HRS insights: Canadian payroll requirements for non-resident employees in Canada—Are you complying?

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Employers may have to change the way their payroll systems deal with non-resident employees who:

  • Work in Canada, even for short periods
  • Are eligible to claim an exemption from paying tax in Canada under an income tax treaty

Many employers overlook the fact that these employees are subject to the payroll requirements imposed under Section 102 of the Income Tax Regulations (Reg. 102). Every employer—resident in Canada or not—must maintain a Canadian payroll system and withhold prescribed federal and provincial income tax for all employees who reside or physically work in Canada.

Learn more about the implications of recent and pending developments.