If you are an eligible shipowner and you employ a sailor who is resident in Québec in a given year and for whom you obtained a certificate from the Ministère des Transports et de la Mobilité durable, you are not required to withhold income tax from the portion of the sailor's gross remuneration that gives entitlement to a deduction for employment income earned on a vessel (that is, 75% of the remuneration).
If, for a pay period, the conditions of the sailor's employment are not the same as at the time you obtained the certificate, you must withhold income tax from the full amount of the sailor's gross remuneration for the period.
The remuneration paid to a sailor is subject to the following:
- Québec Pension Plan (QPP) contributions;
- 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).
Similarly, you must include the remuneration in your total payroll used to calculate your health services fund contribution rate and your participation in workforce skills development.
If you grant the employee a taxable benefit because they acquired a share under a stock option or disposed of such a share, the value of the benefit may give entitlement to the deduction in question, even if the employee receives the benefit for a period in which they are no longer entitled to the deduction. As a rule, this applies if the stock option was granted during a period in which the employee was entitled to the deduction. Contact us for more information.