Income Tax Regulations — 102
102 (1) Except as otherwise provided in this Part, the amount to be deducted or withheld by an employer (a) from any payment of remuneration (in this subsection referred to as the payment ) made to an employee in his taxation year where he reports for work at an establishment of the employer in a province, in Canada beyond the limits of any province or outside Canada, and (b) for any pay period in which the payment is made by the employer shall be determined for each payment in accordance with the following rules: (c) an amount that is a notional remuneration for the year in respect of (i) a payment to the employee, and (ii) the amount, if any, of gratuities referred to in paragraph (a.1) of the definition remuneration in subsection 100(1) is deemed to be the amount determined by the formula A × B where A is the amount that is deemed for the purpose of this paragraph to be the mid-point of the applicable range of remuneration for the pay period, as provided in Schedule I, in which falls the total of (A) the payment referred to in subparagraph (i) made in the pay period, and (B) the amount of gratuities referred to in subparagraph (ii) declared by the employee for the pay period, and B is the maximum number of such pay periods in that year; (d) if the employee is not resident in Canada at the time of the payment, no personal credits will be allowed for the purposes of this subsection and, if the employee is resident in Canada at the time of the payment, the employee’s personal credits for the year are deemed to be the mid-point of the range of amounts of personal credits for a taxation year as provided for in section 2 of Schedule I; (e) an amount (in this subsection referred to as the notional tax for the year ) shall be computed in respect of that employee by (i) calculating the amount of tax payable for the year, as if that amount were calculated under subsection 117(2) of the Act and adjusted annually pursuant to section 117.1 of the Act, on the amount determined in accordance with paragraph (c) as if that amount represented the employee’s amount taxable for that year, and deducting the aggregate of (ii) the amount determined in accordance with paragraph (d) multiplied by the appropriate percentage for the year, (iii) an amount equal to (A) the amount determined in accordance with paragraph (c) multiplied by the employee’s premium rate for the year under the Employment Insurance Act , not exceeding the maximum amount of the premiums payable by the employee for the year under that Act, multiplied by (B) the appropriate percentage for the year, and (iv) an amount equal to (A) the product obtained when the difference between the amount determined in accordance with paragraph (c) and the amount determined under section 20 of the Canada Pension Plan for the year is multiplied by the employee’s contribution rate for the year under the Canada Pension Plan or under a provincial pension plan as defined in subsection 3(1) of that Act, not exceeding the maximum amount of such contributions payable by the employee for the year under the plan, multiplied by (B) the appropriate percentage for the year; (f) the amount determined in accordance with paragraph (e) shall be increased by, where applicable, the tax as determined under subsection 120(1) of the Act; (g) where the amount of notional remuneration for the year is income earned in the Province of Quebec, the amount determined in accordance with paragraph (e) shall be reduced by an amount that is the aggregate of (i) the amount that is deemed to be paid under subsection 120(2) of the Act as if there were no other source of income or loss for the year, and (ii) the amount by which the amount referred to in subparagraph (i) is increased by virtue of section 27 of the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act ; and (h) [Repealed, SOR/92-667, s. 1] (i) the amount to be deducted or withheld shall be computed by (i) dividing the