Foreign Farm Workers
Source deductions of income tax
As a rule, a foreign farm worker who is not resident in Canada and who has a valid work permit exclusively for seasonal farm work issued by the Canadian immigration authorities under a recognized federal program can claim a deduction in respect of income from such work.
Recognized federal programs
- Seasonal Agricultural Workers Program
- Agriculture Stream
If you employ such a worker, you do not have to withhold income tax on the gross remuneration you pay the worker, provided he or she meets both the following requirements:
- The worker obtained, under the Temporary Foreign Worker Program administered by the federal government, form TD1, Personal Tax Credits Return, duly certified by a designated government official by means of an official stamp affixed to the form.
- The worker's estimated income for the year from all sources is less than $29,088.
If the worker does not meet these requirements, you must use deduction code “O” to withhold income tax from a portion of the gross remuneration you pay the worker.
To calculate the remuneration subject to source deductions of income tax for such an employee, you must subtract from the gross remuneration you pay the worker for a pay period the portion of the remuneration that gives entitlement to the deduction for foreign farm workers.
To calculate the portion of the remuneration that gives entitlement to the deduction, you must first subtract from the gross remuneration that you pay to the worker for a pay period certain expenses that the worker is required to assume in carrying out his or her work duties for the pay period (for example, expenses for supplies used directly by the worker in the carrying out of his or her duties, such as work gloves or a hatchet). Then multiply the result by 50%. The amount thus determined is the portion of the worker's remuneration that gives entitlement to the deduction.
Foreign farm workers are not required to file the Source Deductions Return (form TP-1015.3-V).
Québec Pension Plan contributions, Québec parental insurance plan premiums and other employer contributions
All of the salaries or wages paid to foreign farm workers entitled to a deduction in the calculation of their taxable income are subject to the following:
- employee and employer Québec Pension Plan (QPP) contributions
- employee and employer Québec parental insurance plan (QPIP) premiums
- the contribution to the health services fund
- the contribution related to labour standards
Moreover, the total of such remuneration must also be included in your total payroll used to calculate your health services contribution rate, your participation in workforce skills development and, if applicable, your contribution to the Workforce Skills Development and Recognition Fund (WSDRF).