Source deductions of income tax

If you pay an employee for overtime done during a pay period and you pay the amount with the employee's salary or wages for the period, add the amount to the salary or wages and calculate the source deduction of income tax.

However, if the overtime is paid in a pay period other than the period in which it was done (in other words, if you are paying the employee for accumulated overtime), use the method applicable to gratuities to calculate the source deduction of income tax.

Québec Pension Plan (QPP) contributions

If you pay an employee for overtime done during a pay period and you pay the amount with the employee's salary or wages for the period, add the amount to the salary or wages to calculate the QPP contributions.

If you pay the amount separately from the employee's salary or wages, use the method applicable to gratuities to calculate the contribution.

Québec parental insurance plan (QPIP) premiums and other employer contributions

If you pay an employee for overtime done during a pay period, the amount is subject to:

• Québec parental insurance plan (QPIP) premiums;
• the contribution to the health services fund;
• the contribution related to labour standards;
• the contribution to the Workforce Skills Development and Recognition Fund (WSDRF) (if applicable). 

You must include this amount in your total payroll used to calculate your health services fund contribution rate and your participation in workforce skills development.