Is your tax deduction accurate?

Know your Benefits pay

You can take charge of your pay by ensuring your address and banking information are up-to-date and that your income tax deductions match your personal circumstances.

When I started working in Ottawa I was worried about how it would impact my taxes,” said Master Seaman Amalia Grande, a port-inspection diver at the Director General Dive Safety.  “I live in Aylmer, Quebec and knew that the income tax rate was higher. I didn’t want to be stuck with a large income tax payment at the end of the year, so I took steps to protect myself.”  

Master Seaman Grande discussed her home address and tax situation when she cleared-in to her new unit. She chose to have a monthly tax deduction set-up to cover the difference between the two provincial tax rates. Her additional tax payments allowed her to avoid any issues at tax season. 

It’s important to know the rules,” said Master Seaman Grande.  “If my situation was reversed and I worked in Gatineau and lived in Ottawa, then a different rule would apply. In that situation, members are at risk of being over-taxed during the year, so they get a 20% reduction of the Quebec rate, to better align it with Ontario.”   

Master Seaman Grande’s situation is one of many exceptions that are recognized by the Canadian Armed Forces’ (CAF) pay system. Knowing your benefits starts with you.

Your home address is important

Your home address must be kept up-to-date in the CAF pay systems both during your career and following your transition to civilian life. This will ensure that you receive your monthly payments, T4s, and any retroactive pay increases.

Your exceptions for income tax deductions

Your income tax deductions are based on where you work, unless you’re granted a dispersion to base your income tax deductions on where you live. Exceptions to this include situations where:

  • You live in Quebec but work in a different province:
    • your income tax is based on your province of work.
    • you can request additional tax installments to align your total with the Quebec rate.
  • You work in Quebec but live in a different province:
    • your income tax is based on the Quebec rate, but a reduction is applied.
    • Within the National Capital Region (NCR) the reduction is 20 percent.
  • You work outside of Canada:
    • but live (or are deemed to live) in Canada, your income tax is based on your (deemed) province of residency
    • but live as a resident (or a deemed resident) of your country of work, your income tax is based on your country of residency.
  • You leave the CAF:
    • your income tax is based on the Ontario rate since your final workplace is recognized as the CAF release section located in Ottawa, Ontario. Your final benefit payments, any future back-payments and your final and future T4s are processed in Ontario.

Your Reduction at Source

You can request a reduction by visiting your orderly room and submitting the Canadian Revenue Agency Form T1213 and CAF form for reduction of income tax at source.

Your Verification

You should review your pay statements regularly to ensure accuracy in your pay. If you suspect an issue, you should contact your orderly room or supporting base to review your file.

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