Income tax

Income tax deductions are based on graduated rates and vary based on income level. Federal and provincial income tax is deducted as a single amount and remitted to the federal government on the employee’s behalf.  The taxes deducted and remitted may not be your final tax obligation. By April 30th of each year individuals are required to file an individual tax return with the Canada Revenue Agency (CRA) for the prior calendar year. Upon filing, your tax obligation is calculated and any taxes owing or refundable will be settled between you and the CRA.

In some instances, employees can reduce the amount of income tax deducted from their pay by claiming certain allowable tax credits through Workday. View the Workday user guide on updating tax elections.

Please note that even if you indicate on your TD1 forms that your income for the year will be lower than your allowable tax credits (in effect making you exempt from paying income tax), you will still have Canada Pension Plan (CPP) contributions and Employment Insurance (EI) premiums deducted from your pay.

Additional information

Canada Pension Plan (CPP) contributions

The Canada Pension Plan is designed to help provide Canadians with income for their retirement. It also provides benefits if they become disabled. CPP contributions are mandatory for employees 18 – 65 years of age, and optional for those employees between 65 and 70 years of age who are collecting a CPP pension while continuing to work.

Employees and the University contribute equally to the CPP with contributions being subject to annual maximums. If you reach the annual maximum, no more CPP deductions will be made for the remainder of the calendar year. Deductions will begin again each January until the maximum for that calendar year is reached.

Please note that CPP is separate from the University provided pension plan that is available to employees who meet the membership qualifications.

CPP - Working beyond age 65

Starting at age 65, you can choose not to contribute to the CPP.

To stop contributing, you must fill out form CPT30 Election to stop contributing to the Canada Pension Plan, or revocation of a prior election. Give a copy of the form to Human Resources, and send the original to the Canada Revenue Agency (CRA).

You can start contributing once again but only one change can be made per calendar year. To start contributing again, submit section D of a new CRA form CPT30 Election to stop contributing to the Canada Pension Plan, or revocation of a prior election. Give a copy of the form to Human Resources, and send the original to CRA.

Employment Insurance (EI) premiums

Employment Insurance (EI) provides temporary financial assistance to unemployed Canadians who have lost their job through no fault of their own. Canadians who are sick, pregnant, or caring for a newborn or adopted child, as well as those who must care for a family member who is seriously ill with a significant risk of death or who must provide care or support to their critically ill or injured child, may also be assisted by Employment Insurance.

Both employees and the university contribute to EI with premiums being subject to annual maximums. If you reach the annual maximum, no more EI deductions will be made for the remainder of the calendar year.  Deductions will begin again each January until the maximum for that calendar year is reached.

Non-resident taxation

Payroll is required to withhold taxes from Non-Resident Employees working in Canada in the same manner as Canadians (income tax, CPP contributions and EI premiums).

The exception to this legislation is payments to residents of countries that have a reciprocal tax treaty with Canada. In order to be fully or partially exempted from income tax in Canada, the employee must apply for a Regulation 102 waiver through the CRA and, once approved, present the CRA approved documentation to Payroll. CRA recommends that waiver applications be submitted 30 days prior to the beginning of the employment period to allow time for processing.

Completed Regulation 102 waiver applications can be submitted to:

Kitchener/Waterloo Tax Services Office
166 Frederick St.
Kitchener, ON
N2G 4N1
Phone Inquiries: 1-800-959-8281
Fax: 519-579-4532

Tuition receipts – T2202A

T2202A receipts (tuition and education amounts certificates) are not issued by Human Resources. These forms can be accessed through Quest.

Claiming Employment Related Expenses – T2200 Declaration of Conditions of Employment

There are instances where an employee may be able to deduct certain employment related expenses that are not reimbursed by the university from their taxable income. A form T2200 must be completed for an employee to be able to deduct the following types of employment expenses when completing their personal income tax return:

  • Travel expenses
  • Motor vehicle travel expenses
  • Office rent
  • Work space in the home expenses
  • Annual professional membership dues
  • Salary for substitute/assistant
  • Direct supplies

The T2200 form should be completed by the employee and reviewed and signed by the department head, director, or dean and should only be signed when the following circumstances are met:

  1. the employee is required by the contract of employment to pay for such expenses; and
  2. the employee has not been reimbursed and is not entitled to reimbursement for such expenses; and
  3. the expenses are directly applicable to the earning of income from employment; and
  4. in the case of supplies, they have been consumed directly in the performance of the duties of employment.

A signed T2200 does not provide an employee with any assurance that expenses incurred are deductible. The eligibility to deduct employment expenses is a matter between the employee and the CRA. Employees wishing to deduct employment expenses are advised to review the CRA's publications and /or seek advice from their personal tax consultant.

Please note that at the University, employee expenses required during the course of employment are typically directly paid by the employer or reimbursed from operating or research funds. It is typically only by exception that required employment expenses are personally incurred and not reimbursed.