A company sends four people to Canada for a three month installation. Their treaty exempts them from Canadian tax. Nobody will owe the Canadian government a dollar at the end of it. The company is nonetheless required to operate a Canadian payroll for them, and if it does not, the liability is the company's rather than the employees'.
Key Takeaway
CRA states that any employer, including a non-resident employer, must withhold on account of a non-resident employee's Canadian income tax even if the employee is likely to be exempt from tax because of a tax treaty. Two routes out exist: an employee waiver on Form R102-R, filed per employee, or employer certification under subsection 153(7) on Form RC473. Commentary describes both as requiring at least thirty days' lead time. Certification covers only qualifying non-resident employees, who must be treaty-resident, treaty-exempt, and either work in Canada under 45 days in the calendar year or be present under 90 days in any 12-month period. Commentary notes the employer must track the employee's days with other employers and their personal time in Canada as well.
A Note On Currency
Everything here is stated as verified in August 2026 and requires confirmation before reliance.
We have read no statutory provision or regulation. Section references are as CRA and commentary give them.
Three of our sources are the same law firm article syndicated across three publication platforms[1]. We treat them as one source, cite them once, and say so here because a reader counting references would otherwise overestimate the corroboration. That article dates from 2016, when the certification regime was new.
We did not obtain Form RC473, Form R102-R, or the conditions the Minister is said to establish for certification.
We did not establish the de minimis threshold referred to in the waiver discussion, the duration or renewal requirements of a certification, or the reporting obligations that survive it.
This is not tax advice. Cross-border employment is fact-specific, treaty-specific and time-critical, and it needs advice before anyone travels.
Closing A Gap We Left Open
A note on why this article exists.
Earlier in this series we addressed Regulation 105, which governs withholding on fees paid to non-residents for services rendered in Canada. In the limits section of that article we recorded that the interaction with Regulation 102 for non-resident employees, and with non-resident employer certification, was noted only in passing and is a substantial subject we have not addressed.
This article addresses it.
The distinction between the two regimes is worth stating at the outset, and it is ours.
Regulation 105 applies to fees for services, paid to a non-resident who is not an employee. It is a flat withholding on the gross payment.
Regulation 102 applies to employment income, paid to an employee for duties performed in Canada. It is withholding at graduated rates through a payroll.
Which one applies turns on whether the relationship is employment or independent contract, which is the classification question this publication has addressed separately.
That matters because the two regimes have different rates, different relief mechanisms, different forms and different deadlines. A business that has correctly identified a cross-border withholding issue can still apply the wrong one, and the classification determines which.
The Obligation
The rule itself, stated broadly by the sources.
Commentary locates it in paragraph 153(1)(a) of the Income Tax Act and section 102 of the Income Tax Regulations, under which the payor of remuneration is required to withhold the prescribed amount of Canadian income taxes from remuneration paid for employment[1].
An advisory firm states the scope in terms worth quoting for their breadth: every employer, whether resident of Canada or not, who pays salaries or other remuneration to either a resident of Canada or to a non-resident of Canada in respect of employment services rendered in Canada is required to withhold tax under Regulation 102 and remit it to CRA[2].
CRA puts the principle as one of equivalence: non-resident employees providing employment services in Canada are subject to the same withholding, remitting and reporting obligations as those for Canadian resident employees[3].
Three features, ours.
The test is where the duties are performed, not where the employer is, where the contract was made, or where the employee is paid.
It applies to non-resident employers who may have no other Canadian presence, no business number, and no reason to think they have a Canadian filing obligation.
And the equivalence principle means the obligation is not a special reduced regime. It is ordinary Canadian payroll, with everything that implies.
Withhold Even Where No Tax Is Owed
The feature that makes this counterintuitive, and CRA states it directly.
Its guidance says that any employer, including a non-resident employer, is required to withhold amounts on account of the employee's income tax liability in Canada even if the employee is likely to be exempt from tax because of a tax treaty[3].
It adds that in order for the employer to be relieved of their obligation to withhold tax the employee would have to apply for and receive a waiver of withholding from the CRA[3].
Elsewhere CRA notes that income a non-resident earns in Canada from an office or employment is generally taxable in Canada, while a resident of a treaty country is likely to be exempt on employment income earned in Canada from a non-resident employer if certain conditions are met[4].
