Reducing remuneration subject to income tax

Certain amounts that you deduct from the remuneration you pay an employee, as well as other authorized or claimed amounts, can reduce the amount of remuneration from which you deduct tax for the pay period. Reduce the remuneration by the following amounts before you calculate tax:

Do not subtract CPP contributions and EI premiums to determine the remuneration that requires tax deductions.


David is paid weekly (52 pay periods per year). The remuneration that requires tax deductions will be his gross weekly remuneration minus the weekly deductions.

Step 1: Calculate the gross weekly remuneration
His gross weekly remuneration are equal to his basic weekly salary of $500 plus his taxable benefits of $50.00. The total is $550.00.

Step 2: Calculate the weekly deductions
The weekly deductions are equal to his RPP contributions of $25.00 plus union dues deductions of $5.50 plus his deduction for living in a prescribed zone of $77.00 ($11.00 per day × 7 days). The total weekly deductions amount is $107.50.

Step 3: Calculate the weekly net remuneration on which you have to deduct income tax
Subtract the weekly deductions amount you calculated in step 2 from the gross weekly remuneration in step 1. The result will be the net weekly remuneration on which you have to deduct income tax.
The gross weekly remuneration of $550 minus the total weekly deductions of $107.50 equals the remuneration that requires tax deductions at source of $442.50.

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