![]() ![]() Income tax requirements in this country are based on your residency, regardless of who your employer is or where they are located. If you work remotely from your residence in Canada, you are responsible for paying taxes here in Canada. Working remotely for an employer in another country In this case, when it comes time to file your taxes, you will need to pay the amount still owing when your employer has deducted less than the rate of your home province, or you will be entitled to a refund if they have withheld more. When you work for a company based in another province from your primary residence, there can be some complications when filing your income tax return.īecause income tax rates vary between provinces, when your employer withholds the tax base on the rate specified by one province, and the employee is required to pay the rate set by another province, there can be discrepancies. Working for an employer in another provinceĪs we mentioned above, income taxes withheld by employers and paid by workers are determined based on the provinces in which they are located. Detailed method –For this claim, you should account for your overall home expenses and determine your workspace as a percentage of your total living area to determine your tax credit.Įligible expenses include utilities (heat, electricity, water, home internet, repairs & maintenance, rent, office supplies paid out of pocket).įor example, if your monthly electricity bill is $100 ($1200 annually) and your home working space represents 10 per cent of your total living area, then you can claim 10 per cent - $120 - of your electricity bill towards your tax credit.įlat Rate method – insert the number of days you worked from home on form T777S of your income tax return up to a maximum of 250 days.ĭetailed method – complete the detailed section of Form T777s on your income tax return and ask your employer for a completed T2200S Declaration of Conditions of Employment for Working at Home Due to COVID-19.įind out more about claiming the COVID-19 remote work tax credit on the Government of Canada website.Flat rate method – Workers who meet the above criteria can claim $2 for each day they worked from home up to a maximum of $400 per individual in 2020 and $500 per individual in 20.Deductions lower the total income you are taxed on, reducing your overall income tax liability.Įmployees who are eligible for the remote working credit are those who have worked more than 50 per cent of the time from home for a period of at least four consecutive weeks during the year. This deduction can be claimed on your personal income tax return. So long as the employee and employer are based in the same province, these amounts match for easy filing.Īlso, similar to last year, once again for 2021 there is an available tax credit for Canadian workers who were required to work from home due to COVID-19. Similarly, companies withhold income tax and other deductibles based on the rate determined by the province where they are located. Under the existing Canadian tax laws, employees are taxed to the province where they reside. This is the simplest situation when it comes to filing your annual tax return, and in this case, remote working can create taxation benefits for you. Working for an employer in the same province Working remotely for an employer in another country.Working remotely for an employer in a different province.Working remotely for an employer in the same province as you reside.Several different working situations can affect how you file your tax return. The experiment with remote working had numerous benefits for both employees and employers, but it can also impact how you pay your taxes. ![]() This helped keep workers safe from catching or spreading COVID, it allowed businesses to continue operating when they might otherwise have had to shut down, and it gave employees a new level of work/life balance as they cut out the commute and performed their job duties from home. ![]() The global pandemic has had many more Canadians working remotely over the past two years than ever before. ![]()
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