So the structure is this, and this is our own analysis.
Liability and withholding are separate questions. The treaty answers the first. It does not answer the second.
The default therefore is that money is withheld from an employee who owes nothing, remitted to CRA, and recovered only when that employee files a Canadian return claiming the treaty exemption.
That is a real cost even though no tax is ultimately payable: the employee is out of pocket for months, and someone has to prepare a Canadian return for a person with no Canadian tax liability.
The relief mechanisms exist precisely to avoid that circuit, which is why they are worth the administrative effort of using them properly.
Whose Problem This Is
The affected population, which is wider than it first appears. This section is our own analysis.
A foreign company sending staff to Canada on a project, installation, audit, training assignment or secondment.
A Canadian company hosting foreign group employees, where the employment relationship remains with the foreign entity but the duties are performed here.
A Canadian business employing someone who lives abroad and travels in periodically.
An employer whose staff attend Canadian meetings, conferences or client sites as a routine part of a role based elsewhere.
CRA's own material illustrates the last category from an unexpected direction, addressing production companies contracting with non-resident individuals where the services are performed under an employer-employee relationship, and noting that such payments are subject to the same withholding requirements as those made to resident employees under Regulation 102[5].
Two observations.
The obligation attaches to short visits, not merely to relocations. There is no minimum below which the withholding rule simply does not apply, which is why the relief routes exist.
And it commonly lands on an organisation with no Canadian payroll function at all. The people who would normally notice a payroll obligation are in another country administering another country's rules.
What Actually Comes Off
The components, which are more than income tax.
An advisory firm states that remuneration is subject to deductions at source based on graduated rates, and that the required Canadian payroll source deductions consist of federal and provincial income tax, Canada Pension Plan premiums and Employment Insurance premiums[2].
It adds the allocation of responsibility: the employee is responsible for the income tax portions, and both the employee and the employer are responsible for the CPP and EI premiums[2].
Three consequences, ours.
Because the rates are graduated rather than flat, this is not a single percentage applied to a payment. It requires an actual payroll calculation, which is a different order of administrative work from the flat withholding under the fee-for-services regime.
Because provincial tax is included, the province in which the duties are performed matters, and an employee working in more than one province raises a further question.
And because the employer has its own share of CPP and EI, part of this is an employer cost rather than a deduction from the employee. That share does not disappear if the withholding is missed; it is simply unpaid.
Readers of our article on employer payroll reviews will recognise the pattern, where CRA's stated position is that an employer who fails to deduct is responsible for remitting the balance including the employee's share.
Two Doors, Two Applicants
The structure of the relief, and the distinction between the routes is the practical heart of this article.
CRA describes the first: non-resident employees who are not qualifying non-resident employees, or whose employer does not become certified, can still apply to CRA for an income tax waiver using Form R102-R, Regulation 102 Waiver Application[4].
And the second: certain non-resident employers who apply for non-resident employer certification will not have to withhold and remit tax on payments they make to non-resident employees who are working in Canada for a limited time and are exempt from tax in Canada under a tax treaty[3].
An accounting firm states the relationship between them cleanly: the Regulation 102 waiver must be filed by each individual employee, whereas where the employer files an RC473 and is approved, a qualifying non-resident employee working temporarily in Canada does not need to file an R102-R[6].
CRA confirms the point from its side: there is no need for an employee working in Canada to get a waiver of withholding from CRA if their employer has been certified[3].
So the two doors differ in who walks through them, and this is our own summary.
The waiver is retail: one application per employee, per engagement, made by the employee.
The certification is wholesale: one application by the employer, which then covers qualifying employees without further individual filings.
For an employer sending one person once, the waiver may be simpler. For an employer sending people repeatedly, certification is the structural answer, subject to the significant qualification set out below.
The Employee Waiver
The older route, with two details worth recording.
Commentary describes applying for a Regulation 102 waiver as often cumbersome and time sensitive, noting that unless the consideration paid to the employee does not exceed a de minimis threshold, the application must be submitted at least 30 days prior to the start of the employment services in Canada or the initial payment for the employment services[1].
We did not establish what that de minimis threshold is, and a reader should not assume one is available to them.
CRA records a change worth noting for anyone working from older material: effective 1 January 2017, employees can no longer use Form R102-J, Regulation 102 Treaty Based Waiver Application, Joint Employer / Employee. That form was removed and the policies unique to applicants using it have also ended. Form R102-R remains available[3].
