Determining Province of Employment (POE)
If you have an employee who works remotely and from a different province than your business, then you will have to determine the employee's Province of Employment (POE). This article will explain the basics of determining POE, but it’s a good idea to use the CRA’s interactive tool for determining Province of Employment here.
Let’s start with two assumptions:
The employee is earning employment income (not a contractor or self-employed).
The employee is a resident of Canada.
Step 1: Does the employee work at your place of business?
If yes → the Province of Employment is the province where your business is located.
✅ Example: Your office is in Alberta, and the employee comes in regularly. POE is Alberta.
This is by far the MOST common scenario. According to Statistics Canada, as of 2023 well over 80% of Canadian workers are reporting to a place of business, therefore the POE is clear.
If the employee is not working at your place of business, move to Step 2.
Step 2: Is there a full-time remote work agreement?
If no → POE is the province where your payroll department or payroll records are located.
✅ Example: Your employee works from home without a formal agreement, and your payroll is managed in Ontario. POE is Ontario.
If yes, move to Step 3.
Step 3: Is the employee reasonably attached to a business establishment?
If you and your employee have a formal full-time remote work agreement, you still need to check whether they’re reasonably attached to one of your business establishments. This decision depends on the facts of each case — not just the employee’s location.
✅ Primary Indicator
Ask:
If the employee weren’t working remotely full-time, where would they physically go to do their job?
If they used to work at a specific location before going remote, and their duties haven’t changed, they’re likely still attached to that location.
✅ Secondary Indicators
If it’s not obvious, here are some clues to help figure it out:
Where do they attend (or would attend) meetings, even virtually?
Where do they get their equipment, tools, or work-related help?
Where do they get instructions from, even if it's over video or phone?
What location is responsible for supervising or managing them?
Based on their job duties, where would they be expected to report?
Look at all the indicators together. They don’t all need to point to the same place, but there should be a clear connection to one of your business locations.
What counts as a “reasonable” decision?
CRA expects your decision to be based on real, supportable facts — not on convenience or tax savings. It should reflect the actual working relationship and how the employee does their job.
Summary
Most Canadian employees work from their employers place of business, so the Province of Employment is clear. When an employee works remotely, the employer must determine their Province of Employment based on factors outlined by the CRA.