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TONI — A new way to calculate
payroll income tax deductions
What is TONI?
TONI (tax on income) is a new way to determine provincial personal
income tax based on taxable income. The current tax-on-tax method
calculates provincial income tax as a percentage of the basic
federal tax. With TONI, provincial tax will be calculated by
applying provincial tax rates to the taxable income amount.
As of Jan. 1, 2001, TONI will apply to provincial withholdings
at source in all provinces, except Quebec. Under TONI, each province
can set its own unlimited number of tax brackets and rates, add
supplements to existing non-refundable tax credits, and introduce
any number of new non-refundable tax credits.
How does
TONI affect me as an employee?
Form TD1
A separate provincial form TD1 will be provided For all provinces
with personal provincial tax credit amounts that differ from
the federal tax credit amounts. You will have to complete both
a federal and provincial form TD1 for 2001, if you are claiming
other than the basic personal exemption. Refer to the instructions
on Form TD1 to determine if you need to complete it. Employees
or pensioners who don’t complete the new forms will receive
only the basic personal amount (claim code 1) for tax purposes.
To allow employees and pensioners time to complete the signed TD1 forms, Canada Customs and Revenue Agency (CCRA) will authorize employers and payers, for the initial pay periods of 2001, to use the federal TD1 information already on file to estimate the appropriate 2001 provincial tax credits for their employees or pensioners.
Employees and
pensioners must still complete and submit their provincial TD1
forms within a reasonable period of time to ensure that they
receive the correct provincial tax credits. Employees and pensioners
claiming other than the basic personal exemption should submit
a new provincial and federal TD1 by Jan. 26, 2001, to Payroll,
Department of Human Resources, Arts and Administration Building,
A4023.
To get forms, visit the CCRA Web site at www.ccra-adrc.gc.ca/tax/business/toni. We will also have
the forms available at the payroll office in early January when
they are received from CCRA.
Payroll deductions
Payroll deductions for income tax will still be shown on your
payroll advice as one amount which will be the total of both
federal and provincial income tax.
T4
You will continue to receive a T4 slip in February of each year.
The T4 slip will show combined federal and provincial
taxes as one total.
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The new tax rates listed at
right will come into effect with the |
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