Our own observation is that this is exactly the kind of change that strands a business relying on internal precedent.
An organisation that handled a cross-border assignment before 2017 may have a file containing a completed joint application, an approval, and a note of the process followed. None of that is usable now, and the policies that went with it have been withdrawn.
CRA also notes that requests for international waivers, covering Regulation 102, Regulation 105 and RC473 certification, can be submitted online through My Account, Represent a Client or My Business Account, describing this as expanded digital service available as of 19 June 2020[3].
Thirty Days, On Both Routes
A deadline that appears on each door, which is the single most actionable point in this article.
On the waiver, commentary states the application must be submitted at least 30 days prior to the start of the employment services in Canada or the initial payment, subject to the de minimis threshold[1].
On certification, an accounting firm states that the application must be received at least 30 days before a non-resident employee begins working in Canada[6].
Three consequences, ours.
Neither route can be used retroactively. A business that discovers the issue after an employee has arrived has, on these descriptions, missed both.
Thirty days is measured against the start of work or the first payment, not against a filing deadline. So the trigger is an operational event that the tax function may hear about last.
And the timeline sits upstream of the decisions that create it. Assignments are agreed, visas arranged and travel booked by people to whom Canadian withholding is not a consideration.
The practical answer is a rule inside the business rather than a rule of tax law: any assignment involving work performed in Canada should be flagged to whoever handles tax at the point it is proposed, because thirty days before the start date is often before the assignment is confirmed.
Employer Certification
The mechanism, and where the application goes.
Commentary states that the legislation allows the Minister of National Revenue to certify an employer if the employer has applied in prescribed form and establishes to the Minister's satisfaction that it is resident in a treaty country and meets the conditions that the Minister establishes[1].
Application is made using Form RC473, described as filed with the CRA Pacific International Waivers Centre of Expertise in Surrey, British Columbia[1], and elsewhere as submittable by mail or through CRA online services[6].
CRA describes the exception as applying to non-resident employers paying employment income to non-resident employees for performing the duties of an office or employment in Canada after 2015[3].
Two observations, ours.
The phrase conditions that the Minister establishes is doing unspecified work. Certification is not simply a matter of meeting statutory criteria; there are administrative conditions we did not obtain, and an applicant needs to know what they are before applying.
And the reference to payments after 2015 dates the regime. Commentary written before 2016 does not describe it, which matters because a great deal of cross-border withholding material predates it.
Another source describes the pre-existing individual waiver process as burdensome and costly, requiring a good amount of support and explanation, and describes the certification regime as providing certain administrative relief which does not apply to all circumstances[7].
That last qualification is the subject of the next three sections.
What Makes An Employer Qualify
The conditions on the employer side, as commentary reports them.
The employer must be resident in a country with which Canada has a tax treaty, or be an entity that would be resident in a treaty country if it were treated, for the purpose of income tax in its home country, as a corporation; and must obtain certification as a qualifying non-resident employer under subsection 153(7)[1].
An accounting firm frames the same requirement as the employer being certified by the Minister of National Revenue pursuant to subsection 153(7) at the time it makes a payment to its non-resident employee in Canada[6].
Two points, ours.
The alternative limb, covering entities that would be resident in a treaty country if treated as corporations, is aimed at a real problem. Partnerships and certain hybrid entities are common vehicles for operating businesses and may not themselves be treaty residents, and without that limb they would be excluded from relief their owners could otherwise access.
And the requirement is tested at the time of each payment, on the accounting firm's description. That framing matters, because it means certification is a status to be maintained rather than a permission obtained once. We did not establish the duration or renewal mechanics, and that is a question to put to an advisor.
What Makes An Employee Qualify
The conditions on the employee side, from CRA and commentary consistently.
CRA states that a qualifying non-resident employee, at any time in respect of a payment of employment income, is an employee who is resident in a country Canada has a tax treaty with at the time of the payment, and does not have to pay tax in Canada on the payment because of a tax treaty[4].
Commentary gives the third element as the employee either working in Canada for less than 45 days in the calendar year that includes the time of the payment, or being present in Canada for less than 90 days in any 12-month period that includes the time of the payment[1].
Three observations, ours.
The first two conditions are about status and liability, and they are the employee's own facts rather than the employer's.
