or under and/or the number of dependents of any age with mental or physical impairment
    • If you selected "Tax exempt employment income situated on a reserve:
      1. Enter the tax exempt amount from the income entered in “Enter total annual remuneration”.
      2. Select the checkbox if you elect to have this tax exempt amount pensionable.
      3. Enter the tax exempt amount from the income entered in “Commission income for this pay period”.
      4. Select the checkbox if you elect to have this tax exempt amount pensionable.
    • If you selected "Other annual deductions and non-refundable tax credit amounts for the year ":
      1. Enter the other deduction amounts, such as child care expenses and support payments, approved by a tax services office or tax centre.
    • For "In (year selected), the employer deducted QPP contributions (including the second additional contribution (QPP2), if applicable) before transferring employee to another province or territory" select "Yes" or "No" based on the employee's situation.

      Note: If Quebec was selected in Step 1, this would indicate CPP and CPP2 contributions

  7. Select the "Next" button to continue or the "Previous" button to change the information entered in the previous step. All of the information will be carried forward to the applicable screens as necessary.

Step 3: Additional Information

TD1 Federal and TD1 Provincial Tax Credit Return:

Apply personal credits by using the total claim amount from the TD1 forms or the claim codes option. If you are using the claim codes option then see the following steps. 

  1. Select the range of the total amount claimed on line 13 of federal Form TD1. If you do not select a range, the default will be the range that includes the federal basic personal amount allowed for that year.
  2. Enter in the applicable field any additional tax deductions requested by the employee from the back of Form TD1.
  3. Select the range of the total amount claim from the provincial or territorial Form TD1. If you do not select a range, the default will be the range that includes the provincial or territorial basic personal amount allowed for that year.

Canada Pension Plan (CPP) or Quebec Pension Plan (QPP):

Select one of the following three options:

If you selected "In (year selected), the employer deducted QPP contributions and second additional QPP contributions (or CPP and second additional CPP contributions if Quebec is the province of employment) before transferring employee to another province or territory" on the previous screen:

Employment Insurance (EI):

  1. Select one of the following options:
    • EI maximum annual premium has been reached: Select this option if the employee has reached the maximum employee premium amount for the year. This will ensure the employee and employer do not contribute more than the maximum annual premiums for the year.

      Note: Do not include any EI premium that a previous employer may have deducted.

    • Year-to-date amount (from your records): Select this option if the employee's maximum EI premiums or maximum insurable earnings have not yet been reached. Enter the year-to-date insurable earnings amount and/or EI premiums deducted from your records. This will ensure the employee and employer do not contribute more than the maximum annual premiums for the year. Based on the data you enter, the system will generate the total amount on the Result page to be used next time.

      Note: This option is selected by default.

    • EI exempt: Choose this option when processing a calculation for types of income not subject to EI premiums. When you select the EI exempt option, the tax amount will rise accordingly because the EI credit is not applied to this type of income.
    • QPIP exempt (Quebec only): Select this option if the type of income is not subject to QPIP premiums. The tax amount will rise accordingly because the QPIP credit is not applied to the tax calculation.
    • EI and QPIP exempt (Quebec only): Select this option if the type of income is not subject to EI and QPIP premiums. The tax amount will rise accordingly because the EI and QPIP credits are not applied to the tax calculation.
    • Employer's Employment Insurance (EI) Premium Rate:  The employer's contribution of employment insurance premiums is an amount equal to 1.4 times the total of the employee's premiums, unless a reduced rate applies.
  2. Select "Calculate" to proceed to the Employer and Employee result pages, or select "Previous" to change the information entered in the previous step. All of the information will be carried forward to the applicable screens as necessary.

    Note: If "Total remuneration", "Total commission expenses", and/or "Commission income" are not entered, you will get an error message when you select the "Calculate" button.

Payroll Deductions Result – Commission

The results for "Employee Deductions" and "Employer Remittances Summary" are displayed on two separate screens based on the information you entered.

Employee Payroll Deductions Result:

Employee payroll deductions result is calculated based on the data you entered. The detail inputted data is also listed in the second part. Some of the items will display only if an amount has been entered.

You can use the "View results in PDF" button to save and/or print the result.

Employer Remittance Summary:

This summary provides the combined CPP/QPP contributions, CPP2/QPP2 contributions, EI premiums, and federal and provincial/territorial tax deductions for remittance.

For employees in Quebec, the employer should remit QPP/QPP2 to Revenu Québec.

To print and/or save the employee (EE) and employer (ER) results in PDF format:

To print and/or save the combined employee deduction result and employer remittance summary in PDF format:

To make changes to the current calculation:

To do another calculation:

To select a different calculation type:

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2024-06-25