5.7 Calculating Deductions and Contributions
You calculate the deductions based on the amounts you pay your employees. Deductions are taken for:
- income tax,
- CPP contributions and
- EI premiums.
In addition to the deductions taken from an employee's remuneration, you have to calculate and set aside your share of CPP and EI. There is no employer contribution required for income tax.
You hold all of the amounts deducted from your employees' remuneration, plus your employer contribution to CPP and EI, in trust for the Receiver General. It is recommended that these amounts be held in a separate account from your general operating account.