The third is about counting, and it is the one that generates the compliance burden discussed below.
And the day tests are framed as alternatives. An employee needs to satisfy only one of them, which is more generous than it first reads and is worth understanding precisely, because the two tests are not measuring the same thing.
The Two Day Tests Are Not The Same Test
A distinction that decides outcomes. This section is our own analysis.
The 45-day test counts days worked in Canada, measured over the calendar year that includes the payment.
The 90-day test counts days present in Canada, measured over any 12-month period that includes the payment.
Four differences follow.
The tests count different things. A Saturday spent in Toronto counts toward the 90 and not toward the 45.
They use different periods. The calendar year resets on 1 January; a rolling 12-month window never resets, so days from the previous year can still be inside it.
Because the 90-day window is any 12-month period including the payment, an employer cannot simply pick the most convenient window. Every qualifying window has to work.
And because the tests are alternatives, an employee who fails one may still qualify on the other. An employee who works 50 days in Canada fails the 45-day test, but may still qualify if total presence stays under 90 in every relevant 12-month window.
The practical consequence is that a business cannot administer this with a single day count. It needs two counts on two calendars, and it needs to know which one it is relying on for each employee.
How Fast A Project Consumes Them
The thresholds against realistic assignment patterns, computed by us.
A pattern of one week per month over ten months is about 50 working days, which fails the 45-day test.
Two weeks per quarter is about 40 working days, which passes.
A three month project at five days a week is about 65 working days, which fails comfortably.
Two observations, ours.
Forty-five working days is roughly nine working weeks. That is a shorter assignment than most people picture when they think of temporary work in Canada, and a good deal shorter than a typical implementation or construction engagement.
And the patterns that pass are the intermittent ones. A regular monthly visit accumulates faster than it feels, because the count is annual while the experience is monthly.
Which means the assignment shapes most likely to qualify are recurring short visits, and the ones most likely to fail are the continuous engagements that a business is most likely to treat as significant enough to ask about. The ones nobody asks about are frequently the ones that qualify.
Tracking What You Cannot See
The consequence commentary identifies explicitly, and the most difficult feature of the regime.
It states that as a result of the broad language of the day tests, the employer is required to track not only the days the employee works or is present in Canada as part of the employment contract with that employer but also, as applicable, the employee's employment with another employer as well as personal time spent in Canada[1].
Sit with what that requires, and this is our own analysis.
The employer must know whether its employee spent a weekend in Canada privately, took a Canadian holiday, visited family here, or worked in Canada for somebody else.
None of that is within the employer's ordinary knowledge, and much of it the employer has no entitlement to ask about in the way an employment relationship is normally conducted.
Our own illustration of how quickly it accumulates. Take an employee with 40 working days in Canada for this employer, comfortably inside the 45-day test.
Add 24 days of weekends stayed over rather than flying home, and the presence count reaches 64.
Add a one week personal holiday, and it reaches 71. Add nine days working in Canada for another employer, 80. Add a five day family visit, 85.
That employee still qualifies, because they pass the 45-day work test. But the 90-day presence test is nearly exhausted at 85, and if their working days had reached 46, there would be no fallback.
The exposure is therefore concentrated in the employees who are close to both thresholds, and the employer's ability to know it is weakest exactly there.
Certification Is Not A Blanket
The qualification that most limits the relief, stated plainly by CRA.
Its guidance says that since non-resident employer certification applies only to payments made to qualifying non-resident employees, an employer must withhold and remit tax on the employment income paid to non-resident employees who are not qualifying non-resident employees, unless the employee applies for and gets an income tax waiver[4].
Three consequences, ours.
Certification does not exempt the employer. It exempts particular payments to particular employees who meet the conditions.
A certified employer therefore runs two populations simultaneously: qualifying employees for whom no withholding is required, and everyone else for whom the full obligation continues.
And an employee can move between those populations mid-assignment, by crossing a day threshold. On the framing that the test applies at the time of each payment, the employer's obligation can change partway through an engagement.
This is the point at which we would push back on how the relief is often described. Certification is presented as removing the withholding obligation for visiting employees. What it actually does is remove it for a defined subset, while leaving the employer responsible for correctly identifying who is in that subset, on facts it partly cannot observe, tested at every payment.
