Overtime payments
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Calculate payroll deductions and contributions
- Get ready to make deductions
- Determine if a benefit is taxable
- Determine the tax treatment of payments other than regular employment income
- Overtime payments
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Other payments
- Advance payments
- Annuity payments
- Bonus or irregular payments
- Commission payments
- Employee who dies
- Employee who is a non-resident
- Employee who is hired as a family member or a related person
- Employee who is leaving
- Employee who is on parental leave
- Employee who is registered, or entitled to be registered under the Indian Act
- Employee who is working outside Canada for a Canadian company or the Canadian government
- Employee's life events: Start, stop or restart CPP deductions
- Employer who is a non-resident employer
- Employer who provides a wage-loss replacement plan for short-term disability (reduced EI premium rate)
- Lump-sum payments
- Patronage payments
- Payments from a registered disability savings plan (RDSP)
- Payments from an employees profit sharing plan (EPSP)
- Payments from retirement compensation arrangements
- Payments from wage-loss replacement plans
- Payments of directors' fees
- Payments of fees for services
- Payments of retiring allowances
- Payments of wages in lieu of termination notice
- Payments related to death benefits
- Payments related to pension or superannuation
- Payments related to research grants
- Payments related to salary deferral arrangements
- Payments related to tenure of office (elected or appointed officials)
- Payments related to worker's compensation claims
- Payments to agriculture and horticulture workers
- Payments to barbers and hairdressers
- Payments to caregivers, baby-sitters and domestic workers
- Payments to emergency services volunteers
- Payments to employee of an employment agency (temporary-help)
- Payments to fishers
- Payments to foreign seasonal agricultural workers
- Payments to forestry workers for power saws or tree trimmers
- Payments to police officers for special or extra duty from third parties
- Payments to taxi and other passenger-carrying drivers
- Payments to workers at a circus, fair, parade or similar activity
- Qualifying retroactive lump-sum payments
- Retroactive payments
- Taxable benefits
- Tips and gratuities
- How to calculate
- Make corrections before filing
Overtime payments
This new content has been developed for clarity, completeness and plain language. No changes were made to the CRA's treatment of overtime payments.
You may be required to pay your employees overtime payments.
This page provides your payroll withholding and reporting obligations for overtime payments. For any questions relating to federal or provincial rules regarding overtime payments, refer to:
On this page
Steps
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Determine if you need to report the payment on a slip
You must report the payment as employment income on your employee’s T4 slip in the year the overtime payments are received.
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Withhold payroll deductions from the overtime payment
You must withhold the following deductions from the overtime payment:
- Income tax
- EI premiums
- CPP contributions
Depending on the situation, you must use a different method to calculate the deductions to withhold from the payment.
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Overtime payments paid in the same pay period
If you pay your employee overtime payments in the same pay period, you have to calculate income tax withholdings, EI premiums and CPP contributions in the same manner as you would for regular salary.
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Overtime payments paid in a later pay period
If you pay your employee overtime payments in a later pay period, you have to calculate:
- Income tax withholdings using the bonus or irregular payments method
- EI premiums in the same manner as you would for regular salary
- CPP contributions using the bonus or irregular payments method
Learn how to calculate payroll deductions: How to calculate
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Report the payment on a T4 slip
You must report the following on the T4 slip:
- Box 14 - Employment income
- Box 24 - EI insurable earnings
- Box 26 - CPP/QPP pensionable earnings
- Box 56 - PPIP insurable earnings if your employee worked in the province of Quebec
Learn how to report the payment: T4 slip - Information for employers
References
Legislation
- ITA: 5(1)
- Income from office or employment
- ITA: 153(1)(a)
- Withholding
- ITR: 102
- Periodic payments
- ITR: 103
- Non-periodic payments
- ITR: 200(1)
- Remuneration and benefits
- CPP: 12(1)
- Amount of contributory salary and wages
- IECPR: 2(1)
- Amount of insurable earnings
- IECPR: 2(3)
- Amounts not included in insurable earnings
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2017-01-19