The beginning of a New Year is a great time for all employees to consider reviewing their personal tax declarations. Your tax exemptions are displayed in the upper right corner of your pay statement.
Why should I review my Declarations?
One or more factors might prompt an individual to submit an updated tax declaration to their employer:
When does the Canada Revenue Agency require me to submit a new Declaration?
The Canada Revenue Agency (CRA) does not require each individual to submit a new TD1 form to their employer each year. However, they recommend that each individual who declares more than the Basic Exemption Amount review their tax exemption declarations at the beginning of each calendar year.
Whenever an individual’s applicable tax exemptions change, the CRA requires an employee to submit a new TD1 form (and a TD1-ON form as well, if above Basic Declaration amounts) to their employer within 7 days, to help ensure there are no negative impacts on the individual at tax time.
Has anything changed with the advent of a new payroll system?
McMaster has changed from a single pay statement per employee each pay, to multiple pay statements for a limited number of employees who hold multiple jobs at McMaster. The majority of employees still have a single pay statement each pay. This is due to the way PeopleSoft stores Year-to-Date values when corporate EI rates differ, in support of the Canada Revenue Agency’s requirement to report these on separate tax slips.
For example, an employee who holds both a Teaching Assistant position and a Casual worker would still see a single pay statement. However, an employee who holds both a position covered by the collective agreement with UNIFOR and a Casual position would see two statements, as would an employee in the TMG group who is also a Part-Time Instructor.
If I am receiving two pay statements each pay, what do I need to know?
Payroll systems treat each paycheque separately when calculating income tax, so employees who receive multiple statements for the same pay period may have seen a reduction in the total income tax being deducted across the two statements, to a greater or lesser degree. Employees who receive multiple statements are strongly encouraged to review their pay statement tax deductions, and to submit revised TD1 and TD1-ON forms if they determine that their tax exemption declarations require any change.
What options are available to me if my income tax exemption needs have changed?
Several options are presented on the Tax Exemption Declaration forms:
If you have any questions regarding your personal income tax exemption declaration, the best resource to contact for assistance or advice would be an Income Tax Specialist.
Where can I access the TD1 and TD1-ON forms?
Links to the Canada Revenue Agency’s Tax Exemption Declaration forms can be found online.
What should I do with my completed forms?
Completed, dated, and signed TD1 and TD1-ON forms are submitted to the HR Office supporting your area.
If you have any questions regarding submitting your completed TD1 and TD1-ON forms, please contact your HR Advisor.