That is genuine relief. It is not a reason to stop tracking, and an employer that treats certification as a completed compliance task has misunderstood it.
What Failure Costs
The magnitude, computed by us on illustrative assumptions.
Take an employee on $120,000 a year who works 60 days in Canada out of an assumed 250 working days.
Remuneration attributable to Canada on a simple day-count allocation is roughly $28,800.
Withholding at an assumed 20 percent is roughly $5,760 for that employee; at 30 percent, roughly $8,640.
Across four such employees at the higher assumption, roughly $34,560 of unwithheld tax. Across ten, roughly $86,400.
Three cautions on those figures, and they are important.
The rates are assumed. Actual withholding is at graduated rates through a payroll calculation and depends on province and circumstances.
The day-count allocation is our own simplification. We did not establish how remuneration is properly attributed to Canadian duties, and that method should not be relied on.
And the figures are the withholding alone. Penalties and interest for failure to withhold and remit are additional, and we did not research the applicable rates and therefore state none.
The observation that survives those caveats is structural. The amount at stake is the withholding that should have been taken, and it is owed by the employer, in a situation where the employees may well have owed Canada nothing at all.
CPP And EI Are A Separate Question
A point that is easy to lose behind the income tax analysis.
An advisory firm states that CPP, and Quebec Pension Plan, contributions are exempt when a certificate of coverage is issued by the home country[2].
We report that as the source states it, did not research the social security agreements under which such certificates are issued, and did not establish the position for Employment Insurance.
Two observations, ours.
The relief mechanism is different in kind. It is a certificate issued by the employee's home country, not an application to CRA, which means it sits with a different authority on a different timetable and is likely handled by different people.
And it is not addressed by either of the two doors discussed in this article. A waiver or certification directed at income tax withholding does not, on anything we found, resolve the pension and insurance premiums.
So an employer that has correctly obtained certification and correctly identified its qualifying employees may still have a live obligation on the contribution side, including its own employer share.
Anyone relying on this article should treat that as an open question requiring its own advice rather than as a settled point.
You Cannot Stop Early
A short rule with a clear practical consequence.
An advisory firm states that the employer can stop withholding income tax only after the CRA approves the non-resident employer certification or the Regulation 102 waiver[2].
Our own observation is that this closes the gap a business would naturally try to occupy.
A well-intentioned employer that has filed its application, believes it will be approved, and can see that the employee will owe nothing, has every commercial reason to stop withholding while it waits.
On this statement, doing so is a breach whatever the eventual outcome. Approval is the operative event, not filing and not entitlement.
Which puts a premium on the thirty day lead time discussed above, since the alternative to lead time is withholding through the early part of an assignment and unwinding it afterwards through the employee's Canadian return.
What The Auditor Actually Examines
The enquiry in practice. This section is our own analysis.
Whether any Canadian payroll was operated at all for employees performing duties in Canada.
Certification status and its currency at the time of each payment, rather than at some point in the past.
The day records, tested on both the 45-day and 90-day bases, and whether the employer can evidence which test it relied on.
Whether presence beyond contracted work days was captured, including personal time and work for other employers.
Treaty residence and treaty exemption for each employee said to qualify.
Waivers, their approval dates, and whether withholding stopped before or after approval.
The CPP and EI position separately, including any certificates of coverage relied on.
The third and fourth items are where we would expect most difficulty, because they require records that an employer typically has no reason to keep and no natural mechanism for collecting.
What Records Survive
The certification itself, with its date, and evidence of its status at each payment date.
A day-by-day record per employee, distinguishing days worked from days present, maintained on both a calendar-year and a rolling twelve-month basis.
Employee declarations of Canadian presence outside contracted work, obtained periodically rather than reconstructed at year end.
Evidence of treaty residence for each employee treated as qualifying.
Approved waivers and the dates on which withholding was started and stopped.
Certificates of coverage relied on for contribution relief.
Travel and expense records, which are frequently the only independent evidence of when someone was in the country.
What To Do
Assume the obligation exists. CRA's position is that withholding is required even where a treaty means the employee will owe nothing.
Establish employment or contract first. Regulation 102 governs employees; the separate fee-for-services regime governs non-employee contractors, and the two have different rates, forms and reliefs.
Flag Canadian work at the point it is proposed. Both relief routes are described as needing at least thirty days before work starts or the first payment.
