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Administrator Guide
Last Updated: 2025-05-30
Add Worker Federal Tax Elections (CAN)

Add Worker Federal Tax Elections (CAN)

Define company elections for federal and provincial taxes.
Verify that the worker has:
  • An assigned company.
  • An assigned pay group.
  • A valid work and primary home address in Canada.
Security:
Worker Data: Payroll (Company Specific) - CAN
 domain in the CAN Payroll functional area.
Enter federal tax elections for an employee when they submit a TD1 or TD1X instead of using self-service. If a worker works in more than 1 company, enter a separate set of tax elections for each company.
Only 1 set of elections can be in effect at a time. When calculating payroll for an employee, Workday uses the tax elections in effect on the payment date.
  1. Access the
    Add Worker CAN Tax Elections
     task and select the worker.
    When there are existing worker tax elections, you can view them by selecting:
    • Current Elections
    • All Elections
    As you complete this task, consider:
    Field
    Description
    Company
    Displays the company the employee is in on the
    Effective Date
    .
    When the employee has a future hire date, is terminated, or has positions in multiple companies on the
    Effective Date
    , select the company.
    Accept the default company displayed, or choose one or more companies from the list.
    Work Province
    Displays the province for primary work address, if it exists. Otherwise, it displays the province for the primary position business location.
    When the worker works in the U.S.,
    Work Province
     automatically populates to
    United States
    . When the worker works in any other country outside of Canada,
    Work Province
     automatically populates to
    Other
    .
    To enter future tax elections for another province, select the appropriate effective date and province. Example: If the employee is moving to another province, you can enter the tax elections for that province in advance.
  2. Enter worker tax elections on the
    Federal
     tab, recording information from the form TD Personal Tax Credits Return.
    TD1
    Field
    Description
    Basic Personal Amount
    Workday calculates the amount based on the
    Effective Date
    .
    Total Claim Amount
    Workday calculates the amount. If you select
    More than One Employer or Payer at the Same Time
    , Workday sets it to zero.
    Non-Resident
    Select to identify the worker as a nonresident for FIT taxes and set the
    Basic Personal Amount
     to zero.
    TD1X
    Enter the employee-provided TD1X Statement of Commission Income and Expenses for Payroll Tax Deductions.
    Field
    Description
    Inactive
    Workers can inactivate elections anytime during the year.
    Estimated Annual Net Commission Income
    Calculated from the estimated
    Commission
    ,
    Salary or Wages
    , and
    Commission Expenses
    .
    Estimated Annual Pension / Retirement Deduction
    Although
    Estimated Annual Pension / Retirement Deduction
     isn't on the federal TD1X form, Workday uses it in the tax calculation.
    You can provide this information and configure commission earnings for the
    Income Taxable (Withhold Taxes) [CAN]
     PCG. When configured, Workday uses the commission tax calculation instead of the regular periodic pay calculation.
    For more information about the commission tax calculation, see the
    View Payroll Tax/Allowance Data
     report for
    Federal Income Tax (FIT) [CAN].
    Federal Annual Values for Payments in the Effective Year
    Enter the next payroll payment date as the
    Effective Date
    . Workday annualizes the amount and calculates the values for the remaining periods in the year. Federal annual values only impact the tax calculation for payments within the effective year. If the tax election is valid for more than one year, enter a separate row and effective date per year.
    Field
    Description
    Annual Deductions
    The authorized amount for costs not deducted from the salary. Might include costs such as childcare, alimony, or maintenance payments.
    Annual Tax Credits
    The authorized amount for costs such as medical expenses and charitable donations.
    Labour-Sponsored Funds
    View only. Total amount the worker paid to purchase approved shares of capital stock in a labour-sponsored venture capital corporation.
    Add the
    Labour-Sponsored Funds (LCF/LCP)
     pay component group to your deductions to calculate the applicable federal tax credit. This credit is based on the amount withheld for the pay period, while respecting the annual credit limit.
    Estimated Annual Lump Sum Wages
    Field
    Description
    Inactive
    Select when you don't require Estimated Lump Sum.
    Estimated Annual Lump Sum
    Workday bases taxes on the expected lump sum wages for the calendar year.
