Police forces regularly allow their police officers to provide security or other special or extra duty services to third parties for events such as sporting or entertainment events, or construction projects where the flow of traffic is impeded.

If you make a payment to a police officer for special or extra duty pay (SEDP), you have to report the payment on a T4 slip.

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• Steps
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Steps

1. Determine if the CRA’s administrative policy applies

   The CRA considers a third party that pays SEDP to a police officer to be their employer.

   The third party is responsible for deducting CPP, EI and income tax, and for reporting the payment on a T4 slip, unless the police force assumes responsibility.

   Under the option to apply the CRA’s administrative policy, the individual police force, who is the regular employer of the police officer, can assume these responsibilities.

   If the police force does not assume these responsibilities, the third party is responsible.

2. Withhold payroll deductions

   If you have the responsibility of withholding deductions on the SEDP, you must withhold the following deductions:

   • Income tax
   • CPP contributions (unless the employment is covered by the Royal Canadian Mounted Police Pension (RCMP) Continuation Act)
   • EI premiums (unless the special or extra duty services are performed by Sûreté du Québec (SQ) officers as their employment is not insurable)

   • SEDP paid directly from a third party

     If you are a third party paying the SEDP, you must calculate the employee's CPP contributions and EI premiums without taking into account CPP contributions or EI premiums made by the police force or by any other employer in the year.

   • SEDP paid directly from the police force

     Under the option to apply the CRA’s administrative policy, if you are the police force, you can calculate the employee's CPP contributions and EI premiums taking into account the previous CPP contributions and EI premiums withheld by the police force on the officer's regular salary and SEDP paid earlier in the year.

   Learn more on how to calculate: How to calculate

3. Report the payment on a T4 slip

   If you have the responsibility of reporting the SEDP, you must report the following amounts on a T4 slip:

   • Box 14 - Employment income
   • Box 24 - EI insurable earnings
   • Box 26 - CPP/QPP pensionable earnings

   Learn more: How to report - T4 slip - Information for employers

References

Related

CPP/EI explained, Police forces and extra duty

Legislation

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