Employer who receives a notice of garnishment for the employee
Content has been updated for clarity, completeness and plain language. No changes were made to the existing legislative requirement.
You may have employees who owe the Government of Canada a sum of money and refuse to pay it. The CRA may garnish that employee’s salary and wages.
You must comply when you receive a notice for garnishment. Your employee who owes the debt cannot go after you for the amounts sent to the CRA.
The CRA sends a copy of the notice for garnishment to your employee who owes the debt at the same time they send it to you.
On this page
Steps
Determine if the CRA has garnished your employee’s salary or wages
If you received a requirement to pay or a demand on a third party notice and you are required to send the amount owed to the CRA from the net pay (employment income after withholding source deductions) instead of paying it to your employee, this means that the CRA has garnished your employee’s salary or wages.
Learn more: How to process a garnishment from the CRA
Determine if you need to report the payment from which the amounts were garnished on a T4 slip
You must report the salary and wages of your employee as employment income on your employee’s T4 slip in the year the salary and wages are received. The amounts garnished are not identified using any code or box on the T4 slip, but the amounts are still included in your employee's employment income, pensionable and insurable earnings.
Withhold payroll deductions
You must withhold the following payroll deductions from the salary and wages of your employee who is subject to a garnishment:
- Income tax
- EI premiums
- CPP contributions
Learn more: How to calculate
Remit the garnished amounts to the CRA
You must remit all amounts according to the instructions on the notice of garnishment and send it to the address indicated on the letter.
What if you do not remit the garnished amounts
If you fail to remit the garnished amounts on the notice (or if you refuse to do so), you become liable for the amount you didn't remit to the CRA up to the full amount of the garnishment. The CRA may take action to collect that amount from you.
What if you need more information
If you need more information, you can contact the CRA collections officer assigned to the case using the phone number on the letter you received.
Learn more: How to process a garnishment from the CRA
References
Related
Legislation
- ITA: 5(1)
- Income from office or employment
- ITA: 153(1)(a)
- Withholding
- ITA: 223(3)
- Registration in court
- ITR: 102
- Periodic payments
- ITR: 103
- Non-periodic payments
- ITR: 200(1)
- Remuneration and benefits
- CPP: 12(1)
- Amount of contributory salary and wages
- IECPR: 2(1)
- Amount of insurable earnings
- IECPR: 2(3)
- Amounts not included in insurable earnings