    Outside Quebec, Workday uses the aggregate of the lump sum wages to determine the tax rate of the lump sum when:
    • A worker has earnings that are a combination of T4 and T4A lump sum payment types on their pay results.
    • You haven’t provided an
      Estimated Annual Lump Sum
      .
    Bonus - Regular Taxable Wages Override
    Field
    Description
    Inactive
    Inactivate this election once the worker receives a regular wages payment or once you no longer need it.
    Bonus - Regular Taxable Wages Override
    Enter an override amount for Workday to use instead of a regular taxable wage for a worker who's never received a regular wages payment through Workday.
    To calculate tax withholding for a regular bonus for an employee on leave for whom Workday hasn't yet processed payroll:
    1. Enter the bonus as pay input.
    2. Enter pay input for the worker for the same pay period.
    3. Mark it as a
      Special Entry
      .
    4. Assign the
      Pay Component
      Federal Income Tax (FIT) [CAN]
    5. In the
      Input Details
       section, select
      Bonus - Regular Taxable Wages Override
       in the
      Type
       field.
    6. Enter the gross amount typically paid to the worker for a pay period for Workday to use as the tax basis.
    7. For a Quebec worker, repeat the steps for the pay component
      Province Income Tax (QC-PIT) [CAN]
      .
    Example: For a worker making 78,000 CAD annually and paid biweekly, select
    Bonus - Regular Taxable Wages Override
     and enter 3,000 CAD. Workday uses the 3,000 CAD solely to determine how to tax the bonus and doesn't pay that amount to the worker.
    To report on the Annual Taxable Income for Bonus Calculation for a regular on-cycle or completed payroll result, use the
    Annual Taxable Income for Bonus Calculation
     related calculation.
    Federal (FIT)
    Specify whether the employee is exempt from the federal income tax. The effective date determines the number of months that are subject to taxation.
    Employment Insurance (EI)
    Specify if the employee is exempt from the employment insurance premium. The effective date determines the number of months that are subject to taxation.
    Canada Pension Plan (CPP) / Quebec Pension Plan (QPP)
    Specify if the employee is exempt from pension plan withholding and the reason for the exemption. The effective date determines the number of months that are subject to taxation.
    Canada Pension Plan Second Contribution (CPP2)/Quebec Pension Plan Second Contribution (QPP2)
    Specify if the employee is exempt from additional contributions to the Canada and Quebec pension plans and the reason for the exemption. The effective date determines the number of months that are subject to taxation.
    RPP or DPSP Registration Numbers
    Only displays when you:
    • Enter an effective date on or before 2020-12-31.
    • Didn't enable RPP or DPSP configuration for 2020 on the
      Edit Tenant Setup - Payroll
       task.
    Detached Employee - US - United States employment
    For detached employees working in the USA, select an
    Employment Code Election
    :
    • 16 - Detached employee - Social Security Agreement
      When selected, Workday reports code 16 in Box 29 of the T4 for employees whose province is USA.
    • No Social Security Agreement
    Detached Employee - ZZ - Other Countries employment
    For detached employees working in countries besides the USA, select an
    Employment Code Election
    :
    • 16 - Detached employee - Social Security Agreement
      When selected, Workday reports code 16 in Box 29 of the T4 for employees whose province is ZZ (Other).
    • No Social Security Agreement
    T4 - Box 29 - Employment Code
    Select the
    Employment Code Election
     to report in Box 29 of the T4 year-end form for the worker. Example: For a worker who withdraws from a deferral plan, you select
    14 - Withdrawal from a prescribed salary deferral arrangement plan
    . The worker's province isn’t USA or ZZ (Other) so Workday reports code 14 in Box 29 of their T4. Box 14 reports zero.
    TD1-IN Exemption Percent
    Enter the
    Percent Exempt
    . If the TD1-IN election is no longer required for the worker, enter a new election and select the
    Inactive
     check box.
Add worker Province tax elections.
You can view a worker's tax elections with these reports:
  • Worker CAN Tax Elections
  • Payee T1 Withholding Election
  • Worker TD1X Tax Elections
To correct a worker's tax elections, access the
Worker CAN Tax Elections
 report. In the first column, select
Worker Tax Election
Edit
 from the related actions menu.
If a worker changes companies, enter the worker's tax elections for the new company.