Remuneration Not Subject to Source Deductions of Québec Income Tax
As a rule, you do not have to withhold income tax from the following types of remuneration:
- certain taxable benefits;
- amounts paid by a trustee of a profit-sharing plan, other than a single payment in full satisfaction of all the employee's rights in the plan, if the payment must be included in the beneficiary's income;
- amounts paid by a trustee of an employee trust;
- certain indemnities paid further to an industrial accident (CNESST);
- pension benefits (single payment or periodic payment) paid to a person resident outside Québec;
- periodic annuity payments from a registered retirement savings plan (RRSP);
- the portion of a payment from a registered retirement income fund (RRIF) that represents the minimum amount;
- patronage dividends;
- amounts that are not taxable;
- scholarships, bursaries or fellowships paid to a person who is not an employee (when paid to an employee, such amounts may be considered a taxable benefit and may therefore be subject to source deductions of income tax);
- single payments from a registered pension plan (RPP), a deferred profit-sharing plan (DPSP), an RRSP, a voluntary retirement savings plan (VRSP), a pooled registered pension plan (PRPP) or a RRIF, if they are transferred directly to another plan and not paid to the beneficiary;
- amounts you pay to a trustee of a profit-sharing plan or of an employee trust, or to a custodian of an employee benefit plan;
- employment income paid to an employee who requested an exemption from source deductions of income tax on the Source Deductions Return (form TP-1015.3-V) for the year concerned;
- amounts paid to an employee by a person with whom the employer is not dealing at arm's length (it is the person, rather than the employer, who must withhold income tax from such an amount, where applicable).
Under special rules that apply to certain types of remuneration, you are not required to withhold income tax on all or a portion of that remuneration. See Special Cases – Source Deductions and Employer Contributions in Certain Situations.
To find out if an amount you pay is subject to source deductions of income tax, see Table of Remuneration Subject to Source Deductions and Employer Contributions.