Chapter 4: Statutory and Non-Statutory Deductions
4.5 Other Mandatory Deductions
The three source deductions—Canada Pension Plan, Employment Insurance, and income tax—are mandatory by federal legislation. In some circumstances, employers will be required to make other mandatory deductions, required by federal legislation, provincial legislation, court order, common law, or as part of the terms of agreement between the employer and employee.
4.5.1 Deductions Authorized by Legislation
4.5.1.1 Requirement to Pay (Canada Revenue Agency)
The CRA can require an employer to deduct amounts that an employee owes the CRA through a legal document called Requirement to Pay (RTP). The employee will receive a copy of the RTP from the CRA, and the employer is not required to further notify the employee or get the employee’s consent. It is mandatory for the employer to deduct and remit amounts specified by the CRA under an RTP.
RTPs, and any deductions an employer makes to fulfil an RTP, are authorized by either the Income Tax Act (s. 224) or the Excise Tax Act (s. 317) (Government of Canada, 2023).
4.5.1.2 Deductions for Meals and Lodging
The employment standards legislation in many Canadian jurisdictions allows for deductions for meals and lodging (also known as “room and board”) provided by the employer. In most cases, employment standards set a maximum daily, weekly, or monthly deduction for minimum-wage workers. Some jurisdictions have industry-specific deduction rules for meals and lodging.
HRinfodesk has a chart of the maximum deduction amounts in Canada (Saint-Cyr, 2023); payroll should check employment standards in the applicable jurisdiction if meals and/or lodging are provided and whether amounts for meals and/or lodging are deducted from employees’ gross earnings.
References
Government of Canada. (2023). Understanding a requirement to pay. https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/when-you-money-collections-cra/personal-debt/requirement-to-pay.html
Saint-Cyr, Y. (2023.). Maximum deductions permitted for board and lodging & meals/vehicle rates for travel expenses across Canada chart. HRinfodesk. https://www.hrinfodesk.com/preview.asp?article=20682
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