Mon–Fri: 8:30 AM – 4:30 PM
Stoney Creek, ON L8G 1C1
Sending U.S. employees to work in Canada? Sort out payroll withholding before they travel
Canadian income tax can apply to pay for days worked in Canada, even when the treaty will exempt it in the end. We assess whether each employee fits a Regulation 102 waiver or your company fits non-resident employer certification, set up what’s needed, and keep day counts and T4 reporting on track.
or call (905) 561-1278
Your file is reviewed by Affan Khalid, CPA, CAOver 20 years of Canadian and international tax experience · 750+ Regulation 102 employee waiver and employer certification applications (combined) · About Affan
- U.S. employers with staff at Canadian customer sites, installations, audits or training
- HR and payroll teams managing recurring short trips to Canada
- Companies whose employees are already working in Canada
Takes about a minute. We reply by email to confirm the likely route. Submitting does not commit you to an engagement.
Request a payroll withholding review
A few quick questions about the trip. We’ll reply by email to confirm the likely route.
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Two routes: employee waiver or employer certification
Employee waiver (Form R102-R)
Each employee who expects treaty relief can ask CRA to waive withholding on their Canadian pay. Apply about 30 days before Canadian work starts or the first payment. An approved waiver applies to payments from its approval date and covers only that employee.
Non-resident employer certification (Form RC473)
A U.S. employer can apply once to stop withholding for qualifying employees, meaning treaty-exempt employees who work in Canada fewer than 45 days in the calendar year or are present fewer than 90 days in any 12-month period. Certification lasts up to two calendar years. The employer must track each employee’s days and still file T4 slips unless it reasonably expects an employee’s Canadian income to be CAN$10,000 or less. CRA can revoke certification if the conditions are not met.
The treaty test in plain terms
Under the Canada–U.S. tax treaty, a U.S. resident’s pay for work in Canada is generally exempt from Canadian tax if either it is CAN$10,000 or less for the year, or the employee is in Canada no more than 183 days in any 12-month period and the pay is not paid or borne by a Canadian employer or a Canadian permanent establishment. Any day or part of a day in Canada counts, including vacation days.
A treaty exemption doesn’t stop withholding by itself. The employer keeps withholding until CRA approves a waiver or certification.
Payroll items a waiver doesn’t settle
- CPP: U.S. employees may be exempt under the Canada–U.S. social security agreement with a certificate of coverage. Otherwise CPP may apply.
- EI: separate rules, so check case by case.
- Québec: work in Québec has separate Revenu Québec source-deduction and employer-contribution rules.
- T4 reporting: may still be required, even with certification.
- Payroll account: if withholding or reporting applies, the U.S. employer needs a CRA business number with a payroll account. We can register it.
What we need to assess the route
- Expected dates and provinces for each employee
- Each employee’s country of residence
- Which entity pays them
- The customer arrangement
- Pay for the Canadian days
- Whether the company has a Canadian office, entity or payroll account
Please don’t include SINs or payroll records in the first message. We’ll arrange a secure upload.
Why Lepore & Company
One coordinated contact
Registrations, withholding relief and filings for your Canadian activity are coordinated in one place, so nothing falls between advisers.
Senior CPA attention
Your file is reviewed by Affan Khalid, CPA, CA, who personally handles communication with CRA waiver officers and follow-up on information requests.
Case-specific work
Each application or registration is prepared on its own facts, working directly with CRA and, where needed, with your Canadian customer, payer or legal counsel.
We provide a fixed-fee quote after reviewing your information, generally following the initial call.
Lepore & Company CPA · 145 Highway 8, Stoney Creek, ON L8G 1C1 · (905) 561-1278 · Mon–Fri 8:30 AM – 4:30 PM ET
Why Affan Khalid
Affan Khalid, CPA, CA · Tax Partner & Principal
Over 20 years of Canadian and international tax experience, including senior tax roles at PwC and MNP.
Affan reviews each payroll-withholding file, prepares the waiver or certification application, and personally handles communication with CRA and follow-up on information requests.
Affan has handled more than 750 Regulation 102 employee waiver and non-resident employer certification applications combined, with a 100% approval record on those decided by CRA.
Each new application is reviewed on its own facts. Past results don’t guarantee the outcome of a new application.
Questions
Are trips under 183 days automatically exempt?
No. The pay must also not be borne by a Canadian employer or permanent establishment, unless the employee earns CAN$10,000 or less. Even when the treaty exempts the income, withholding continues until CRA approves a waiver or certification.
Does one waiver cover the whole team?
No. An R102-R waiver is employee-specific. Employer certification can cover qualifying employees, but each one’s days must be tracked.
Waiver or certification: which fits us?
Certification suits employers with repeated short trips, where each employee stays under 45 working days in the calendar year or under 90 days present in any 12-month period. Longer or one-off assignments that are still treaty-exempt usually use individual R102-R waivers.
When should we apply?
At least 30 days before the employee starts working in Canada or before the first payment. Late requests may still be considered, but relief generally applies only from approval.
What counts as a day in Canada?
For the treaty’s 183-day test, any day or part of a day you’re physically in Canada counts, regardless of the hours, and even vacation days in Canada are included.
How long does certification last?
Up to two calendar years. CRA can revoke it if the conditions aren’t met, and the employer may then owe the withholding for the certified period.
Do we still issue T4 slips?
Generally yes. A certified employer still reports qualifying employees on T4 slips unless it has no reason to believe an employee’s Canadian income for the year will be more than CAN$10,000.
Does certification remove CPP and EI?
No. Those have separate rules and possible exemptions, such as a U.S. certificate of coverage for CPP.
Do we need a Canadian payroll account?
You need a CRA business number, and if you expect to make remittances, a payroll program account. We can register both.
What about work in Québec?
Québec has its own source-deduction and employer-contribution rules, which a CRA waiver or certification doesn’t address. We’ll flag what applies.
What if a trip is already underway?
Review payroll now. CRA may still consider a request, but relief generally applies only after approval.
Is this different from the 15% withheld on our company’s service fee?
Yes. That’s Regulation 105, which applies to the business’s fee, not employees’ pay. See Regulation 105 waivers.
What does it cost?
We provide a fixed-fee quote after reviewing your information, generally following the initial call. The quote reflects the number of employees and the route that fits.
Related services
These services often come up alongside this one. Start with the review above; we’ll tell you if any of them apply.
If your employees also need work-permit advice, we can introduce you to an independent Canadian immigration professional. Lepore doesn’t provide immigration advice.
Employees heading to Canada? Sort out withholding before the first pay run.
or call (905) 561-1278
General information only. Withholding, waiver and certification outcomes depend on each employee’s facts, the treaty and CRA review. Submitting an inquiry does not create a professional-client relationship.