Other Income Attributable to Employment Duties Performed Partly or Entirely on a Reserve or Premises

Source deductions of income tax

As a rule, you are not required to withhold income tax from amounts you pay to an Indian if the amounts are from employment income that gives entitlement to the deduction for employment income situated on a reserve or premises. Such amounts may be:

  • a benefit paid under the Employment Insurance Act (federal statute) or the Act respecting parental insurance;
  • a benefit paid under the Act respecting the Québec Pension Plan or under an equivalent plan, within the meaning of the Act;
  • a retiring allowance;
  • a benefit paid under a registered pension plan (RPP);
  • a benefit paid under a wage loss replacement plan to which the beneficiary's employer contributed.

Where only a portion of the employment income gives entitlement to the deduction (see Salary or Wages from Employment Duties Performed Partly or Entirely on a Reserve or Premises), only an equivalent portion of the amounts listed above also gives entitlement to the deduction in the calculation of the taxable income of the Indian. Consequently, you are not required to withhold income tax from the portion of the amount that gives entitlement to the deduction.

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