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Administrator Guide
Last Updated: 2025-05-30
Set Up Nonresident Tax Treaty Withholding (CAN)

Set Up Nonresident Tax Treaty Withholding (CAN)

  • Set up company federal taxes.
  • Verify that the employee is assigned to a company and pay group.
  • Security:
    Worker Data: Payroll (Company Specific) - CAN
     domain.
Effective 2019-01-01, you can set up Workday to calculate taxes for nonresident workers and retirees earning income amounts for these services performed in Canada:
  • Annuities.
  • Investment income.
  • Pensions.
  • Research and development royalties.
  • Retirement compensation arrangements.
Set up Workday to honor tax treaties between Canada and other countries for nonresidents. Workday refers to the Canada Revenue Agency NR4 – Non-Resident Tax Withholding, Remitting, and Reporting (T4061) guide when calculating taxes and taxable wages for NR4 reporting.
You can use these web services to update tax treaty information:
  • Get Payroll CAN Worker Tax Treaties
  • Put Payroll CAN Worker Tax Treaty
  1. Access the
    Maintain Worker Tax Treaties
     task.
  2. Select the
    Worker
     and
    Tax Country
    .
  3. Select the tax
    Start Date
     and
    End Date
    .
  4. As you complete this task, consider:
    Option Description
    Tax Residency Country
    Select only 1 country of residence.
    Canada Payroll Income Codes
    Select only 1
    Canada Payroll Income Code
     per row.
    Exemption Code
    Select the applicable code.
    Withholding Rate
    Enter a
    Withholding Rate
     percentage if other than 25%.
  5. Add earnings that are subject to a tax treaty to the appropriate pay component groups:
    • NR Tax Income Code - 29 - RRSP – Refund of premiums
    • NR Tax Income Code - 35 - Research and development royalties
    • NR Tax Income Code - 36 - Retiring allowance
    • NR Tax Income Code - 37 - Retirement compensation arrangements
    • NR Tax Income Code - 39 - Superannuation or pension benefits – Periodic payments
    • NR Tax Income Code - 40 - Superannuation or pension benefits – Lump-sum payments
Workday calculates and reports on nonresident taxes according to configuration.