Choose the route deliberately. Waivers are filed per employee by the employee; certification is filed once by the employer and then covers qualifying employees.
Do not treat certification as a blanket. CRA states it applies only to payments to qualifying non-resident employees, and withholding continues for everyone else.
Run two day counts, not one. Forty-five days worked in a calendar year and ninety days present in any twelve-month period measure different things over different periods.
Ask employees about personal time in Canada. Commentary states the employer must track personal presence and work for other employers, and the employer will not otherwise know.
Watch employees near both thresholds. The fallback only helps while one of the two tests still has room.
Keep withholding until approval arrives. One source states withholding can stop only after CRA approves, not on filing.
Handle CPP and EI separately. A certificate of coverage from the home country is described as the relief there, and it is not what either Canadian application addresses.
The Limits Of This Analysis
Several caveats matter. This is not tax advice; cross-border employment is fact-specific, treaty-specific and time-critical, and needs advice before anyone travels. Everything is stated as verified in August 2026 and requires confirmation. We have read no statutory provision or regulation, and all references are as CRA and commentary give them. Three of the sources we found are the same law firm article syndicated across three platforms, and we cite it once accordingly; that article dates from 2016, when the certification regime was new, and several of the points this article draws from it rest on that single source. We did not obtain Form RC473, Form R102-R, or the administrative conditions the Minister is said to establish for certification. We did not establish the de minimis threshold referred to in the waiver discussion, the duration or renewal requirements of a certification, the reporting obligations that survive certification, or whether T4 filing continues for qualifying employees. We did not research the social security agreements under which certificates of coverage are issued, and did not establish the Employment Insurance position at all. We did not research the penalties and interest applicable to a failure to withhold and therefore state none. All arithmetic is our own, applies assumed withholding rates to a hypothetical salary, and uses a simple day-count allocation of remuneration to Canada which we did not verify as the correct method and which should not be relied on. The analysis of how the two day tests differ, the accumulation illustration, the observation that certification is not a blanket and the audit examination structure are our own. This article does not address provincial variation, employees working across multiple provinces, permanent establishment risk arising from employee presence, immigration requirements, or the position of employees resident in non-treaty countries.
Frequently Asked Questions
Our employee is treaty-exempt. Do we still have to withhold?
What is the difference between a waiver and certification?
How much notice do we need?
We are certified. Are we done?
Do we really have to know about their weekends?
Does this cover CPP and EI?
References
- Gowling WLG. (2016). Regulation 102 Withholding: The New Exemption, on paragraph 153(1)(a) of the Income Tax Act and section 102 of the Income Tax Regulations requiring the payor of remuneration to withhold the prescribed amount of Canadian income taxes from remuneration paid for employment; on the Minister being permitted to certify an employer that has applied in prescribed form and established to the Minister's satisfaction that it is resident in a treaty country and meets the conditions the Minister establishes; on the application being made using Form RC473, filed with the CRA Pacific International Waivers Centre of Expertise in Surrey, British Columbia; on the employer condition requiring residence in a treaty country, or being an entity that would be resident in a treaty country if treated for home country income tax purposes as a corporation, together with certification under subsection 153(7); on a qualifying non-resident employee working in Canada for less than 45 days in the calendar year that includes the time of the payment, or being present in Canada for less than 90 days in any 12-month period that includes the time of the payment; on the employer consequently being required to track not only days worked or present under its own employment contract but also the employee's employment with another employer and personal time spent in Canada; and on a Regulation 102 waiver application being cumbersome and time sensitive, requiring submission at least 30 days prior to the start of employment services in Canada or the initial payment unless a de minimis threshold applies. Note: this same article appears on at least three platforms, including Lexology and Mondaq; we treat it as a single source and count it once. It dates from 2016, when the certification regime was new. gowlingwlg.com
- BDO. (2023, January). Canada: Payroll Withholding Obligations for Non-Residents, on every employer, whether resident of Canada or not, who pays salaries or other remuneration to a resident or non-resident of Canada in respect of employment services rendered in Canada being required to withhold tax under Regulation 102 and remit it to CRA; on remuneration being subject to deductions at source based on graduated rates, with required Canadian payroll source deductions consisting of federal and provincial income tax, Canada Pension Plan premiums and Employment Insurance premiums; on the employee being responsible for the income tax portions and both employee and employer being responsible for CPP and EI premiums; on CPP and QPP contributions being exempt when a certificate of coverage is issued by the home country; and on the employer being able to stop withholding income tax only after CRA approves the non-resident employer certification or the Regulation 102 waiver. Note: an international advisory firm newsletter. bdo.global
