Box O – Retiring Allowance (Code: RJ)
Include in box O of the RL-1 slip (see courtesy translation RL-1-T) a retiring allowance (also called “severance pay”) paid to an individual on or after the retirement of the individual in recognition of long service, and any amount paid to compensate the loss of employment.
A retiring allowance may include an amount paid as an indemnity in lieu of notice. It may also include unused sick-leave credits refunded to the employee upon:
- termination of employment
A retiring allowance may also include an amount paid as damages for the loss of employment or an amount paid pursuant to an order or a judgment of a competent court, if a causal relationship exists between the loss of employment and the amount paid. For example, an amount paid for breach of an employment contract constitutes a retiring allowance, as long as the amount is not included in income under another provision of the Taxation Act.
Any amount related to vacation days accumulated to the date of retirement is considered to be salary or wages and must be entered in box A of the RL-1 slip.
You must indicate the source of this income by entering code RJ in the box marked “Code (case O)” of the RL-1 slip.
For more information on the codes to enter in the box marked “Code (case O),” consult RL-1 Slip – Box Marked “Code (case O)”.