Indians

We recognize that many First Nations people in Canada prefer not to describe themselves as Indians. However, we use the term Indian because it has a legal meaning in the Indian Act.

The salary or wages, benefits or allowances you paid to an Indian may be taxable, tax-exempt, or partly tax-exempt. Use Form TD1-IN, Determination of Exemption of an Indian’s Employment Income, to determine the type of exemption that applies to an Indian’s employment income. For more information, you can also refer to Chapter 7 of Guide T4001, Employers’ Guide – Payroll Deductions and Remittances.

If you pay taxable income to a self-employed Indian who works as a fisher, barber or hairdresser, taxi driver or driver of other passenger-carrying vehicles, you may have to deduct EI premiums (and PPIP premiums for workers in Quebec) and report the amounts on a T4 slip following the instructions below. Payments you made to an Indian who is not your employee may be taxable, tax-exempt, or partly tax-exempt.

Note

If you paid a retiring allowance to an Indian, see Retiring allowances and Code 69 – Indian (exempt income) – Non-eligible retiring allowances for more information.

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