Canadian payroll terminology

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Availability. The generator is not yet live on lexsalim.com. United Kingdom support is in development; United States and Canada are planned.

Canadian support in the Free Payroll & Payslip Generator is planned. This glossary covers the terms on a Canadian pay statement. It states no rates, maximums or exemptions; the Canada Revenue Agency (CRA) and Revenu Québec publish those and they change each year.

Pay statement

The Canadian equivalent of a payslip. Provincial and territorial employment standards set what it must show; most require gross pay, each deduction, net pay and the pay period.

Federal and provincial income tax

Employers withhold both federal income tax and the income tax of the province or territory of employment. Each province has its own brackets and credits. In Québec, provincial tax is administered by Revenu Québec rather than the CRA, with its own forms and tables.

TD1 forms

The personal tax credits return an employee completes so the employer can apply the right federal and provincial credits when calculating withholding. There is a federal TD1 and a provincial or territorial one; Québec uses its own form (TP-1015.3-V).

CPP and QPP

The Canada Pension Plan is a contributory pension: the employee contributes through payroll and the employer matches. In Québec the equivalent is the Québec Pension Plan. Contributions apply to pensionable earnings above a basic exemption and up to an annual maximum, both set each year.

EI

Employment Insurance premiums are deducted from insurable earnings up to an annual maximum; the employer pays a higher matching premium. Québec has a separate Québec Parental Insurance Plan (QPIP) alongside a reduced EI rate.

Other deductions

Union dues, registered pension plan contributions, group benefits and garnishments appear as further deductions, each with its own tax treatment.

Net pay

Gross pay minus all statutory and other deductions.

Why Québec needs its own validation

Different tax administration, different pension plan, different parental insurance and different forms mean that a Québec rule pack must be validated separately from the rest of Canada before LexSalim can offer it.

Filing is separate

Producing a pay statement does not remit source deductions to the CRA or Revenu Québec, and does not prepare T4 or Relevé 1 slips. See Payslip generation versus payroll tax filing.