- Canada Revenue Agency. Treaty Based Waivers Involving Regulation 102 Withholding, on non-resident employees providing employment services in Canada being subject to the same withholding, remitting and reporting obligations as Canadian resident employees; on any employer, including a non-resident employer, being required to withhold amounts on account of the employee's Canadian income tax liability even if the employee is likely to be exempt from tax because of a tax treaty; on the employer being relieved of the withholding obligation only where the employee applies for and receives a waiver; on the exception for certain non-resident employers paying employment income to non-resident employees for performing the duties of an office or employment in Canada after 2015, who on applying for non-resident employer certification will not have to withhold and remit tax on payments to non-resident employees working in Canada for a limited time and exempt under a treaty; on there being no need for an employee to obtain a waiver where their employer has been certified; on Form R102-J having been discontinued effective 1 January 2017 with the policies unique to it ended, Form R102-R remaining available; and on international waiver requests being submittable online through My Account, Represent a Client or My Business Account as of 19 June 2020. Note: a CRA primary publication. canada.ca
- Canada Revenue Agency. Non-Resident Employer Certification, on income a non-resident earns in Canada from an office or employment generally being taxable in Canada, while a resident of a treaty country is likely to be exempt on employment income earned in Canada from a non-resident employer if certain conditions are met; on non-resident employer certification applying only to payments made to qualifying non-resident employees, so that the employer must withhold and remit tax on employment income paid to non-resident employees who are not qualifying non-resident employees unless the employee obtains a waiver; on non-resident employees who are not qualifying employees, or whose employer does not become certified, still being able to apply for a waiver using Form R102-R; and on a qualifying non-resident employee being an employee who is resident in a treaty country at the time of the payment and does not have to pay tax in Canada on the payment because of a tax treaty. Note: a CRA primary publication. canada.ca
- Canada Revenue Agency. Employment Services, within its guidance for behind the scenes personnel, on a production company contracting with a non-resident individual where the services are performed under an employer-employee relationship, so that the individual is considered an employee of the production company; on payments made to non-residents who provide services in Canada as employees being subject to the same withholding requirements as those made to resident employees under Regulation 102, at graduated rates; and on the exception for certain non-resident employers paying employment income for duties performed in Canada after 2015. Note: a CRA primary publication addressed to a specific sector; we use it for the general statements it makes. canada.ca
- Fuller Landau LLP. (2025, January). Non-Resident Employer Certification: How It Works, on Form RC473 being completed and submitted to the CRA international waivers office for approval, by mail or through CRA online services; on the application needing to be received at least 30 days before a non-resident employee begins working in Canada; on the Regulation 102 waiver having to be filed by each individual employee, while a qualifying non-resident employee of an employer approved on an RC473 does not need to file an R102-R; and on a qualifying non-resident employer being one certified by the Minister of National Revenue pursuant to subsection 153(7) at the time it makes a payment to its non-resident employee in Canada. Note: an accounting firm publication. fullerllp.com
- Global Tax Network. Canada: Changes to the Non-Resident Withholding Relief Process, on foreign employers being required under Regulation 102 to withhold and remit Canadian tax withholdings from Canadian source remuneration earned by non-resident employees; on CRA allowing an exemption through an individual withholding waiver application where employee and employer meet certain requirements, that application requiring a good amount of support and explanation and needing CRA approval before any adjustment to prescribed withholdings; on the existing process being burdensome and costly; and on the newer developments providing certain administrative relief which does not apply to all circumstances, with both a qualifying non-resident employer and a qualifying non-resident employee required to be resident in a country with which Canada has a tax treaty. Note: a global mobility advisory publication; publication date not established. gtn.com
This article is provided for general informational purposes and is not tax advice. No statutory provision or regulation was read. Three apparently separate sources proved to be one syndicated article dating from 2016, and are cited once. Forms RC473 and R102-R were not obtained, and the CPP, EI and penalty positions were not researched. All arithmetic is the authors' own, uses assumed rates and an unverified day-count allocation method, and is illustrative only.